Purchase tax under the Tamil Nadu VAT Act turns on schedule rates and turnover facts, not automatic reliance on earlier sales tax reasoning.

Section 12(1) of the Tamil Nadu Value Added Tax Act, 2006 can attract purchase tax even where the seller's sales are exempt under Section 15 and the relevant Schedule entry, because the VAT framework differs from the earlier sales tax regime and cannot be treated as a direct carry-forward of Section 7-A reasoning. The applicable rate and liability depend on the statutory schedule entries and the relevant turnover facts, including the purchaser's turnover and the selling dealer's turnover. As those facts required verification, the assessment orders could not be sustained on the existing record and were quashed to that extent, with the matter remitted for fresh consideration confined to purchase tax under Section 12(1).

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Issues: (i) Whether purchase tax under Section 12(1) of the Tamil Nadu Value Added Tax Act, 2006 was attracted on turmeric purchased from dealers whose sales were exempt under Section 15 and the relevant Schedule entry; (ii) Whether the applicable rate under Section 12(1) depended on the purchaser's turnover and the dealer turnover of the selling party, requiring factual verification before final determination.

Issue (i): Whether purchase tax under Section 12(1) of the Tamil Nadu Value Added Tax Act, 2006 was attracted on turmeric purchased from dealers whose sales were exempt under Section 15 and the relevant Schedule entry.

Analysis: Section 12(1) and the exemption scheme under Section 15 were held to operate differently from the earlier regime under Section 7-A of the Tamil Nadu General Sales Tax Act, 1959. The reasoning applied to the earlier Act could not be transplanted automatically because the Tamil Nadu Value Added Tax Act, 2006 is a value-added regime with tax at every point of sale and a corresponding input tax credit structure. The Court held that purchase tax could be attracted even where the selling dealer enjoyed exemption, but only within the statutory framework of Section 12 and the applicable schedule entries.

Conclusion: Purchase tax under Section 12(1) was not rejected outright and could apply to exempt purchases under the Tamil Nadu Value Added Tax Act, 2006.

Issue (ii): Whether the applicable rate under Section 12(1) depended on the purchaser's turnover and the dealer turnover of the selling party, requiring factual verification before final determination.

Analysis: The phrase "rates specified in the Schedules to this Act" was interpreted to include the relevant schedule entries depending upon turnover and the statutory setting. The Court found that where the petitioner's turnover did not exceed the prescribed threshold, the lower schedule rate would govern, while a higher turnover would attract the other schedule entry. It also held that purchases from dealers with very small turnover were outside the purchase tax net. As these matters required factual verification, the impugned orders could not stand in their existing form.

Conclusion: The rate and liability under Section 12(1) required fresh factual determination and could not be finally sustained on the existing record.

Final Conclusion: The impugned assessment orders were quashed to the extent they related to purchase tax under Section 12(1) of the Tamil Nadu Value Added Tax Act, 2006, and the matter was remitted for fresh consideration confined to that issue alone.

Ratio Decidendi: Under Section 12(1) of the Tamil Nadu Value Added Tax Act, 2006, purchase tax liability is governed by the rates specified in the relevant schedules, and the correct levy must be determined on the basis of the applicable turnover facts rather than by directly importing the interpretation of the earlier sales tax regime.

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