TaxTMI 
TaxTMI 
1999 (9) TMI 784
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....ubba Rao and L.K. Pandey, Advocates, with him), for the respondents. -------------------------------------------------- The judgment of the Court was delivered by S. RAJENDRA BABU, J.-The respondents are engaged in building of flats and houses for which purpose they buy materials such as sand, bricks and granite from persons other than registered dealers. These items have not suffered any sales tax. 2.. The Assistant Commissioner of Commercial Taxes, Enforcement, called upon the respondents by a notice dated January 19, 1982 to appear before him with their accounts relating to purchase of raw materials effected by them commencing from April 1, 1977. The respondents sent a reply to him stating that they do no....
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....Act. Section 6-A of the Act reads as follows: "6-A. Levy of tax on turnover relating to purchase of certain goods.-Every dealer, who in the course of business- (i) purchases any goods (the sale or purchase of which is liable to tax under this Act) from a registered dealer in circumstances in which no tax is payable under section 5 or under section 6, as the case may be, or (ii) purchases any goods (the sale or purchase of which is liable to tax under this Act) from a person other than a registered dealer, and (a) either consumes such goods in the manufacture of other goods for sale or otherwise, or (b) disposes of such goods in any manner other than by way of sale in the State, or (c) despatches them to a place outside ....
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....e must be consumption of the original goods for the purpose of manufacture of other goods for sale or for purposes other than sale and in the absence of such consumption the respondents were not liable to tax. The matter is brought up before this Court by way of appeal by special leave. 5.. The matter is set down before us as a Bench of three Judges referred the matter to larger Bench in view of the conflict between two decisions of this Court. 6.. The appellants contend that section 6-A(ii)(a) of the Act is attracted to consumption of original goods in the manufacture of the other goods for sale or consumption of original goods otherwise and placed reliance upon the decision in Ganesh Prasad Dixit [1969] 24 STC 343 (SC); [1969] 3 SCR....
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....Chagla, that by section 7 the price paid for buying goods consumed in the manufacture of other goods, intended to be sold or otherwise disposed of, alone is taxable. We do not think that that is a reasonable interpretation of the expression 'either consumes such goods in the manufacture of other goods for sale or otherwise'. It is intended by the Legislature that consumption of goods renders the price paid for their purchase taxable, if the goods are used in the manufacture of other goods for sale or if the goods are consumed otherwise." 9.. Subsequently this Court in Pio Food Packers [1980] 46 STC 63; [1980] 3 SCR 1271, considered identical words in the Kerala General Sales Tax Act in another manner as follows: "Learned counsel for t....