TaxTMI 
TaxTMI 
TaxTMI 
1979 (11) TMI 227
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....re interState sales to the extent of Rs. 2,18,023.75. After allowing these deductions of export sales and inter-State sales, the assessing authority determined the total (sic) and taxable turnover at Rs. 1,24,810.62. It was found from the accounts that 74,634 kilograms of senna leaves were exported to foreign countries out of which purchases of 67,173 kilograms were not supported by any bill. As these purchases were considered to have been made from persons other than the assessees and in the circumstances in which no tax was payable by them under section 3, 4 or 5 of the Act, the assessing officer held that such purchases were liable to tax under section 7-A of the Act. The purchase value of the said goods was estimated at Rs. 67,173 at th....
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.... circumstances in which no tax is payable under section 3, 4 or 5, as the case may be, and either,- (a) 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 the State except as a direct result of sale or purchase in the course of inter-State trade or commerce, shall pay tax on the turnover relating to the purchase aforesaid at the rate mentioned in section 3, 4 or 5, as the case may be, whatever be the quantum of such turnover in a year: Provided that a dealer (other than a casual trader or agent of a nonresident dealer) purchasing goods [the sale of which is liable to tax under subsection....
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....the scope of section 7-A, and the phraseology had fallen short of achieving that purpose which was to check evasion. The Supreme Court, on appeal, held that the assessee had purchased goods from agriculturists, householders or unregistered dealers, as the case may be, under bought notes and that thereafter crushed them into oil. In such a case, the assessee would be liable to tax on the purchase turnover of the goods under section 7-A. The various ingredients for the assessability under section 7-A were set out and the Supreme Court pointed out at page 198: "Thus, in all these cases, the purchases have been made by the dealers of 'goods, the sale or purchase of which is generally liable to tax under the Act', but because of the circumstance....
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....ble sale within the State, because of the constitutional prohibition imposed on the State Legislature. The sale contemplated in this clause should therefore be taken to be the local salt exigible to tax." The language of section 7-A(1)(b) does not require that there must be a local taxable sale in order to get out of the liability imposed by section 7-A. Section 7-A contemplates two conditions to attract the liability thereunder. One is that there must be no tax payable under section 3, 4 or 5 by the vendor (sic) to the assessee, and the other is that there must be a disposal of the goods in any manner otherwise than by way of sale in the State. The question as to whether in satisfying the second condition, there must be a local taxable sa....
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....t to be assessed. In the present case, the contract of sale would thus be the export sale. In such a case, if the specific or ascertained goods were within the State, at the time of the contract, then they would be deemed to be local sales. Even in the case of unascertained or future goods, if at the time of the appropriation to the contract, by the seller or by the purchaser, whether the assent of the other party is prior or subsequent to such appropriation, the goods were in this State, the sale would be a local sale. It cannot be in dispute that in the present case, the goods were in the State either at the time when the contract was made or at any rate at the time when the appropriation was effected, namely, at the time of the consignme....