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1979 (5) TMI 135 - SC - VAT and Sales TaxWhether as owner or usufructuary mortgagee, tenant or otherwise were tax-free goods or of sub-clause (ii) of clause (a) of sub-section (2) of section 5 of the Act which required the turnover relating to sales to a registered dealer of goods specified in his certificate of registration for use by him in the manufacture in Punjab of any goods other than goods declared tax-free under section 6 for sale in Punjab to be deducted from the gross turnover of any dealer in order to arrive at the "taxable turnover"? Held that:- Appeal dismissed. In the instant case, the taxable event is the purchase of paddy and not its sale which alone attracts section 5(2)(a)(ii) of the Act and the taxable person, that is, the person liable to pay tax, is the purchaser and not the seller. The appellants cannot, therefore, complain that any exemption granted to them by the Act has been taken away. Even though the liability to pay purchase tax may be on the appellants, it is bound to have repercussions on the price at which they buy paddy and the price at which rice manufactured by them out of that paddy is sold by them. The tax payable under the Act admittedly being an indirect tax, the tax burden would ordinarily fall on the consumer of rice and not on any of the intermediaries including the appellants. The impugned notification cannot, therefore, be treated as one issued against the policy of the statute.
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