1978 (2) TMI 186 - SUPREME COURT

Whether "resale" in section 5(2)(a)(ii) and the second proviso means resale any where without any geographical limitation or it is confined only to resale inside Delhi?

Whether the price of the raw cotton was liable to be included in the taxable turnover of the appellants under the second proviso which was in identical terms with the second proviso in the present case?

Held that:- Appeal allowed. As already pointed out that even where the assessees used the goods purchased as raw materials in the manufacture of goods outside Delhi or having manufactured the goods, sold them outside Delhi, there was no breach of the intention expressed by them in the declarations given to the selling dealers and they could not be said to have utilised the goods for any purpose other than that for which they were purchased so as to attract the applicability of the second proviso. There was no evidence at all before the assessing authority and the order imposing penalty was, therefore, plainly unjustified. It was based on misconstruction of section 5(2)(a)(ii) and the second proviso and it must, therefore, be quashed and set aside.