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2014 (2) TMI 579 - MADRAS HIGH COURTAssessment u/s 7A of the Tamil Nadu General Sales Tax Act - Levy of tax on purchase of edible oil - Held that:- where the goods does not suffer tax at the point of first sale for some reason or other, as per second proviso to Section 3(2), the said goods are brought under the net of taxation. The second proviso to Section 3(2) states that in the case of goods taxable at the point of first sale, the tax shall be payable at least once either by the first seller or by the second earliest of the successive dealers who is liable to tax under the section. This proviso does not shift the liability, but only the payability to tax. In the circumstances, this Court held that Section 7A of the Act stood attracted to cases of conditional exemption and there was no shift in the policy of taxation - edible oil sold to the assessee had enjoyed the exemption under the Government Order by reason of the sellers' turnover being below ₹ 300 crores limit and that the goods sold to the assessee was consumed in the manufacture of biscuits thus the edible oil is no longer available for further tax treatment as per proviso to Section 3(2), rightly the assessment was brought to tax under Section 7A of the Act. Given the object of introduction of Section 7A, to plug the leakage and to prevent evasion of tax, even though there is no 'evasion of tax' as such in the sense in which 'evasion' is understood - Decided against assessee.
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