TMI Blog1973 (5) TMI 87X X X X Extracts X X X X X X X X Extracts X X X X ..... hat these goods were intended for resale, has not violated those declarations when he used these acids and chemicals in preparation of mixtures for sale and has no liability to pay tax in accordance with the proviso to section 5(2)(A)(a)(ii) of the Orissa Sales Tax Act, 1947?" 2.. The assessee is a registered dealer and sells allopathic patent medicines and mixtures. The assessing officer while examining its books of account found that it had purchased chemicals in solid and liquid form on the strength of its registration certificate free of tax, but did not resell them in Orissa in the same form in which they were purchased, but prepared mixtures out of them on the prescriptions issued by doctors. The assessing officer, therefore, estima ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he Allahabad High Court reported in Dr. Sukh Deo v. Commissioner of Sales Tax, Lucknow[1963] 14 S.T.C. 581. There their Lordships held that preparation of medicines on prescription did not amount to a manufacture of medicines. The learned State Representative also relied on a case reported in Dr. Baldev Raj v. State of Punjab[1969] 24 S.T.C. 50. It is a case of the Punjab High Court wherein a doctor when dispensing prescription was taken to be a dealer. In this case, the view taken by the Allahabad High Court has not been considered. The latest case law appears to have been reported in Commissioner of Sales Tax, U.P. v. Dr. Sukh Deo[1969] 23 S.T.C. 385 (S.C.).This is the case of the Allahabad High Court, referred to above (Dr. Sukh Deo v. C ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d has become entitled to the benefit of buying without payment of tax, violates the condition, under the proviso to section 5(2)(A)(a)(ii) of the Act, the price at purchase point (upon which tax should have been paid if no declaration had been given) is addible to his taxable turnover. In this case, the assessee purchased chemicals. Admittedly, he had resold them not as chemicals, but in a different form. It was not necessary to find out whether there was a manufacturing process carried on by the assessee. If the assessee resold the commodity, he had purchased in terms of the declaration furnished by it, action under the proviso to section 5(2)(A)(a)(ii) of the Act could not be taken. After reviewing a number of cases in S.J.C. No. 326 of 1 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e. This contention seems to be fallacious. It is true, as we have already noticed, that a single point taxation method has been adopted under the Act. But it is too well-known that such a benefit would be available only when the scheme of the Act is followed. Where a registered dealer buys without giving a declaration, he obviously pays tax at the time of purchase and when he sells to an unregistered dealer or a consumer, he pays another set of tax on the same goods. When the registered dealer gives a declaration and buys on its basis without paying the tax, he obliges himself to comply with the terms of the declaration. If he makes a breach, the benefit which he had taken is provided by the statute to be withdrawn and the tax which he woul ..... X X X X Extracts X X X X X X X X Extracts X X X X
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