The exemption of goods at the point of first sale does not negate the liability to tax, and the absence of tax collection does not imply an absence of levy. The levy of purchase tax under Section 5 - A violated the condition of single - stage tax under Section 15 of the Central Sales Tax Act.

Judgment

ASHOK BHAN, J. - Civil Appeals Nos. 2653 and 2654 of 2006 are 9 directed against the impugned final judgment dated 7 - 4 - 2006 of the Kerala High Court at Ernakulam in Writ Appeal No. 434 of 2000 and Writ Appeal No. 433 of 2000 by which the Division Bench dismissed the writ appeals thereby upholding the order of the Single Judge, rejecting the challenge to the two show - cause notices issued to the appellant. Civil Appeal No. 4406 is arising out of judgment dated 7 - 7 - 2006 of the Kerala High Court in Sales Tax Revision No.9 of 2006 by which the Division Bench dismissed the revision relying upon the judgment of the Division Bench in Writ Appeal No. 434 of 2000 of the same High Court.

2. We propose to dispose of these appeals by a common order, as the point involved in all these appeals is the same.

3. Facts are taken from Civil Appeal No. 2653 of 2006.

4. The appellant is a company registered under the Companies Act, having its registered office at Kozikode. It is a registered dealer under the Kerala General Sales Tax Act, 1963 (for short "the State Act"). It carried on the business of steel re - rolling mills at Nallalam, Kozikode. The raw material used by the appellant in the production of bars and rods, is steel ingots, which the appellant either manufactures or purchases from other manufacturers from within or outside the State. Purchase of steel ingots effected by the appellant within the State are from manufacturing units, which are exempt from the payment of sales tax on the sale of such ingots by virtue of an exemption notification issued under Section 10 of the State Act.

5. For Assessment Year 1994 - 95, the appellant submitted a return of turnover and was assessed to tax declaring the taxable turnover as nil, by an order dated 15 - 1 - 1998 by the assessing officer. In respect of Assessment Year 1995 - 96 also, the appellants assessment was completed determining the taxable turnover at Rs 21,85,550 vide order dated 15 - 1 - 1998. While this was so, the appellant received a show - cause notice dated 11 - 1 - 2000 for Assessment Year 1994 - 95 and another notice dated 12 - 1 - 2000 on the same date for Assessment Years 1996 - 97 to 1999 - 2000. In the first show - cause notice relating to Assessment Year 1994 - 95, the assessing officer stated that the appellant had purchased ingots from dealers within the State who were exempted from payment of tax and consumed the same in the manufacture of bars and rods during the year 1994 - 95. The notice further stated that the ingots purchased were goods liable to tax under the State Act and since the supply of such ingots did not suffer any tax at the time of sale due to the exemption notification under Section 10(1) of the State Act, purchase turnover of the ingots during the year and consumed in the manufacture by the appellant attracted liability to tax under Section 5 - A of the State Act. The notice alleged that the purchase turnover of the ingots had escaped assessment under Section 5 - A of the State Act and accordingly proposed to determine the turnover liable to tax and assess the same at 4%. It was stated that on the request of the appellant, a hearing would be given to the appellant before completing the assessment as proposed.

6. Notice relating to 1996 - 97 to 1999 - 2000 was worded differently. The said notice stated that the appellant had purchased ingots, scraps, mosrolls, etc. from units within the State claiming tax exemption and consumed the same in the manufacture of bars and rods during this period. It was further stated that since the goods had not suffered tax under Section 5 of the State Act, they were liable to pay purchase tax under Section 5 - A and called upon the appellant to remit tax with interest under Section 22(3) within 10 days of the receipt of notice failing which an action would be taken to recover the

7. The appellant being aggrieved filed two separate writ petitions challenging the two show - cause notices issued to him. The