A dealer becomes liable to pay tax under Sec. 6 of the Karnataka Sales-tax Act, 1957 if they consume purchased goods to produce other goods, whether by manufacture for sale or otherwise.

( 1 ) IN these four connected sales-tax appeals presented by two dealers under section 24 ol the Karnataka Sales-tax Act, 1957 (hereinafter referred to as 'the Act'), the following question of law arises for consideration:"whether the appellants who: as dealers purchased sheep and goats in the course of their business, during the assessment years 1970-71 and, 1971-72, under circumstances in which no tax was leviable on the sale price under Sec. 5 of the Act and who slaughtered the sheep and goats so purchased to produce mutton, hides and skins as part of their business activity were liable to pay tax on the purchase price under s. 6 of the Act?

( 2 ) THE brief and undisputed, facts of the cases are these: The appellants are dealers as defined in Sec. 2 (k) of the Act. Their business is to purchase sheep and goats and to slaughter them and sell the mutton so derived as also the hides and skins. Sheep and goats are taxable goods under the Act in view of the definition of the word 'goods' contained in Sec. 2 (m) of the Act, which reads as follows:"2. (m) 'goods' means all kinds of movable property (other than newspapers, actionable claims, stocks and shares and securities) and includes livestock, all materials, commodities, and articles (including those to be used in the fitting out, improvement or repair of movable property), and all growing crops, grass or things attached to, or forming part of the land which are agreed to be severed before sale or under the contract of sale," (Underlining (italics) by me) W. P. 28/76 etc. The tax payable at the relevant point of time was 3% on the sale price under Sep. 5 (1) of the Act. But under sub-sec. (5) of Sec. 5 a dealer whose total turnover in any year is less than Rs. 25,000/- is not liable to pay tax during that year under sub-sec. (1) of Sec. 5 of the Act. It is common ground that the appellants during the relevant years have purchased sheep and goats from dealers, who are exempted from paying tax on sale price under sub-sec (5) of sec. 5 of the Act i. e. , in a circumstance under which no tax is leviable under Sec. 5 (1) of the Act. On these facts, the additional Commercial-tax Officer, Mangalore, held that the appellants are liable to pay tax on the purchase price of sheep and goats which, they purchased during the assessment years 1970-71 and 1971-72, respectively, as the appellants disposed of the sheep and goats by slaughtering them and selling the mutton, hides and skins so derived in view of Sec. 6 of the act. On appeal, the Deputy Commissioner of Commercial Taxes (Appeals) mangalore, set aside the assessment orders and held that the appellants are not liable to pay tax as they had slaughtered the sheep and goats purchased by them, none of the conditions specified in Sec. 6 of the Act which alone can bring them to tax liability existed. The Commissioner of commercial Taxes, on considering the orders of the Deputy Commissioner was of the view that the orders of the Deputy Commissioner weire, prejudicial to the revenue and therefore, issued notices to the appellants invoking his suo-motu powers under Sec. 22a of the Act. After giving opportunity to the appellants, he held that the appellants were liable to pay tax on the purchase price of sheep and goats during the relevant years and brought them to tax under Sec. 6 of the Act. He assessed the purchase turnovers of Rs. 2,18,500/- and Rs. 2,83,740/- of the appellant in s. T. A. Nos. 28 and 29 of 1976 to tax for the assessment years 1970-71 and and 1971-72, respectively. Similarly he held that the purchase turnover of rs. 1,40,300/- and Rs. 1,75,000/- of the appellant in S. T. A Nos. 15 and 16 of 1976 for the assessment years 1970-71 and 1971-72 respectively, was liable to tax under Sec. 6 of the Act. Aggrieved by these orders, the appellants have presented these appeals under Sec. 24 of the Act.

( 3 ) SHRI K. Srinivasan and Sri S. P. Bhat, learned counsel appeared for the appellants and Sri Rajendra Babu, learned Hi