The purchase turnover of sand and blue-metal used in the construction of buildings is not liable to tax under section 7-A(1)(a) or (b) of the Tamil Nadu General Sales Tax Act, 1959.

RAMANUJAM, J.

In this tax revision case filed by the revenue, the decision of the Sales Tax Appellate Tribunal holding that the turnover of Rs. 9, 55, 485.78 could not be brought to charge under section 7-A(1)(a) of the Tamil Nadu General Sales Tax Act, 1959, has been challenged.

2. The assessees are building contractors and engineers. For the assessment year 1980-81, they reported a taxable turnover of Rs. 54, 161.96. This however did not include a turnover of Rs. 9, 55, 485.78 which represented the purchase value of sand and blue-metal from unregistered dealers, which the assessee had used in the construction of the buildings. The assessee claimed that the said sum of Rs. 9, 55, 485.78 representing the purchase price of blue-metal and sand cannot be brought to charge under section 7-A of the Act. That contention was negatived by the assessing authority and the said turnover was brought to charge. The matter was taken in appeal to the Appellate Assistant Commissioner, who also sustained the levy under section 7-A of the Act on the said turnover. Thereafter, the matter was taken up in further appeal to the Sales Tax Appellate Tribunal by the assessee denying his liability to be assessed to tax under section 7-A of the Act on the said turnover of Rs. 9, 55, 485.78. The Tribunal, after dealing with the scope of section 7-A(1)(a) of the Act and following the decision of the Andhra Pradesh High Court in Nandanam Construction Co. v. Assistant Commissioner, held that section 7-A(1)(a) of the Act will not apply to the disputed turnover of Rs. 9, 55, 485.78 as the assessee had purchased sand and blue-metal only for the construction of the buildings and not for the manufacture of other goods for sale. In that view, the Tribunal set aside the assessment on the disputed purchase turnover.

3. According to the learned Additional Government Pleader, the facts of this case attract the decision of the Supreme Court in Ganesh Prasad Dixit v. Commissioner of Sales Tax and in so far as the decision of the Andhra Pradesh High Court in Nandanam Construction Co. v. Assistant Commissioner is inconsistent with the said decision of the Supreme Court in Ganesh Prasad Dixit v. Commissioner of Sales Tax the Tribunal should not have applied the decision of the Andhra Pradesh High Court. Before considering the various decisions referred to by the learned Additional Government Pleader in support of his case that the disputed purchase turnover can be assessed under section 7-A(1)(a) of the Act, we would like to refer to the said provision.

Section 7-A runs as follows :

"7-A. Levy of purchase tax. - (1) Every dealer who in the course of his business purchases from a registered dealer or from any other person, any goods (the sale or purchase of which is liable to tax under this Act) in circumstances in which no tax is payable under section 3, 4 or 5, as the case may be, and either,

(a) consumes such goods in the manufacture of other goods for sale or otherwise; or

(b) disposes of such goods in any manner other than by way of sale in the State; or

(c) despatches them to a place outside the State except as a direct result of sale or purchase in the course of inter-State trade or commerce,

shall pay tax on the turnover relating to the purchase as aforesaid at the rate mentioned in section 3, 4 or 5, as the case may be, whatever be the quantum of such turnover in a year." *

Section 7-A(1) consists of three clauses. However, on the facts of this case, clause (c) cannot obviously apply. The contention of the learned Additional Government Pleader is that even if clause (a) of section 7-A(1) is held not to apply to the facts of this case, clause (b) thereof may apply. We have, therefore, to consider the scope of clauses (a) and (b) of section 7-A(1) of the Act, to find out whether the disputed purchase turnover could be assessed under either of these clauses. Clause (a) can be applied only when the goods purchased had been consumed in the manufacture of other goods