Madras High Court
State of Tamil Nadu v. I. Vetrivel
Purchase tax under TNGST and TNVAT was leviable on sand, gravel and jelly purchased from unregistered dealers and used in works contracts; Constitution Bench precedent affirmed such levy, and orders of first appellate authority and Tribunal annulling purchase tax were perverse and set aside, restoring assessments. TNGST: Purchase tax under Section 7-A under TN General Sales Tax Act, 1959 was validly leviable on materials purchased from unregistered dealers for works contracts; Section 7-A operated independently of Section 3-B, which governed taxable turnover of transfer of property, and non obstante clause did not exclude purchase tax on goods not previously tax-suffered. VAT: Purchase tax and penalty were validly leviable on materials purchased from unregistered dealers and used in works contracts; upon upholding purchase-tax liability, returns would become incorrect and incomplete, attracting statutory penalties under both TNGST and TNVAT enactments, and assessee’s challenge was to be dismissed