Big Win for State Tax Laws: 3 Clarifies Purchase Tax Scope “Kerala & Tamil Nadu Sales Tax Laws”
The Supreme Court upheld the constitutional validity of Section 5A of the Kerala General Sales Tax Act and Section 7A of the Tamil Nadu General Sales Tax Act, ruling that purchase tax applies to taxable goods even when sellers are exempt. It clarified that these provisions constitute independent charging sections, ensuring tax collection when goods otherwise escape sale tax due to exemptions or specific transactional circumstances.
Facts Of The Case:
The case involved a batch of appeals concerning the applicability of purchase tax under Section 5A of the Kerala General Sales Tax Act, 1963, and Section 7A of the Tamil Nadu General Sales Tax Act, 1959. The appellants, including C.T. Kochouseph and others, were dealers who had purchased goods from sellers exempted from tax under various gov...