Liability to Tax on Purchase of Goods in Certain Circumstances

Liability to tax on purchase of goods in certain circumstances (1) Subject to the provisions of section 3, every dealer who purchases any goods liable to tax under this Act
(a) from any registered dealer in circumstances in which no tax is payable by such registered dealer, shall be liable to pay tax on the purchase price of such goods at the same rate at which, but for such circumstances, tax would have been payable on the sale of such goods;
(b) from any person other than a registered dealer whether or not tax is payable by such person, shall be liable to pay tax on the purchase price of such goods at the same rate at which tax is payable on the sale of such goods:
PROVIDED that no tax shall be leviable on the purchase price of such goods in the circumstances mentioned in clauses (a) and (b), if
(i) such goods purchased from a registered dealer have already been subjected to tax or may be subjected to tax under this Act;
(ii) tax has already been paid in respect of such goods purchased from any person other than a registered dealer;
(iii) the purchasing dealer resells such goods within the State or in the course of inter-State trade or commerce or exports out of the territory of India, in the same form and condition in which he had purchased them;
(iv) such goods are liable to be exempted under section 4A of this Act.
Explanation: For the purpose of this section and of section 3AAA the sale of
(i) ginned cotton after ginning raw cotton purchased as aforesaid; or (ii) dressed hides and skins or tanned leather after dressing or tanning raw hides and skins purchased as aforesaid; or (iii) rice during the period commencing on September 2,1976 and ending with April 30,1977 after hulling paddy purchased as aforesaid, shall be deemed to be in the same form and condition.