MOHANLAL HARGOVINDDAS vs STATE OF MADHYA PRADESH & ORS.

The Supreme Court held that under Section 27A of the Central Provinces and Berar Sales Tax Act, 1947, the State of Madhya Pradesh had the authority to impose a tax on inter-State sales, which was validated by the Sales Tax Laws Validation Act, 1956. The Court ruled that the appellant firm was liable for purchase tax on tobacco imported for use as raw material but ultimately exported, as it did not comply with the conditions of its registration certificate. The earlier High Court ruling was set aside, affirming the tax authorities' decision to levy purchase tax on the appellant's transactions.