SRI VENKATESWARA RICE, GINNING & GROUNDNUTOIL MILL CONTRACT vs STATE OF ANDHRA PRADESH & ORS.

The Supreme Court held that under Sections 14 and 15 of the Central Sales Tax Act, 1956, groundnut is a declared good, and a State cannot levy purchase tax exceeding 3% at more than one stage. The Court affirmed that the tax liability arises at the point of purchase by the first miller, as specified in Item 6 of the III Schedule of the Andhra Pradesh General Sales Tax Act, 1956. The Court dismissed the appeals, confirming that the purchase of groundnut by the assessees triggered the tax liability, not subsequent processing or sales.