CHUNNI LAL PARSHADI LAL vs COMMISSIONER OF SALES TAX, U.P., LUCKNOW

The Supreme Court ruled that under Section 3AA of the Uttar Pradesh Sales Tax Act, 1948, the turnover of cotton yarn is taxable at the point of sale to consumers. The court held that the Sales Tax Officer's assertion that the resale certificates (Form III-A) were 'farzi' lacked evidence, and the mere consumption of goods by purchasers does not negate the sale. Consequently, the court upheld the Appellate Authority's decision that the assessee was not liable for sales tax on the turnover of cotton yarn amounting to Rs. 8,70,810.