Madras Refineries Ltd vs State Of Tamil Nadu

The Supreme Court ruled that under the Tamil Nadu General Sales Tax Act, the amount received by the appellant from the industrial pool account cannot be included in the taxable turnover as it does not constitute the first sale in the State, per Explanation 1 of the Act. The Court emphasized that since the sales were made to an oil company, the transaction is exempt from sales tax. Consequently, the notices issued to include this amount in the turnover were quashed, and the assessing authority was directed to proceed accordingly.