(1) Every dealer who in the course of his business purchases any goods specified in Schedule II from any person other than a registered dealer or from a registered dealer in the circumstances in which no tax under Section 8 is payable by that registered dealer on the sale price of such goods except where the goods are tax paid goods within the meaning of clause (x) of Section 2, shall be liable to pay tax on the purchase price of such goods if,-

(a) after their purchase, the goods are not sold within the State of Chhattisgarh or in the course of inter-State trade or commerce or in the course of export out of the territory of India but are sold or disposed of otherwise, or consumed or used in the manufacture of goods declared tax free under Section 15 and Section 15(b) which are disposed off otherwise than by way of sale in the course of export out of the territory of India; or

(b) such goods covered by Part III of Schedule II and/or Schedule III are used or consumed in the manufacture of goods; or

(c) such goods covered by Part I, II and IV of Schedule II and not covered by Schedule III, after use or consumption in the manufacture of any goods specified in Schedule II, the manufactured goods are disposed of otherwise than by way of sale in the State of Chhattisgarh or in the course of inter-State trade or commerce or in the course of export out of the territory of India,

and such tax shall be levied,-

(i) in respect of goods referred to in clauses (a) and (b) at the rate specified in column (3) of Schedule II, and

(ii) in respect of goods referred to in clause (c) at 4% or at the rate specified in column (3) of Schedule II whichever is lower.

Explanation : The rate of tax specified in Schedule II shall be the rate at which tax would have been levied on the sale of such goods within the State on the date of such purchase.

(2) No tax under this Section shall be levied in respect of any year on -

(a) a dealer whose turnover in a year does not exceed the limit prescribed under sub-section (1) of Section 4;

(b) any other dealer who has no turnover, if his aggregate of purchase prices of all the goods does not exceed such amount as may be prescribed.

(3) Every dealer who has no turnover and is liable to pay tax under sub-section (1) shall, for the purpose of Sections 19, 21, 22, 25, 26 and 41 be deemed to be a registered dealer.