1972 (9) TMI 127 - HC - VAT and Sales Tax

Summary

Issues:
Assessment of sales tax on medicinal preparations, applicability of exemption notification, assessment of sales tax on tooth-powder, interpretation of taxable turnover for sales tax liability.

Analysis:
The case involved three assessment years where the respondent, an ayurvedic medical practitioner, sold medicines, medicinal oils, and tooth-powder. The assessing officer rejected the turnover shown in the respondent's books and assessed based on his judgment. The respondent claimed exemption under a notification for supplying medicines only to patients. The assessing officer rejected the claim, citing sales to outsiders. The Tribunal disagreed, finding the respondent entitled to the exemption for medicinal preparations supplied to patients only.

Regarding tooth-powder, the assessing officer taxed it at 3% single point based on a court decision. The Tribunal upheld taxation at 2% multi-point but set aside the assessment due to turnover below Rs.10,000 annually. The revenue challenged the Tribunal's decision, arguing tooth-powder sales are taxable and turnover threshold doesn't apply. The High Court agreed, stating the respondent is liable for tax on tooth-powder turnover exceeding Rs.10,000 for 1961-62 and 1962-63. For 1959-60, where turnover was below Rs.10,000, the assessment was rightly set aside. Consequently, one case was dismissed, and two were partially allowed, upholding tooth-powder turnover assessments.

In conclusion, the High Court upheld the exemption for medicinal preparations sold to patients by the respondent. However, it ruled that the respondent is liable to pay tax on tooth-powder turnover exceeding Rs.10,000, contrary to the Tribunal's decision. The judgment clarified the interpretation of taxable turnover for sales tax liability, emphasizing compliance with statutory provisions.