1989 (10) TMI 221 - HC - VAT and Sales Tax

Summary

Issues:
1. Inclusion of consignment sales turnover in total turnover for levy of surcharge.
2. Whether commission received by the assessee from non-resident principals forms part of purchase turnover for assessment purposes.

Analysis:
1. The High Court addressed the issue of including consignment sales turnover in the total turnover for the levy of surcharge under the Kerala General Sales Tax Act. The Revenue contended that consignment sales should be considered in the total turnover as per section 2(xxvi) of the Act. However, the Court disagreed, emphasizing that total turnover encompasses the aggregate turnover of a dealer at all places of business in the State, including inter-State trade, export, and import transactions. Since consignment sales are not within the State or inter-State trade, they fall outside the purview of total turnover for surcharge calculation under the Kerala Surcharge on Taxes Act, 1957. The Court upheld the decision of the Sales Tax Appellate Tribunal in excluding consignment sales from the total turnover calculation, thereby dismissing the Revenue's revisions.

2. The Court also examined whether the commission received by the assessee from non-resident principals should be considered part of the purchase turnover for assessment purposes. The assessee purchased goods taxable in the State and sent them to non-resident principals, completing the purchase transaction. The Court agreed with the Appellate Tribunal's finding that any commission received after the purchase transaction was concluded cannot be included in the purchase turnover of the assessee. Therefore, the commission from non-resident principals does not form part of the purchase turnover for assessment. The Court upheld the Tribunal's decision, stating that the appellate order was legally sound and free from errors.

In conclusion, the High Court dismissed all four revisions brought by the Revenue, as they lacked merit based on the interpretation of relevant provisions of the Kerala General Sales Tax Act and the Kerala Surcharge on Taxes Act, 1957. The Court affirmed the Tribunal's decisions regarding the exclusion of consignment sales turnover from total turnover calculation for surcharge levy and the non-inclusion of commission from non-resident principals in the purchase turnover for assessment purposes.