2016 (12) TMI 67 - HC - VAT and Sales Tax

Levy of Turnover tax - composition/exemption fees - Held that - bare perusal of the Sec. 13A itself makes it explicitly clear when it mentions whose total turnover in a year exceeds 3 lac rupees should mean that it has to be computed on the basis of annual turnover and not on the basis of proportionate or part of the turnover or quarterly basis. Admittedly, Notification dt. 12.7.2004 with regard to the assessment of the turnover tax and the exemption fee in lieu of turnover tax had been rescinded, therefore, assessment of the annual turnover or the exemption fee on any part of the same of the assessee for the assessment year 2003-04, could not be made applicable - petition dismissed.

Summary

Issues:
1. Appeal against order of Rajasthan Tax Board regarding levy of turnover tax, surcharge, and interest.
2. Disagreement between Revenue and assessee on composition/exemption fees.
3. Interpretation of Sec. 13A for turnover tax liability.
4. Comparison with a previous judgment on a similar issue.

Analysis:
1. The High Court heard an appeal by the Revenue against the Rajasthan Tax Board's order dismissing their appeal regarding the levy of turnover tax, surcharge, and interest. The issue at hand was the disagreement between the Assessing Officer (AO) and the assessee regarding the imposition of turnover tax, surcharge, and interest, with the assessee claiming it was not applicable based on composition/exemption fees.

2. The Deputy Commissioner (Appeals) had allowed the appeal, a decision subsequently upheld by the Tax Board. However, the High Court noted a similar issue had been addressed in a previous case, CTO Circle Nagaur Vs. M/s. Sarita General Store, where the Revenue's claim was dismissed based on the provisions of Sec. 13A.

3. The crux of the matter lay in the interpretation of Sec. 13A, which governs the levy of turnover tax. The section mandates that registered dealers with a total turnover exceeding a specified amount are liable to pay turnover tax. The High Court emphasized that the turnover should be computed on an annual basis, not proportionately or quarterly. The court also highlighted the rescission of a relevant notification, rendering the assessment of annual turnover or exemption fee for a specific assessment year inapplicable.

4. Given the precedent set by the judgment in the CTO Circle Nagaur case, where a similar issue was addressed, the High Court found the current petition lacked merit and did not warrant the court's interference. Consequently, the petition was dismissed for being devoid of merits based on the clear interpretation of Sec. 13A and the previous judgment's applicability to the current case.