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TMI Blog1983 (2) TMI 273X X X X Extracts X X X X X X X X Extracts X X X X ..... rge under section 3(1) is a cumulative sales tax, and the turnover which is taxed the total sales turnover. The dealer who sells the goods effects the sales turnover, and he is the person who is charged to tax on that turnover. In the year, 1970, the State Legislature introduced a scheme of purchase tax as complimentary or supplementary to the general cumulative sales tax under section 3(1). This was done by introducing in the Act, section 7-A. It is now settled that section 7-A is a new and separate charging section different and distinct from section 3 of the Act. Under section 7-A, tax is charged on the purchase turnover of a dealer where the goods purchased by him have not borne tax at the point of sales when the goods were purchased by him, as a tax levied on his selling dealer. If these two are separate charging sections, namely, section 3(1), on the one hand, and section 7-A, on the other, then it stands to reason that although they appear in one and the same enactment, the turnover of sales and the turnover of purchases, although of the same assessee's cannot be clubbed together for any purpose connected with his assessment. Section 3(1) says that the liability for the ta ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... and the purchase turnover assessable under section 7-A(1), on the other, were distinct and separate subjects of charge and hence the turnover under both the heads cannot under any circumstances, be clubbed, just for the sake of arriving at the target of Rs. 50,000 and charging the tax either under section 3(1) or section 7(1) of the Act. This contention was accepted by the Tribunal. The other argument addressed by the assessee before the Tribunal was that even as respects the purchase turnover of Rs. 39,721.40 since it was below the non-taxable maximum of Rs. 50,000 falling under the proviso of section 7-A(1) of the Act, the levy of purchase tax on that sum was also not proper. In this revision brought by the State Government, the main question argued by the learned Government Pleader was that for the purpose of assessment in this case, the aggregate sales turnover of Rs. 46,931 must be clubbed with the aggregate purchase turnover of Rs. 39,721 and that should be the proper thing to do even for purposes of an assessment made under section 7(1) under compounded rates. The contention of the learned counsel for the assessee, on the contrary, is that since the aggregate sales turnov ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... w that purchase tax under section 7-A is only on the goods purchased which did not suffer tax earlier as part of the sales turnover of the selling dealer under section 3(1) or section 7(1), as the case may be. It is quite clear that the expression "total turnover" which is found in section 3(1) of the Act is, and must be, different from the expression "turnover" occurring in section 7-A(1) of the Act. The two are different in kind, and separated by time. It follows that in the matter of the charge also, they must stand separate. When the Act deals separately with the two, it cannot be in consonance with the construction of the statute to mix up, or club, the two different turnovers for the purpose of arriving at "total turnover" for the purpose of assessment under the Act. We have earlier referred to the fact that under section 3(1), what is subjected to charge is only the total sales turnover. A study of the words of charge in section 3(1), however, would show that the language used therein is strictly neutral. It is, on its terms, capable of referring not only to the sales turnover but also to the purchase turnover during a year. The words are: "Every dealer................wh ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... gregate sales turnover of a dealer in a year with aggregate purchase turnover of the same dealer in the same year for the purpose of deciding whether he is to be brought within the ambit of the charge or left out. The difficulty in fitting the language of section 3(1) with the new found levy under section 7-A in the Act would be inseparable if the expression "total turnover" were given the meaning of a combined purchase-cum-sale total turnover. It would have been observed that section 3(1) retains its original format unchanged even after section 7-A had been introduced. This is another reason to hold that it had the same meaning before that it has now, and the meaning has not changed. The learned Government Pleader offered the construction that the definition of "turnover" up to 26th November, 1969, that is to say, up to the time when section 7-A was introduced, would relate only to sales turnover and not the purchase turnover, but subsequently the same definition would include a combined sales and purchase turnover. We cannot accept this approach to interpretation. We know of the compulsions and exigencies that may demand the court having to construe the same word occurring in ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... o the tune of Rs. 39,721. The assessee filed a return declaring his sales turnover at Rs. 46,931 and the purchase turnover at Rs. 25,653. Before the assessing authority, the assessee contended that he was not liable to pay purchase tax under section 7-A(1) of the Act in view of the fact that his purchase turnover of old jewellery was below Rs. 50,000. The assessing officer added 5 per cent to the sales turnover returned by the assessee and determined the same at Rs. 49,278. He accepted the figure of Rs. 25,653 returned by the assessee as the purchase turnover under section 7-A(1) of the Act. The assessing authority added the sales turnover and the purchase turnover and levied a tax of Rs. 1,800 under section 7 and an additional tax of Rs. 1,026 on the purchase turnover of Rs. 25,653 at 4 per cent under section 7-A of the Act. The assessee preferred an appeal before the Appellate Assistant Commissioner. The appellate authority deleted the addition of 5 per cent added by the assessing authority to the sales turnover and accepted the figure of Rs. 46,931 returned by the assessee. The appellate authority, however, on the enhancement petition filed by the revenue added a further sum of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... -A have to be aggregated. We are concerned, as already stated, with the correctness of the said view taken in these decisions. The Sales Tax Act is essentially a law imposing tax on the sale of goods. The Act was first introduced in 1939. It underwent many amendments. In the year 1959 the Tamil Nadu General Sales Tax Act, 1959, was passed to consolidate and amend the laws relating to the levy of a general tax on the sale or purchase of goods in the State of Tamil Nadu. In order to consider the question of law arising for our consideration, it is necessary to set out the relevant sections of the Act. Section 3(1) of the Act which is the main charging section reads thus: "3. (1) Every dealer (other than a casual trader or agent of a non-resident dealer) whose total turnover for a year is not less than fifty thousand rupees and every casual trader or agent of a non-resident dealer, whatever be his turnover for the year, shall pay a tax for each year at the rate of four per cent of his taxable turnover: Provided that (i) in the case of rice products (for example, rice flour and rice bran), milk, fresh vegetables (other than those mentioned in the First Schedule), fresh fruits ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ler, either directly or through another, on his own account or on account of others whether for cash or for deferred payment or other valuable consideration, provided that the proceeds of the sale by a person of agricultural or horticultural produce, other than tea grown within the State by himself or an any land in which he has an interest whether as owner, usufructuary mortgagee, tenant or otherwise, shall be excluded from his turnover." Section 2(q) defines "total turnover" thus: " 'total turnover' means the aggregate turnover in all goods of a dealer at all places of business in the State, whether or not the whole or any portion of such turnover is liable to tax." Section 2(p) defines "taxable turnover" thus: "'taxable turnover' means the turnover on which a dealer shall be liable to pay tax as determined after making such deductions from his total turnover and in such manner as may be prescribed." From the above it is clear that "total turnover" is the aggregate turnover in all goods of a dealer, whether such turnover is liable to tax or not. "Taxable turnover" is the turnover on which the dealer is liable to pay tax and is to be determined after making such deductions ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n those falling under sub-section (viii) of item 6 of the Second Schedule], (k2) coconut [i.e., copra excluding tender coconuts (cocos nusifera)], (l) raw rubber, namely, latex, (m) cashewnut and kernel, and (n) prawns, lobsters, crabs, frogs and frog legs." Rule 5-A deals with the amounts which shall not be included in the total turnover of a dealer in pursuance of explanation (2) to section 2(r) of the Act subject to the conditions specified therein. Rule 5-13 deals with the claim for adjustment or refund of the tax made under sub-section (5) of section 13. Rule 6 specifies the amounts to be deducted from the total turnover of a dealer in determining his taxable turnover. Rule 7 deals with the filing of return by the dealer having more than one place of business and the head office within the State of Tamil Nadu. Rule 9 deals with submission of returns by every dealer who is liable to pay tax under section 3(2) or section 4 or section 5 and every agent of a non-resident dealer. It also deals with the submission of return by every dealer except a casual dealer whose estimated total turnover for that year of his business is not less than Rs. 50,000. The rest of the rules ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e course of inter-State trade or commerce, shall pay tax on the turnover relating to the purchase aforesaid at the rate mentioned in section 3, 4 or 5, as the case may be, whatever be the quantum of such turnover in a year: Provided that a dealer (other than a casual trader or agent of a nonresident dealer) purchasing goods the sale of which is liable to tax under sub-section (1) of section 3 shall not be liable to pay tax under this sub-section, if his total turnover for a year is less than fifty thousand rupees. ..................................................................................................." In State of Tamil Nadu v. Kandaswamy [1975] 36 STC 191 (SC) the the Supreme Court has specified the ingredients of sub-section (1) of section 7-A thus: "(1) The person who purchases the goods is a dealer; (2) The purchase is made by him in the course of his business; (3) Such purchase is either from 'a registered dealer or from any other person'; (4) The goods purchased are 'goods, the sale or purchase of which is liable to tax under this Act'; (5) Such purchase is 'in circumstances in which no tax is payable under section 3, 4 or 5, as the case may be'; ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... is to be noted that section 7-A is not subject to section 3; it is by itself a charging provision. Section 7-A brings to tax goods the sale of which would normally have been taxed at some point in the State, subsequent to their purchase by the dealer if those goods are not available for taxation owing to the act of the dealer in (a) consuming them in the manufacture of other goods for sale or otherwise, or (b) despatching them in any manner other than by way of sale in the State, or (c) despatching them to a place outside the State except as a direct result of sale or purchase in the course of inter-State trade or commerce. Ingredients (4) and (5) are not mutually exclusive and the existence of one does not necessarily negate the other. Both can co-exist and in harmony. Ingredient (4) would be satisfied if it is shown that the particular goods were 'taxable goods'; i.e., the goods, the sale or purchase of which is generally taxable under the Act. Notwithstanding the goods being 'taxable' goods', there may be circumstances in a given case, by reason of which the particular sale or purchase does not attract tax under section 3, 4 or 5. Section 7-A provides for such a situation and ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nd which after the purchase, have been dealt by him in any of the modes indicated in clauses (a), (b) and (c) of section 7-A(1)." It is therefore clear that section 7-A is an independent charging section. It imposes a liability on a dealer to pay tax on his purchase turnover with regard to goods the sale or purchase of which though generally liable to tax under the Act have not, due to circumstances of particular sales, suffered tax under section 3, 4 or 5 and which after the purchase have been dealt by him in any of the modes indicated in clauses (a), (b) and (c) of section 7-A(1). The argument of the learned Advocate-General is that for the purpose of determining the total turnover of a dealer, the turnovers of all the goods must be aggregated. This is so because the total turnover is defined in the Act as meaning of aggregate turnover in all goods of a dealer. According to the learned Advocate-General the turnover of goods covered by sections 3, 4, 5 and 7-A will have to be added for the purpose of finding out the total turnover and if such total turnover is not less than Rs. 50,000 then the dealer is liable to pay tax as per section 3(1) or 7(1). In addition to this, the de ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... han say that, where you find these words in the Act, they shall, unless there be something repugnant in the context or in the sense, include fixtures.' So the words 'any person' in the Solicitors Act, 1932, were held not to include a body corporate, but only such person as could become a solicitor, in spite of section 2 of the Interpretation Act, which enacts that 'person' shall include a body corporate unless a contrary intention appears." In Dhandhania Kedia Co. v. Income-tax Commissioner AIR 1959 SC 219 the question for consideration was the meaning to be attached to the word "previous year". It was contended before the Supreme Court that the expression "previous year" used in section 2(6A)(c) of the Income-tax Act, 1922, as amended in 1939, should be given the same meaning as given in the definition clause of section 2(11). Venkatarama Aiyar, J., observed as follows: "The argument of Mr. Sharma for the appellant is that section 2(11) having defined the meaning which the expression 'previous year' has to bear in the Act, that meaning should, according to the well-settled rules of construction, be given to those words wherever they might occur in the statute, and that tha ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... context'. Therefore, the expression 'court' will have to be understood as defined in section 2(c) of the Act, only if there is nothing repugnant in the subject or context. It is in that light that the expression 'court' occurring in section 14(2) of the Act will have to be understood and interpreted." In Vanguard Fire and General Insurance Co. Ltd. v. Fraser and Ross AIR 1960 SC 971 Wanchoo, J., speaking for the court stated the ratio thus: "It is well-settled that all statutory definitions or abbreviations must be read subject to the qualification variously expressed in the definition clauses which created them and it may be that even where the definition is exhaustive inasmuch as the word defined is said to mean a certain thing, it is possible for the word to have a somewhat different meaning in different sections of the Act depending upon the subject or the context. That is why all definitions in statutes generally begin with the qualifying words similar to the words used in the present case, namely, unless there is anything repugnant in the subject or context. Therefore, in finding out the meaning of the word 'insurer' in various sections of the Act, the meaning to be ordi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he rate mentioned in section 3, 4 or 5, as the case may be. Section 7-A further provides that the tax payable in such circumstances shall be on the turnover relating to the purchases whatever may be the quantum of such turnover in a year. The proviso to section 7-A states that a dealer who purchases goods in the circumstances mentioned in the enacting section shall not be liable to pay tax under section 7-A(1) if his total turnover for a year is less than Rs. 50,000. A reading of section 7-A(1) of the Act with the proviso as a whole, the inference that one gets is that the word "total turnover" used in the proviso has been used in the same sense in which it has been defined in section 2(q) of the Act. Such an interpretation, if placed on the expression "total turnover" found in the proviso, would be in harmony with the scheme of the Act and would not in any way be repugnant to the enacting part of section 7-A(1). We have already seen that section 2(q) defines the "total turnover" as the aggregate turnover in all the goods of a dealer at all places of business in the State, whether or not the whole or ally portion of such turnover is liable to tax. The definition of "total turnover" ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... g section and it levies tax on certain declared goods at the rate and only at the point specified against each in the Second Schedule on the turnover in such goods in each year, whatever be the quantum of turnover in that year. A perusal of the Second Schedule would show that taxes are levied on certain items at the point of the last purchase in the State. In such cases, the total turnover of the dealer must definitely include the purchase turnover of declared goods. In this connection, it will be useful to refer to two decisions of this Court. In State of Madras v. Eastern Supplies [1954] 5 STC 344; [1954] 2 MLJ 548 which was a case under the Madras General Sales Tax Act, 1939, one of the questions that arose for decision was whether groundnuts could be taxed only at the point of sale and not at the point of purchase. A Bench of this Court held that for the purpose of determining the turnover one had to fall back upon the charging section, section 3, which directed that every dealer should pay for each year tax on his total turnover, and that the turnover as provided by sub-rule (4) of section 3 for the purpose of taxation, should be determined in accordance with the rules enacted ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... on a further verification of the assessment files found that a turnover of Rs. 9,44,156.90 would be liable to tax under section 5 of the Act. It was contended before this Court that the entire turnover of Rs. 5,30,92,979.52 was the subject of the assessment under section 3(1) and therefore there was no room for application of section 5. In other words, it was contended that inasmuch as the turnover under section 5 had already been included in the total turnover, the turnover under section 5 should not be singled out for being charged separately. The argument was not accepted by a Bench of this Court. It was held that "it is not unusual that where a turnover of sales, when split up, is found to contain a variety of transactions which are differently dealt with for the purpose of charging under the Sales Tax Act, it is no argument because there is a compendious assessment that the sales, which attract the special charge, could not be separated from assessment". This decision shows that for the purpose of arriving at the total turnover for the purpose of section 3(1), the turnover under section 3(1) as well as the turnover under section 5 have to be clubbed together. When once I fin ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ral language of a statue, the legislature, unfortunately, does not always use it with technical correctness. Consequently, where its use creates an ambiguity it is the duty of the court to ascertain the legislative intention, through resort to the usual rules of construction applicable to statutes generally, and give it effect even though the statute is thereby enlarged or the proviso made to assume the force of an independent enactment, and although a proviso as such has no existence apart from the provision which it is designed to limit or to qualify. It should also be construed in harmony with the rest of the statute, or as the court stated in Foster v. United States 47 Fed (2) 892: 'It may be said in general that every part of the Act must be given effect where it is possible so to do, and that a proviso should, in general be construed as a limitation or qualification upon the otherwise general application of the statute. Whether in a given case the proviso does in fact limit or qualify, and if so, to what extent, depends primarily on the proviso itself...........' As a general rule, however, the operation of a proviso should be confined to that clause or portion of the s ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... in the circumstances mentioned in the section "whatever be the quantum of such turnover". If the total turnover referred to in the proviso has to mean only the purchase turnover referred to in section 7-A(1), the legislature would not have used the words "whatever be the quantum of such turnover". On the other hand, the legislature could have avoided the proviso and would have stated that every dealer who in the course of his business purchases from a registered dealer or from any other person, any goods (the sale or purchase of which is liable to tax under this Act) in circumstances in which no tax is payable under section 3, 4 or 5, as the case may be, and either, (a) consumes such goods in the manufacture of other goods for sale or otherwise; or (b) disposes of such goods in any manner other than by way of sale in the State; or (c) despatches them to a place outside the State except as a direct result of sale or purchase in the course of inter-State trade or commerce, shall pay tax on the turnover relating to the purchase aforesaid at the rate mentioned in section 3, 4 or 5 as the case may be, if the turnover exceeded Rs. 50,000. Further the necessity for the insertion of the pr ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... any goods and dealt with it in the manner specified in the section itself. Therefore, there is no necessity at all for making any rule providing for the inclusion of the goods covered by section 7-A(1) in the total turnover of a dealer in the Rules. Therefore, the argument of the learned counsel for the assessee that the Rules do not provide for the inclusion of the goods covered by section 7-A(1) in the total turnover of a dealer carries no conviction and the same is rejected. I shall now refer to the two decisions of this Court, viz., Mohanlal v. Commissioner of Commercial Taxes [1979] 43 STC 433 and Chennakesavalu v. Board of Revenue [1981] 47 STC 403. In Mohanlal v. Commissioner of Commercial Taxes [1979] 43 STC 433 a Bench of this Court speaking through Govindan Nair, C.J., held as follows: "The appellant has admittedly a turnover relating to sales amounting to Rs. 43,359.58. It is also admitted that the turnover of Rs. 14,717.50 is also taxable by virtue of the provisions of section 7-A. The two together exceed the Rs. 50,000 limit mentioned in section 3(1) and so the appellant is liable to pay tax under the Act. But it was contended before us by the counsel for the appel ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tly, the Act contemplates only one 'total turnover' and not different total turnovers and hence the 'turnover' under section 7-A as well as the 'turnover' under section 3(1) had to be aggregated for the purpose of finding out the 'total turnover' under the Act and for determining the taxable turnover." Then dealing with the argument based on rule 5 of the Rules and after extracting rule 5(1) and (2) the learned Chief justice has observed as follows: "Relying upon this rule 5, the learned counsel for the appellant contends that the rule contemplates two turnovers, one being a sales turnover and the other, purchase turnover and therefore there is nothing wrong in the appellant claiming two reliefs, one under section 7(1) and the other under section 7(1) read with section 7-A(2) of the Act. It is worth-while pointing out that the rules themselves referred to the total turnover propounded by them as only for the purpose of the Rules and not for the purpose of the Act. As we pointed out already, section 2(q) of the Act defines the expression 'total turnover', and that takes in every turnover whether liable to tax or not. In any event, rule 5 cannot override section 2(q). We are fortif ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ment before us, submitted that the crux of section 7(1) lies in the use of the expression "total turnover" and the proper meaning to be attributed to that expression. In the two cases under consideration, the learned judges considered the expression "total turnover" occurring in section 7(1) as bearing the meaning assigned to it in the interpretation clause in section 2(q) of the Act. Pursuing the line of reasoning adopted by the learned Judges in those decisions, the learned Advocate-General referred us to the definition of "total turnover" occurring in section 2(q) of the Act. As preliminary to an understanding of the definition of "total turnover" the learned Advocate-General invited our attention to the definition of the expression "turnover" occurring in section 2(r) of the Act. Excluding words of the definition which are unnecessary for the present discussion, the expression "turnover" is defined in section 2(r) as the aggregate amount for which goods are bought or sold by a dealer. The expression "total turnover" in section 2(q) is defined, as the aggregate turnover in all goods of a dealer, whether or not the whole or any portion of such turnover is liable to tax. In the li ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... f the aggregate amount for which goods are bought or sold, section 2(q) only reiterates the same idea by referring to the aggregate turnover. I have earlier shown how and why under section 2(r) purchase turnover and sales turnover must be kept distinct and separate. It follows that under section 2(q) also purchase turnover and sales turnover must be kept distinct and separate. There is nothing in section 2(q) which forces anyone to combine both the purchase turnover and the sales turnover and arrive at a grand total, as it were. We were referred to a further distinction in the statute between total turnover and taxable turnover. But the definition of taxable turnover does not support the learned Advocate-General's thesis that total turnover must be regarded as a combination of both the purchase and sales turnover. The learned Advocate-General submitted that the pertinent issue in this case is not whether total turnover means the sum-total of the purchases of goods, on one side of the trading account and the sales of the same goods, on the other side of the trading account. The learned Advocate-General said that to consider this as the issue in this case would be to misunderstand ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Schedule to the Act. Apart from single point levy on transactions in declared goods, even as respects non-declared goods, there is a single point levy in as many as 149 items. See section 3(3) and the First Schedule to the Act. Moreover, there is also a regular purchase tax on registered dealers who purchase goods in inter-State transactions covered by C form declarations. See section 5 of the Act. As if these taxes were not enough, there is a recent purchase tax by way of "mopping up operations " to bring to charge the turnover in purchases of goods where, subsequent to the purchases, the goods take to some different course or undergo some change in their character which puts them out of the reach of the other taxing provisions in the Act. See section 7-A(1) of the Act. Courts have held that each of these levies is an independent tax in itself. Vide Sivamurugan v. Assistant Commercial Tax Officer [1970] 26 STC 68 and State of Tamil Nadu v. Kandaswami [1975] 36 STC 191 (SC). In the face of the statutory scheme, it is a thorough-going misconception of the idea of total turnover to assert that there can be only one total turnover under the Act. In income-tax there can only be one ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ely because subsequently the legislature had introduced section 7-A in the Act, so long as neither the definition of the two expressions nor the structure of section 3(1) and section 7(1) had been altered to the least extent. Section 7-A has only engrafted into the existing enactment yet another tax, namely, purchase tax, to add to the existing bunch of taxes under the Act. The arrival of this section has no repercussions on the meaning of other provisions in the Act, because of the absence of an express amendment of those provisions and because of the newly introduced provision not being invested with an overriding force or effect. I am accordingly of the view that what the expressions "turnover" and "total turnover" meant before the introduction of section 7-A remained unsullied even after section 7-A came into the statute book. I have so far dealt with the contentions put forward by the learned Advocate-General on a consideration of the textual aspects of the provisions of the Act and found that those contentions are not based on a reasonable view of the statutory provisions. It is also possible to demonstrate that the assessee's stand on the question of construction actua ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Sales of new jewels Rs. 43,359.58 Purchase turnover in old jewels Rs. 14,717.50. In this case also if the assessee had not opted for compounded assessment under section 7(1) of the Act, he would not be liable for sales tax under section 3(1) on the turnover of Rs. 43,359.58 because it is less than Rs. 50,000 nor could he be rendered liable for purchase tax under section 7-A(1) because purchase turnover is also less than Rs. 50,000. The assessing authority, however, combined both the turnovers for the purpose of maintaining a compounded assessment. In Chennakesavalu v. Board of Revenue [1981] 47 STC 403, the position was slightly different. The assessee's sales turnover in finished silver articles was Rs. 67,900.70. Purchase turnover in old jewels was Rs. 15,431.09. The assessee opted for compounded assessment under section 7(1). The assessing authority combined the two turnovers on which compounded rate must be applied. The judgment does not show the particular assessment year which was in question in that case. Applying current rates of compounded assessment under section 7(1), on Rs. 83,331.79 the tax would be Rs. 1,560 whereas the compounded rate of Rs. 67,900.70 which repr ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r rejecting the construction from which these results flow. The proof of the pudding is in the eating. The validity of a statutory construction stands proved by the reasonable results that follow its application, as a general rule. The invalidity of a statutory construction is proved by the monstrous results of its application, again, as a general rule. The illustrations furnished by the case on hand as well as the earlier Bench rulings are not exceptional; they are quite typical. On my reading of the provisions of the Act, therefore, wherever the expression "total turnover" occurs it has got to be given one of the two meanings either total purchase turnover or total sales turnover, and that meaning has to be given which is appropriate to the particular context of the particular charging provision relating to the particular tax. In section 7(1), the expression "total turnover" means only "total sales turnover", because that is its meaning under section 3(1). By the same token, the expression "total turnover" as applied to section 7-A(2) of the Act must be "total purchase turnover", because that is the meaning of the expression in the proviso to section 7-A(1). I accordingly hold ..... X X X X Extracts X X X X X X X X Extracts X X X X
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