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TMI Blog1987 (11) TMI 352X X X X Extracts X X X X X X X X Extracts X X X X ..... e proviso, clause (i) of sub-section (2A) imposes what is called a turnover tax at the rate of half per centum on the turnover of goods coming under the First or Fifth Schedule to the Act of every dealer whose total turnover in a year exceeds Rs. 25 lakhs. Clause (i) of sub-section (2A) omitting the proviso is extracted below: "Notwithstanding anything contained in this Act or the rules made thereunder, every dealer whose total turnover in a year exceeds rupees twenty-five lakhs shall pay turnover tax at the rate of half per centum on the turnover of goods coming under the First or Fifth Schedule to this Act." Section 2(xxvii) of the Act defines "turnover" to mean "the aggregate amount for which goods are either bought or sold, supplied o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s therefore contended that even turnover covered by article 286 of the Constitution would fall under the concept of the total turnover and to classify a dealer based on the turnover covered by article 286 for the purpose of levy, according to the counsel for the petitioners, is beyond the legislative competence of the State Legislature. 5.. These questions raised in these original petitions are covered by the decisions of the Supreme Court in S. Kodar v. State of Kerala [1974] 34 STC 73; AIR 1974 SC 2272, Hoechst Pharmaceuticals Ltd. v. State of Bihar [1984] 55 STC 1; AIR 1983 SC 1019 and K.M. Mohamed Abdul Khader Firm v. State of Tamil Nadu [1985] 58 STC 12; AIR 1985 SC 12. 6.. The Kodar's case [1974] 34 STC 73 (SC); AIR 1974 SC 2272 rel ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d (g) of the Constitution was also negatived for the following reason stated at page 77 of STC; 2275 of AIR: "15. As we said, the additional tax is a tax upon sales of goods and not upon the income of a dealer and so long as it is not made out that the tax is confiscatory, it is not possible to accept the contention that because the dealer is disabled from passing on the incidence of tax to the purchaser, the provisions of the Act impose an unreasonable restriction upon the fundamental rights of the appellants under article 19(1)(g) or 19(1)(f)." 7.. The Hoechst Pharmaceuticals' case [1984] 55 STC 1 (SC); AIR 1983 SC 1019 related to the validity of section 5(1) of the Bihar Finance Act, 1981 providing for the levy of a surcharge on every ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he liability to pay a surcharge is not on the gross turnover including the transactions covered by article 286 but is only on inside sales and the surcharge is sought to be levied on dealers who have a position of economic superiority. The definition of 'gross turnover' in section 2(j) of the Act is adopted not for the purpose of bringing to surcharge inter-State sales or outside sales or sales in the course of import into, or export of goods out of the territory of India, but is only for the purpose of classifying dealers within the State and to identify the class of dealers liable to pay such surcharge. The underlying object is to classify dealers into those who are economically superior and those who are not." 8.. In Mohamed Abdul Khade ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sessed under the Sales Tax Act. It is stated at page 16 of STC 15 of AIR: "The nature and identity of the additional sales tax imposed by the 1970 Act have not been in any way altered by the impugned Act. As already pointed out what has been done by the impugned Act is only to provide for a different mode of computation of the additional sales tax by linking the rate of the levy to the taxable turnover instead of to the amount of tax assessed under the Act of 1959. The constitutional validity of the levy of additional tax is not in any manner affected by the said change brought about in the mode of levy and computation as a result of the amendments effected by the impugned Act." The decision of the Supreme Court is an authority for the pr ..... X X X X Extracts X X X X X X X X Extracts X X X X
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