9911796707
TMI Blog1990 (11) TMI 395X X X X Extracts X X X X X X X X Extracts X X X X ..... been included in the total turnover upon which the tax had been assessed earlier, amounts to double taxation. 3.. The assessee is a dealer in gold and silver jewellery. He reported a total turnover of Rs. 33,710 for the year 1977-78. The taxing officer examined the accounts and found that the accounts were not correct and complete for certain reasons like high gross profit and non-maintenance of detailed accounts for the stock and made an addition of 10 per cent for the defects and estimated the total turnover at Rs. 37,081 on old jewels purchased after February 19, 1978 at 1 per cent for Rs. 27,543 and again on old jewels purchased between February 20, 1978 and March 31, 1978 at 2 per cent for Rs. 6,397. Having done so, the assessing officer found Rs. 37,081 under the head "sales of gold and silver jewels" after adding 10 per cent for the defects. In addition he treated Rs. 33,940 as the taxable turnover under section 7-A. He accordingly, taxed the total turnover of Rs. 71,021 under section 7 and out of that a sum of Rs. 33,940 separately under section 7-A. The assessee objected to this sort of assessment on the ground that it amounted to double taxation. The Appellate Assistan ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ss than one lakh of rupees but not more than two lakhs of rupees, may at his option instead of paying the tax in accordance with the provisions of that sub-section, pay tax at the following rates, namely: Rate of tax (i) Where the total turnover is not less than one Two thousand five lakh of rupees, but is less than one lakh ten hundred and eighty thousand rupees. rupees per annum. (ii) Where the total turnover is not less than one Two thousand eight lakh ten thousand rupees, but is less than one hundred and eighty lakh twenty thousand rupees. rupees per annum. (iii) Where the total turnover is not less than one Three thousand one lakh twenty thousand rupees but is less than hundred and eighty one lakh thirty thousand rupees. rupees per annum. (iv) Where the total turnover is not less than Three thousand four one lakh thirty thousand rupees, but is less hundred and eighty than one lakh forty thousand rupees. rupees per annum. (v) Where the total turnover is not less than Three thousand seven one lakh forty thousand rupees, but is less hundred and eighty than one lakh fifty thousand rupees. rupees per annum. (vi) Where the total turnover is not less than Four thousan ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ng anything contained in sub-section (1), the provisions of section 7 shall apply to a dealer referred to in sub-section (1) who purchases goods [the sale of which is liable to tax under sub-section (1) of section 3] and whose total turnover for a year is not less than one lakh of rupees but not more than two lakhs of rupees and such a dealer may, at his option, instead of paying the tax in accordance with the provisions of subsection (1), pay tax at the rates mentioned in sub-section (1) of section 7. (3) Every dealer liable to pay purchase tax under sub-section (1), shall, for the purposes of this Act, be deemed to be a registered dealer." 5.. Learned counsel for the petitioner/State has contended that the Appellate Tribunal has not approached the case in accordance with law as it failed to notice that the tax on the total turnover leviable in accordance with section 3 of the Act, was levied at a compounded rate as envisaged under section 7 thereof and the tax under section 7-A thereof was leviable in the circumstances that ornaments purchased by the assessee were either consumed by him in the manufacture of other goods for sale or otherwise disposed of in any manner other th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... levy of purchase tax under section 7-A(1) will be permissible or not. In other words, whether this will amount to double taxation or not. The judgment of the Full Bench however has made our task easier inasmuch as many variations and deviations in the arguments would have consumed lot of our time and pages of this judgment. The Full Bench has concluded that total turnover is the aggregate turnover in all goods of a dealer, whether such turnover is liable to tax or not; the taxable turnover is the turnover on which the dealer is liable to pay tax and is to be determined after making such deductions from the total turnover as may be prescribed; and turnover is the aggregate amount for which goods are bought or sold. Since the turnover includes the amount for which the goods are bought or sold, it looks as if the amount for which all goods are purchased and the amount for which. the same goods are sold, will have to be added together to arrive at the turnover in such cases. The Full Bench has said, "...............However rule 5, which is extracted below, provides that for certain goods mentioned in rule 5(2) the amount for which the goods are purchased by the dealer and for all othe ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... y 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 any portion of such turnover is liable to tax. The definition of 'total turnover' does not give any room for splitting up the 'total turnover' into different total turnovers depending upon the fact whether it is a turnover relating to sales or relating to purchase. Ordinarily, the 'total turnover' referred to in section 2(q), unless limited by express or necessary implication, must take in the aggregate turnover in all goods of a dealer which must necessarily include not only the sales turnover as well as purchase turnover under section 7-A or 4. The word 'turnover' has been defined as the aggregate amount for which goods are bought or sold, or supplied or distributed, by a dealer, 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. The definition, as already noticed, would include the amounts for which goods are bought or sold. It must be n ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tion 4 or 5 or 7-A of the Act. This also cannot be an authority that in a case under which there is taxable turnover under section 3 or 4 or 5 as well as under section 7-A, then the tax compounded would be only for the purpose of section 3(1) and not for the purpose of section 7-A. Given to state, we may have good reasons to agree with the view of the minority judgment by Balasubrhamanyan, J., but we feel it is unnecessary in the instant case to express any dissent with the Full Bench. 8.. Section 7(1) existed from before the introduction of section 7-A in the Act by an amendment in the year 1970. The words used in the section are extracted above. The Legislature evidently could not mention section 7-A therein, but while enacting section 7-A, the Legislature could take notice of the provisions of section 7 of the Act and accordingly in sub-section (2) of section 7-A, it is stated: "Notwithstanding anything contained in sub-section (1), the provisions of section 7 shall apply to a dealer referred to in sub-section (1) who purchases goods the sale of which is liable to tax under sub-section (1) of section 3 and whose total turnover for a year is not less than............" This ..... X X X X Extracts X X X X X X X X Extracts X X X X
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