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TMI Blog1995 (9) TMI 341X X X X Extracts X X X X X X X X Extracts X X X X ..... nregistered dealers. In view of two notifications dated July 31, 1985 and March 7, 1986 (annexures C and D) issued by the State Government under section 8A of the Act granting exemption of tax on purchase of "plastic scraps" and sale of "plastic wares" by the manufacturers, petitioners were not liable to levy of either purchase tax or sales tax on their raw materials and finished goods. Nonetheless, since no exemption had been granted in respect of turnover tax under any of the exempting notifications, the assessing authority has levied the same while making the impugned assessments under annexures A and B above. 3.. Sri B.P. Gandhi, learned counsel for the petitioners, has assailed the levy of turnover tax against the petitioners on th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ed by section 3 of the Karnataka Sales Tax (Amendment) Act, 1981 (Karnataka Act 7 of 1981). While the earlier provision envisaged an additional tax being a percentage of tax payable by a dealer, the substituted provisions provided for levy of tax with reference to the total turnover of the dealer at the rates prescribed under the said section. The constitutional validity of the said substituted section 6B was again challenged and a Bench of this Court in the case of Shantilal Brothers v. State of Karnataka [1985] 59 STC 178, rejected all the contentions in the said regard holding the said provision as valid. It was further held that: "The impugned section 6B thus provides for the levy and collection of turnover tax at the rate of one-ha ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... this sub-section, no other deduction shall be made from the total turnover of a dealer for the purposes of this section. ............................." 7.. From a reading of the said provision, it is clear that the turnover tax is levied at a certain percentage of the total turnover of the dealer. The expression "total turnover " has been defined under section 2(u-2) and it reads as under: "u-2. '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, including the turnover of purchase or sale in the course of inter-State trade or commerce or in the course of export of the goods out of the territory of In ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... hase has taken place inside the State: (i) clause (b) of sub-section (3) of section 5; (ii) sub-section (4) of section 5; (iii) section 6." His submission is that since under section 6B(1) of the Act, the tax has to be levied on total turnover, for the said purpose the basis can be only the total turnover as computed under rule 6 of the Rules and not as defined under section 2(u-2) of the Act. According to him, that being the legal position, since the purchase turnover of the petitioners being that of plastic scraps was not liable to any tax under section 6, the same cannot form part of total turnover for the purpose of levy of tax under section 6-B. 10.. In my considered opinion, the submission advanced by Mr. Gandhi is obviously ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ontention of Mr. Gandhi based on section 38(4) of the Act, inter alia, providing therein that the Rules made under the Act "will have the effect as if enacted under this Act" cannot place the rule 6 on any higher pedestal, since now by catena of judgments of the Supreme Court it is well-established that by use of "as if enacted under this Act" formula, the subordinate legislation does not lose its character of being subordinate to the parent Act and the formula does not bestow any additional sanctity to subordinate legislation which, if not made within the strict limits of the authority conferred by the parent Act, is always open to challenge on the ground that it is unauthorised". (see Chief Inspector of Mines v. Karam Chand Thapar AIR 196 ..... X X X X Extracts X X X X X X X X Extracts X X X X
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