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Commissioner of Sales Tax Vs. Chandra Oil Mills - Court Judgment

LegalCrystal Citation
SubjectSales Tax
CourtAllahabad High Court
Decided On
Case NumberSales Tax Reference No. 125 of 1970
Judge
Reported in[1971]28STC481(All)
AppellantCommissioner of Sales Tax
RespondentChandra Oil Mills
Advocates:Standing Counsel
Excerpt:
- - 2,352.18. the assessee appealed and his appeal was dismissed on the ground that he had failed to deposit the admitted tax......of the u.p. sales tax act with the following question of law for the opinion of this court:whether inter-state sales will form part of the gross turnover 2. the assessee is a dealer in oil, oil-cakes and tins. in the assessment year 1961-62, he returned a gross turnover of rs. 53,794.57. he was assessed to sales tax for a sum of rs. 2,352.18. the assessee appealed and his appeal was dismissed on the ground that he had failed to deposit the admitted tax. on revision, the revising authority found that the gross turnover of the assessee included inter-state sales and if such inter-state sales were excluded, the figure of gross turnover would be less than rs. 12,000, which is the minimum turnover exempt from tax. accordingly, he held that the assessee was not liable to pay tax at all on his.....
Judgment:

R.L. Gulati, J.

1. At the instance of the Commissioner of Sales Tax, Lucknow, the Additional Revising Authority, Sales Tax, Allahabad, has submitted this statement of the case under Section 11(3) of the U.P. Sales Tax Act with the following question of law for the opinion of this Court:

Whether inter-State sales will form part of the gross turnover

2. The assessee is a dealer in oil, oil-cakes and tins. In the assessment year 1961-62, he returned a gross turnover of Rs. 53,794.57. He was assessed to sales tax for a sum of Rs. 2,352.18. The assessee appealed and his appeal was dismissed on the ground that he had failed to deposit the admitted tax. On revision, the revising authority found that the gross turnover of the assessee included inter-State sales and if such inter-State sales were excluded, the figure of gross turnover would be less than Rs. 12,000, which is the minimum turnover exempt from tax. Accordingly, he held that the assessee was not liable to pay tax at all on his admitted turnover and, therefore, his appeal had been wrongly rejected by the appellate authority. He accordingly set aside the order of the appellate authority and remanded the case for disposal on the merits. The Commissioner is aggrieved and has caused this reference to be brought before this Court.

3. Under Section 3, which is the charging section, every dealer is liable to pay tax for each assessment year at the rate specified therein on his turnover of such year, provided that a dealer shall not be liable to pay tax if his turnover of the assessment year is less than Rs. 12,000 or such larger amount as may be notified by the State Government. Rule 8 of the U.P. Sales Tax Rules provides that a dealer is liability to pay tax under the Act shall be determined on the basis of his gross turnover. 'Gross turnover' has not been defined in the Act or under the Rules; but in common parlance, this expression means the aggregate of all sales effected by a dealer. Admittedly, the tax is payable on the net turnover which means gross turnover minus the turnover of sales which are not liable to tax. Inter-State sales are admittedly not liable to tax under the U.P. Sales Tax Act. The question is whether such sales can be included in the gross turnover so as to determine as to whether the assessee's turnover is above the minimum taxable limit of Rs. 12,000 for the purposes of the charging Section 3.

4. The point in our opinion is concluded by the decision of a Full Bench of this Court in Commissioner of Sales Tax, U.P. v. Allied Chemicals, Kanpur [1969] 23 S.T.C. 165. There the question was :

Whether ex-U.P. sales are to be excluded from computing the prescribed minimum of the gross turnover or not under the circumstances of the case

5. In that case, it was held that the gross turnover means 'aggregate turnover of such sales as are taxable or would be taxable but for some exemption provided in the Act.

6. The same principle would apply to the facts of the present case. An inter-State sale is entitled to exemption from tax not under the U. P. Sales Tax Act but by virtue of the provisions contained in Article 286 of the Constitution. The inter-State sales are now taxable under the Central Sales Tax Act of 1956. Such sales, therefore, are completely outside the purview of the U. P. Sales Tax Act. Under the circumstances, such sales cannot be included in the gross turnover under the U.P. Sales Tax Act and the view taken by the Judge (Revisions), in our opinion, is right.

7. As no one has appeared on behalf of the assessee, there is no order as to costs. The counsel's fee is assessed at Rs. 100.


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