Export sale turnover may count for authorisation where state situs rules treat the sale as within the State.

For authorisation under section 24 of the Bombay Sales Tax Act, 1959, turnover of sales was construed to include exported goods where the situs of the sale, determined by the Explanation to section 2(28) read with section 4(2) of the Central Sales Tax Act, 1956, lay within the State. The article notes that the expression "turnover of sales" is linked to sales within the State, and that incorporation by reference brings the Central Act's situs rules into the State Act for this limited purpose. Section 75 was treated as excluding only tax liability on export, inter-State, or outside-State sales, not their inclusion in turnover for registration or authorisation purposes.

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Issues: Whether, for the purpose of authorisation under section 24 of the Bombay Sales Tax Act, 1959, the turnover of sales of goods exported by a registered dealer includes a sale which is treated as a sale within the State by the Explanation to section 2(28) read with section 4(2) of the Central Sales Tax Act, 1956.

Analysis: Section 24 required the registered dealer's turnover of sales of exported goods to exceed the prescribed limit. The expression "turnover of sales" in section 2(36) is tied to sales made within the State, and the Explanation to section 2(28) extends that concept by incorporating the principles of section 4(2) of the Central Sales Tax Act, 1956 for determining situs. On that footing, the sale of the exported goods in question, whether treated as specific or unascertained goods, had its situs at Bhavnagar and was therefore a sale within the State for the purposes of the Act. Section 75, which reflects the constitutional prohibition against taxing outside-State, inter-State, import, or export sales, was held to operate only to exclude such transactions from tax liability, not to prevent their inclusion for the separate purpose of registration or authorisation. The doctrine of incorporation by reference meant that section 4(2) was to be read into the State Act for this limited purpose, and the export nature of the transaction did not require departure from the statutory definition.

Conclusion: The turnover of sales included the sale of the exported goods, and the condition for authorisation was satisfied in favour of the assessee.

Final Conclusion: The reference was answered in the affirmative, recognising the assessee's entitlement to have the disputed export sale counted towards the statutory turnover threshold for authorisation.

Ratio Decidendi: Where a State sales tax statute expressly incorporates the situs principles of the Central Sales Tax Act for determining "sale within the State", that incorporated fiction governs the computation of turnover for non-tax purposes such as authorisation, notwithstanding the constitutional bar on taxing export or inter-State sales.

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