Sales and first-purchase turnovers cannot be combined to determine sales tax liability under the U.P. Sales Tax Act.

Turnover under section 3 and first-purchase turnover under section 3-D of the U.P. Sales Tax Act could not be aggregated to determine tax liability. Sales tax under section 3 applied to the turnover of sales or purchases, whichever was greater, while purchase tax under section 3-D applied only to first purchases; sales turnover was irrelevant for that purpose. Because each turnover remained below the minimum taxable limit on its own, no liability arose by combining the figures. The issue was answered in the negative, in favour of the assessee and against the department.

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Issues: Whether the turnover of sales under section 3 and the turnover of first purchases under section 3-D of the U.P. Sales Tax Act could be aggregated for determining tax liability.

Analysis: Sales tax under section 3 was chargeable on the turnover of sales or purchases, whichever was greater, and the two could not be combined. Purchase tax under section 3-D was chargeable only on first purchases, and turnover of sales could not be taken into account for that purpose. As the turnover of sales for the first half year and the turnover of first purchases for the second half year each remained below the minimum taxable limit, neither liability arose by aggregation of the two figures.

Conclusion: The turnover of sales and the turnover of first purchases could not be amalgamated to determine liability. The question was answered in the negative in favour of the assessee and against the department.

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