Separate tax shown outside a government-fixed price need not enter taxable turnover; excise duty alone does not secure sales tax exemption.

Medicinal preparations containing alcohol are not exempt from Tamil Nadu sales tax merely because excise duty was paid under the Medicinal and Toilet Preparations (Excise Duties) Act, 1955; exemption under section 8 read with item 3 of the Third Schedule depends on the statutory sales tax scheme itself. Separately, where tractors were sold at a Government of India fixed price and sales tax was shown distinctly from that controlled price, the tax component was not treated as part of the taxable turnover. The note therefore distinguishes between exemption eligibility and the treatment of separately charged tax in a price-control regime.

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Issues: (i) Whether the turnover of Rs. 45,325.77 from medicinal preparations containing alcohol was exempt under section 8 read with item 3 of the Third Schedule to the Tamil Nadu General Sales Tax Act, 1959. (ii) Whether sales tax paid in Maharashtra on purchase of tractors was includible in the assessee's taxable turnover in Tamil Nadu.

Issue (i): Whether the turnover of Rs. 45,325.77 from medicinal preparations containing alcohol was exempt under section 8 read with item 3 of the Third Schedule to the Tamil Nadu General Sales Tax Act, 1959.

Analysis: The exemption claimed depended on the statutory scheme governing medicinal preparations containing alcohol. The goods were shown to have suffered excise duty under the Medicinal and Toilet Preparations (Excise Duties) Act, 1955 in Maharashtra, but the applicable sales tax exemption under section 8 and item 3 of the Third Schedule was not attracted on that footing.

Conclusion: The turnover was not entitled to exemption and was liable to be included in taxable turnover. The issue is against the assessee.

Issue (ii): Whether sales tax paid in Maharashtra on purchase of tractors was includible in the assessee's taxable turnover in Tamil Nadu.

Analysis: The tractors were sold at the price fixed by the Government of India under the price control regime governing tractors. The assessee separately charged the sale price and the sales tax paid to Maharashtra. On those facts, the separately shown sales tax did not form part of the sale price or the taxable turnover, because the dealer was restrained from selling above the fixed price and had not intended the tax component to be absorbed into that price.

Conclusion: The Maharashtra sales tax on tractors was not includible in the taxable turnover. The issue is in favour of the assessee.

Final Conclusion: The revision succeeded only on the medicinal-preparations turnover and failed on the tractor-tax turnover, leaving the Tribunal's order modified to that limited extent.

Ratio Decidendi: For sales tax purposes, a separately charged tax component does not form part of taxable turnover where the sale price is fixed by a price control regime and the tax is shown distinctly from the controlled sale price; conversely, payment of excise duty under the Medicinal and Toilet Preparations (Excise Duties) Act, 1955 does not by itself establish exemption under section 8 read with the Third Schedule to the Tamil Nadu General Sales Tax Act, 1959.

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