Contextual meaning of turnover in exemption certificates limits fee computation to exempted activity turnover only.

In a taxing notification governing exemption certificates for hotels and restaurants, the word "turnover" was construed contextually to mean only the part of a dealer's gross turnover relevant to the exempted activity and within the taxable field. Amounts relating to goods on which no tax was payable under the Act could not be included either for deciding whether an exemption certificate was required or for computing the fee. The effect of the interpretation was that the certificate fee had to be calculated only by reference to turnover connected with the exempted activity, not the dealer's entire gross turnover.

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Issues: Whether, for computing the fee for the exemption certificate under the notification issued under section 4(2) of the Rajasthan Sales Tax Act, 1954, the expression "turnover" meant the dealer's gross turnover or only the taxable turnover relevant to the exemption.

Analysis: The notification exempted hotels and restaurants from tax subject to obtaining a valid exemption certificate on payment of a fee calculated on the basis of "turnover". The Court read the expression in its context and held that it could not mean the dealer's entire gross turnover irrespective of the goods actually liable to tax. Goods on which no tax was payable under section 4(1) of the Act could not be included for the purpose of deciding whether an exemption certificate was required or for computing the fee. The relevant turnover was only that part of the dealer's gross turnover in respect of which exemption under the notification was necessary and which remained within the taxable field under section 3 of the Act.

Conclusion: The expression "turnover" in the notification referred to that part of the gross turnover of the dealer in respect of which an exemption certificate was required, and not to the entire gross turnover or merely to taxable turnover in the abstract.

Final Conclusion: The reference was answered in favour of the assessee, and the fee under the notification had to be computed only with reference to the turnover relevant to the exempted activity.

Ratio Decidendi: An exemption-related turnover clause in a taxing notification must be construed contextually to mean only the turnover connected with the activity for which exemption is sought and certificate is required, excluding amounts outside the taxable field.

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