Turnover under sales tax law excludes consignment sales for surcharge and post-purchase commission from purchase turnover.

Consignment sales were outside the statutory definition of total turnover under the Kerala sales tax scheme and could not be counted for surcharge under the Kerala Surcharge on Taxes Act, because surcharge is computed only on turnover recognised by the governing sales tax provisions. Commission received from non-resident principals after completion of the purchase transaction was not part of purchase turnover, as the purchase was complete when the goods were bought and sent onward and the price had already been paid. The Tribunal's view on both turnover issues was held legally sustainable, and no interference with the appellate order was warranted.

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Issues: (i) Whether consignment sales formed part of the assessee's total turnover for the purpose of levying surcharge under the Kerala Surcharge on Taxes Act, 1957; (ii) Whether commission received from non-resident principals formed part of the assessee's purchase turnover for assessment purposes.

Issue (i): Whether consignment sales formed part of the assessee's total turnover for the purpose of levying surcharge under the Kerala Surcharge on Taxes Act, 1957.

Analysis: The statutory scheme under section 5 of the Kerala General Sales Tax Act, 1963, read with the definitions of "total turnover" and "turnover" in section 2(xxvi) and section 2(xxvii), shows that surcharge is linked to the dealer's turnover as defined by the Act. Consignment sales are neither sales within the State nor sales in the course of inter-State trade or commerce. They are outside the State sale transactions and do not fall within the statutory definition of total turnover. Since surcharge under section 3 of the Kerala Surcharge on Taxes Act, 1957, depends on the turnover taken under the sales tax law, such consignment sales cannot be included for fixing the surcharge slab.

Conclusion: Consignment sales do not form part of total turnover for surcharge purposes and the finding was in favour of the assessee.

Issue (ii): Whether commission received from non-resident principals formed part of the assessee's purchase turnover for assessment purposes.

Analysis: The goods were taxable at the last purchase point and the assessee's purchase was complete when the goods were purchased and sent to the non-resident principals. The purchase price had already been paid. Any commission received after completion of the purchase transaction was an amount received subsequent to the purchase and could not be treated as part of the purchase turnover.

Conclusion: The commission received from the non-resident principals did not form part of the assessee's purchase turnover and the finding was in favour of the assessee.

Final Conclusion: The revenue revisions failed because the Tribunal's view on both turnover issues was legally sustainable, and no interference with the appellate order was warranted.

Ratio Decidendi: For levy of surcharge under the Kerala sales tax regime, only turnover falling within the statutory definition of total turnover can be counted, and amounts received after completion of a purchase transaction cannot be added to purchase turnover unless the statute expressly so provides.

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