Compounded sales tax can bar a separate purchase tax levy on the same turnover absent clear statutory authorisation

The Tamil Nadu General Sales Tax Act treats section 7 compounding as covering liability on total turnover, while section 7-A operates as an independent purchase tax charging provision. Read with section 7-A(2), a dealer liable under section 7-A may still opt for compounding under section 7, and payment under section 7(1) is treated as covering liability under section 3(1) and, where applicable, section 7-A(1). On that construction, a further levy under section 7-A on the same compounded turnover is not permissible without clear statutory authorisation, because it would amount to double taxation.

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Issues: Whether, after tax has been compounded under section 7 of the Tamil Nadu General Sales Tax Act, 1959, a separate levy of purchase tax under section 7-A on the same turnover amounts to double taxation.

Analysis: The scheme of the Act treats total turnover as the aggregate turnover in all goods of a dealer, while taxable turnover is the part of that turnover on which tax is levied after prescribed deductions. Section 7 is an optional provision for payment at compounded rates, and section 7-A is an independent charging provision for purchase tax. Reading section 7-A(2) with section 7 shows that a dealer liable under section 7-A may also opt for compounding under section 7. The earlier Full Bench observations on total turnover did not authorize two separate levies on the same compounded turnover. Once tax is paid under section 7(1), it is taken to cover the liability under section 3(1) and, where applicable, section 7-A(1) as well.

Conclusion: Separate assessment under section 7-A after compounding under section 7 is not permissible on the same turnover and would amount to double taxation.

Ratio Decidendi: Where the statute permits compounding of tax on total turnover, the compounded payment covers the dealer's liability under the charging provisions attracted to that turnover, and a further levy on the same turnover under another charging provision is not permissible unless the Act clearly authorises it.

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