Turnover tax exclusion applies to entire sales-taxed turnover, not just net taxable turnover, under the Kerala sales tax scheme.

Under the Kerala General Sales Tax Act, sales tax collected along with the sale price formed part of turnover for turnover tax purposes, because turnover means the aggregate consideration for which goods are bought or sold. However, the proviso to section 5(2A) excluded the entire turnover already liable to sales tax under section 5(1) or section 5(2), not merely the net taxable portion after deductions. Sales tax collected on such turnover was therefore excludible from turnover tax, and turnover already subjected to sales tax could not be taxed again under section 5(2A).

---

---

Issues: (i) Whether sales tax collected by the dealer formed part of the turnover liable to turnover tax under section 5(2A) of the Kerala General Sales Tax Act, 1963. (ii) Whether the turnover already subjected to tax under section 5(1) or section 5(2) was excluded from the levy of turnover tax under the proviso to section 5(2A). (iii) Whether sales tax collected by the assessee was liable to be excluded under the proviso to section 5(2A).

Issue (i): Whether sales tax collected by the dealer formed part of the turnover liable to turnover tax under section 5(2A) of the Kerala General Sales Tax Act, 1963.

Analysis: The Court construed the definition of "turnover" in section 2(xxvii) as the aggregate amount for which goods are bought or sold. It held that, in the scheme of the Act, the amount collected as sales tax along with the sale price formed part of the aggregate consideration. The exclusion of sales tax from taxable turnover under rule 9(1) operated for sales tax computation, but not for turnover tax under section 5(2A), where the concept of taxable turnover did not apply.

Conclusion: Sales tax collected by the dealer was part of turnover for the purpose of section 5(2A), subject to the effect of the proviso.

Issue (ii): Whether the turnover already subjected to tax under section 5(1) or section 5(2) was excluded from the levy of turnover tax under the proviso to section 5(2A).

Analysis: The proviso was read as excluding the entire turnover on which sales tax was leviable under section 5(1) or section 5(2), and not merely the net taxable portion after deductions. The Court held that the legislative scheme was to impose turnover tax only on transactions not already subjected to sales tax, such as second or third sales in the relevant schedules.

Conclusion: The turnover leviable to sales tax under section 5(1) or section 5(2) stood excluded from turnover tax under section 5(2A).

Issue (iii): Whether sales tax collected by the assessee was liable to be excluded under the proviso to section 5(2A).

Analysis: Applying the proviso, the Court held that sales tax collected on sales and purchases of goods already subjected to sales tax under sections 5(1) and 5(2) could not again be brought within turnover tax. The absence of an express exclusion of sales tax in section 5(2A) did not alter the effect of the proviso, because the taxed turnover itself was outside the levy.

Conclusion: Sales tax collected by the assessee was excludible under the proviso to section 5(2A).

Final Conclusion: The revision cases failed, the assessee succeeded on the substantive tax issue, and the court declined leave to appeal.

Ratio Decidendi: Where a turnover tax provision excludes turnover already subjected to sales tax, the exclusion applies to the entire turnover liable to sales tax and not merely to the net taxable turnover after deductions; sales tax collected on such turnover is not again chargeable to turnover tax.

---