Turnover tax exemption principle applied to sales exempt under rule 3(66a), requiring fresh assessment and appellate reconsideration.

Sales exempt under rule 3(66a) of the Bengal Sales Tax Rules, 1941 were held not liable to turnover tax under section 6B(2)(a) of the Bengal Finance Sales Tax Act, 1941. Applying Sama Steel Industries, the tribunal treated the contrary basis adopted in the assessment as unsustainable, so the assessment and appellate orders could not stand. Fresh assessment was directed on the correct legal basis, and the pending appeal was to be disposed of in the same light.

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Issues: Whether turnover tax was payable on sales exempted under rule 3(66a) of the Bengal Sales Tax Rules, 1941 and taxable under section 6B(2)(a) of the Bengal Finance Sales Tax Act, 1941, and whether the assessment and appellate orders based on the contrary view were liable to be set aside with consequential directions for fresh assessment and disposal of the pending appeal.

Analysis: The decision in Sama Steel Industries was applied to hold that sales exempt under rule 3(66a) do not attract turnover tax under section 6B(2)(a). Since the assessment for the relevant period had proceeded on the contrary footing, the assessment order and the appellate order could not stand. The matter for the later period was also required to be decided by the appellate authority in the light of the same binding principle. Directions were issued for fresh assessment and for disposal of the pending appeal accordingly.

Conclusion: Turnover tax was not payable on sales exempt under rule 3(66a) of the Bengal Sales Tax Rules, 1941. The impugned assessment and appellate orders were set aside, and fresh proceedings were directed to be completed by applying the same legal principle.

Ratio Decidendi: Sales exempt under rule 3(66a) of the Bengal Sales Tax Rules, 1941 are not liable to turnover tax under section 6B(2)(a) of the Bengal Finance Sales Tax Act, 1941.

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