Turnover tax under single-point levy cannot be imposed on a first seller whose turnover has already suffered tax.

Under the Kerala General Sales Tax Act, cardamom was taxable only at the first sale point, and turnover tax could not be demanded again where the dealer's taxable turnover had already suffered sales tax through the auction centres. Section 5(2A) applied only to second sellers whose sales were exempt under the single-point levy scheme. Because the dealer was the first seller and the same turnover had already been brought to tax, no turnover tax liability arose on that turnover, and the demand was unsustainable in law.

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Issues: Whether turnover tax could be demanded from a dealer who was the first seller of cardamom when the sales tax had already been collected and remitted through the auction centres, in the light of section 5(2A) of the Kerala General Sales Tax Act, 1963.

Analysis: Cardamom was taxable only at the point of first sale under entry 30 of the First Schedule to the Kerala General Sales Tax Act, 1963. The materials showed that the petitioner's taxable turnover had already suffered tax through the auction centres, and the demand was made only on a provisional basis by treating the turnover as liable to turnover tax. Section 5(2A) attracted turnover tax only in the case of second sellers whose sales were exempt under the single-point scheme of levy. Since the petitioner was not a second seller, and the turnover had already been brought to tax, no turnover tax liability could arise on the same turnover.

Conclusion: The demand for turnover tax was unsustainable in law and was set aside. The issue is decided in favour of the assessee.

Final Conclusion: The writ petition succeeded and the impugned demand proceedings were quashed.

Ratio Decidendi: Under a single-point sales tax scheme, turnover tax cannot be levied on a first seller whose taxable turnover has already suffered tax; it applies only to second sellers whose sales are exempt from tax.

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