Deeming exclusion under one sales tax provision does not bar inclusion in total turnover for independent turnover tax levy.

A deeming exclusion in the proviso to section 5(3)(a) of the Karnataka Sales Tax Act operated only for that provision and did not remove branded-goods turnover from the dealer's total turnover under section 6-B. Section 6-B was treated as an independent charging provision levying turnover tax on total turnover, subject only to deductions expressly allowed by that section. The distinction between non-liability under one provision and complete exclusion from the Act meant the turnover remained includible in the tax base, though deductions could still be claimed at the computation stage. The branded-goods turnover was therefore liable to turnover tax.

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Issues: Whether the turnover arising from sale of branded goods, which is treated as not a sale under the proviso to section 5(3)(a) of the Karnataka Sales Tax Act, 1957, is includible in the dealer's total turnover for levy of turnover tax under section 6-B of the Act.

Analysis: The proviso to section 5(3)(a) creates a deeming fiction confined to that provision and only excludes the transaction from being treated as a sale for the purpose of section 5(3)(a). Section 6-B is an independent charging provision which levies turnover tax on a dealer's total turnover and allows only the deductions expressly provided in the section. A transaction exempted from sales tax under section 5(3)(a) is not thereby taken out of the Act altogether. The distinction between non-liability to tax and exemption from tax means that the turnover remains part of the gross total turnover, though the assessee may claim the deduction contemplated by the Act at the stage of computation.

Conclusion: The branded goods turnover was correctly included in the total turnover for the purpose of section 6-B, and the assessee was liable to turnover tax. The contention that the proviso to section 5(3)(a) excluded the turnover from section 6-B was rejected.

Ratio Decidendi: A deeming exclusion confined to one charging provision does not exclude the same transaction from an independent turnover-tax provision, unless the latter statute expressly provides such exclusion.

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