Turnover tax classification upheld as exempt inter-State and export turnover may be used for rate fixing without taxing immune transactions.

Section 6-B of the Karnataka Sales Tax Act was upheld because turnover tax was levied only on intra-State sales, while exempt inter-State, export and import turnover was used only to identify dealers and determine the applicable slab or rate. That inclusion did not, by itself, violate article 286, as no tax was imposed on constitutionally immune transactions. The Court also held that the constitutional challenge could not be reopened in a later writ petition because the petitioner had already raised the grievance in substance and was barred by constructive res judicata. The writ petitions therefore failed.

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Issues: (i) Whether section 6-B of the Karnataka Sales Tax Act, 1957, which takes exempt inter-State and export turnover into account for determining turnover tax liability, is unconstitutional under article 286 of the Constitution of India. (ii) Whether the petitioner was barred by res judicata or constructive res judicata from re-agitating the constitutional challenge in the present writ petition.

Issue (i): Whether section 6-B of the Karnataka Sales Tax Act, 1957, which takes exempt inter-State and export turnover into account for determining turnover tax liability, is unconstitutional under article 286 of the Constitution of India.

Analysis: The levy under section 6-B was examined in the light of the earlier binding decisions upholding the provision. The turnover tax is imposed only on intra-State sales, while the inclusion of inter-State, export, and import turnover is treated as a method of identifying dealers and fixing the applicable slab or rate. The reasoning accepted that such inclusion, when not resulting in actual tax on constitutionally immune transactions, does not by itself render the provision unconstitutional. The challenge based on article 286 and the rule in A.V. Fernandez was found insufficient to displace the earlier view sustaining the validity of the provision.

Conclusion: The constitutional challenge to section 6-B failed and was rejected.

Issue (ii): Whether the petitioner was barred by res judicata or constructive res judicata from re-agitating the constitutional challenge in the present writ petition.

Analysis: The petitioner had earlier approached the Court in proceedings arising out of the same tax dispute and had raised the constitutional grievance in substance, though not as a direct prayer for invalidation of the provision. Since all available pleas ought to have been raised in the earlier proceedings, the later attempt to reopen the same question was treated as barred. The Court applied the principle that parties cannot be permitted to fragment their challenge and litigate the same cause repeatedly by varying grounds in successive proceedings.

Conclusion: The constitutional challenge was barred by constructive res judicata and could not be reopened.

Final Conclusion: The writ petitions did not succeed, and the assessment-related constitutional challenge to the turnover tax provision remained undisturbed.

Ratio Decidendi: A challenge to the constitutional validity of a fiscal provision cannot be re-agitated in successive writ proceedings when the issue could and should have been raised earlier, and an inclusion of constitutionally immune turnover for rate-classification purposes does not invalidate the levy if no tax is imposed on the immune transactions themselves.

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