Taxable turnover formula under sales tax law extended to export-related turnover; reassessment and circulars were upheld.

Section 3(4) of the Tamil Nadu General Sales Tax Act was treated as wide enough to cover export-related turnover where goods purchased at concessional rate were not otherwise sold but despatched outside the State. The Commissioner's 1999 and 2000 circulars were understood as explanatory formulae for computing taxable turnover, not as prospectively confined amendments. On that basis, the reassessed turnover could validly include export sales, the revised notice and assessment were upheld, and the challenge to quashing the order failed. The Tribunal also rejected reliance on Articles 14 and 141 and noted that an alternative statutory appeal did not warrant interference on the facts.

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Issues: Whether the circular prescribing the formula for working out taxable turnover under section 3(4) of the Tamil Nadu General Sales Tax Act, 1959 was only prospective and therefore inapplicable to the assessment year 1998-99, and whether the assessment order based on that formula was liable to be quashed.

Analysis: Section 3(4) levies purchase tax where goods purchased at concessional rate are not sold but are despatched outside the State otherwise than by inter-State sale, and the statutory language was treated as wide enough to include export sales. The circulars issued by the Commissioner in 1999 and 2000 were not accepted as mere prospective instructions; they were treated as explanatory formulae for working out turnover and not as amendments restricted to future years only. The Tribunal held that the assessment authority had corrected an earlier formula after noticing that export sales also formed part of the relevant turnover and that there was no illegality in issuing a revised notice and completing the assessment accordingly. The contention based on Articles 14 and 141 of the Constitution of India was rejected, and the availability of an alternative statutory appeal was held not to justify interference in the facts of the case.

Conclusion: The challenge to the assessment failed. The circular was not confined to future assessments, the levy under section 3(4) was upheld as applicable to export-related turnover, and the impugned order was not liable to be quashed.

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