Deduction of purchase turnover for inter-State sales under Section 27 upheld, with double-benefit objection rejected.

Purchase turnover of declared goods liable to tax at the stage of last purchase under the State Act was deductible from taxable turnover under Section 27 to the extent the goods were sold in the course of inter-State trade or commerce. The statutory scheme treated inter-State sales as outside the State's taxing power, and Section 27 expressly excluded such purchase turnover for goods in Schedule D when resold during the year. The court rejected the argument that this produced a double benefit, holding that the taxable turnover remained the intra-State purchase turnover and the inter-State sale itself could not be taxed by the State.

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Issues: Whether the purchase turnover of declared goods liable to tax at the stage of last purchase under the State Act could be excluded from taxable turnover under Section 27 to the extent the goods were sold in the course of inter-State trade or commerce.

Analysis: The statutory scheme treated sale or purchase in the course of inter-State trade and export as outside the purview of the State's taxable turnover, while Section 27 specifically provided for exclusion of purchase turnover of goods specified in Schedule D liable to tax at the stage of last purchase when such goods were sold during the year in the course of inter-State trade or commerce. The Court held that the plain language of Section 27 could not be denied on the theory of double benefit, since the relevant taxable turnover remained the purchase turnover within the State and the inter-State sale itself was outside the State's taxing power.

Conclusion: The purchase turnover was deductible from taxable turnover under Section 27 to the extent of inter-State sale, and the contrary view was rejected.

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