Inter-State sales turnover deduction applies under Haryana sales tax law despite no export treatment

Turnover of goods sold in the course of inter-State trade was deductible from taxable turnover under section 27(1)(b) of the Haryana General Sales Tax Act, 1973, where the statutory conditions were satisfied. The scheme of sections 6 and 27 required exclusion of purchase turnover once the sale fell within section 3 of the Central Sales Tax Act, 1956. The fact that the goods were not treated as exported goods did not justify denial of the statutory deduction. The impugned orders were therefore unsustainable.

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Issues: Whether turnover of goods sold in the course of inter-State trade was liable to be excluded from taxable turnover under section 27(1)(b) of the Haryana General Sales Tax Act, 1973, even though the goods were not treated as sold in the course of export.

Analysis: The relevant scheme of sections 6 and 27 of the Haryana General Sales Tax Act, 1973 required exclusion from taxable turnover of purchase turnover where the statutory conditions were met, including sale in the course of inter-State trade or commerce within the meaning of section 3 of the Central Sales Tax Act, 1956. The earlier decision relied on by the petitioner had already interpreted section 27 on its plain language and held that the turnover had to be excluded once the statutory requirement of inter-State sale was satisfied. The Revenue was unable to show any distinguishing feature or legal basis to deny the statutory deduction merely because the goods were not treated as exported goods.

Conclusion: The turnover was deductible under section 27(1)(b), and the impugned orders could not be sustained.

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