2011 (3) TMI 1545 - HC - VAT and Sales Tax

Interpretation of Sales Tax Act on Turnover Exclusion

The court analyzed the interpretation of provisions of the Haryana General Sales Tax Act, 1973 concerning the treatment of turnover of sale of declared ... Inclusion of turnover of sale of declared goods in taxable turnover contrary to the statutory scheme under section 27(1)(b) of the Act Held that:- The answer has to be in favour of the assessee on plain interpretation of section 27. There is no reason to ignore the plain language of the statute. The purchase turnover has to be excluded from the taxable turnover if qualifications laid down in the section are fulfilled one of which is inter-State sale. There is no question of double benefit as sought to be projected on behalf of the Revenue. Appeal allowed. Issues:1. Interpretation of provisions of the Haryana General Sales Tax Act, 1973 regarding the treatment of turnover of sale of declared goods in taxable turnover.2. Determination of whether turnover of sale in the course of inter-State sale should be deducted from the taxable turnover.Analysis:1. Interpretation of Provisions of the Haryana General Sales Tax Act, 1973:The judgment dealt with the issue of quashing orders passed under the Haryana General Sales Tax Act, 1973, concerning the inclusion of turnover of sale of declared goods in taxable turnover. The petitioner, a registered dealer, purchased cotton in the State and sold it to a dealer in Bombay for export. The Tribunal rejected the petitioner's plea, stating that the goods did not qualify as being in the course of export. The court analyzed the statutory scheme under section 27(1)(b) of the Act and emphasized that the transactions were not covered by relevant provisions of the Central Sales Tax Act. The court dismissed the appeal, stating that the transactions could not be treated as inter-State sales calling for deduction under section 27(1)(b)(A)(ii) of the Haryana General Sales Tax Act, 1973.2. Deduction of Turnover in the Course of Inter-State Sale:The petitioner argued that even if the goods were not sold in the course of export, turnover of sale in the course of inter-State sale should be deducted from the taxable turnover. Reference was made to a previous court order that decided a similar issue in favor of the assessee by analyzing sections 6 and 27 of the Act. The court held that the purchase turnover must be excluded from the taxable turnover if the qualifications laid down in the section, including inter-State sale, are fulfilled. It was emphasized that there was no question of double benefit, and the turnover of inter-State sale should be excluded to the extent of sale in the course of inter-State trade. The court concluded that the turnover in question was covered by taxable turnover under section 6 and should be excluded under section 27, quashing the impugned orders.In conclusion, the judgment provided a detailed analysis of the interpretation of provisions of the Haryana General Sales Tax Act, 1973 regarding the treatment of turnover of sale of declared goods in taxable turnover. It also addressed the deduction of turnover of sale in the course of inter-State sale from the taxable turnover, emphasizing the importance of fulfilling the qualifications laid down in the relevant sections. The court allowed the petitions and quashed the impugned orders, providing clarity on the application of the statutory provisions in the given context.