Sales turnover, not purchase value, governs liability under Tamil Nadu VAT section 3(4) when threshold turnover is not met.

Under section 3(4) of the Tamil Nadu Value Added Tax Act, liability must be assessed by reference to sales turnover of taxable goods, not purchase value. Where the dealer's sales turnover is below the statutory threshold, the assessing authority cannot invoke purchase value to fasten tax liability under that provision. On the admitted facts, the dealer's turnover remained below the limit, so the assessment lacked jurisdiction and was set aside.

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Issues: Whether, for the purpose of liability under section 3(4) of the Tamil Nadu Value Added Tax Act, 2006, the respondent could assess tax on the basis of purchase value when the petitioner's sales turnover was below the statutory threshold.

Analysis: Section 3(4) governs the option to pay tax and the consequent liability by reference to the dealer's turnover relating to taxable goods. The statutory scheme fixes the relevant yardstick as sales turnover, and not purchase value. On the admitted facts, the petitioner's sales were below Rs. 50,00,000/-, so the respondent could not proceed on purchase value to fasten liability under the provision.

Conclusion: The impugned assessment was without jurisdiction and was liable to be set aside. The issue is answered in favour of the petitioner.

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