Exempted goods excluded from taxable turnover for composition fee calculation, making the additional demand unsustainable.

Exempted goods must be excluded from taxable turnover where the statute so provides under the Rajasthan Sales Tax Act, 1994. Sales of cigarettes and tobacco products notified as exempted goods could not be added to turnover for computing composition fee or exemption fee in lieu of turnover tax, so any demand based on the higher turnover was unsustainable. On the reduced turnover, the fee already deposited was sufficient, and the additional levy and related interest claim could not stand.

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Issues: Whether sale of exempted goods could be included in taxable turnover for levy of composition fee or exemption fee in lieu of turnover tax under the Rajasthan Sales Tax Act, 1994.

Analysis: Section 13A(2)(i) excludes the sale and purchase of exempted goods from taxable turnover. Cigarettes and tobacco products had been notified as exempted goods by the State Government under the relevant notification. The turnover attributable to such exempted goods could not, therefore, be added while determining the assessee's taxable turnover for fixing the composition fee or exemption fee. On the reduced turnover, the fee already deposited was sufficient and the additional demand raised on the footing of a higher turnover was unsustainable.

Conclusion: The inclusion of turnover from exempted goods was illegal, and the assessee was not liable for the composition fee or interest demand.

Final Conclusion: The revision petition failed because the lower authorities correctly excluded exempted goods from taxable turnover and correctly limited the fee payable.

Ratio Decidendi: Exempted goods are to be excluded from taxable turnover for the purpose of computing composition or exemption fee where the statute so provides.

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