Annual gross turnover cannot include non-taxable transfers or export sales when computing exemption fee under sales tax law.

For computing exemption fee under the Rajasthan Sales Tax Act, 1994, the expression "annual gross turnover" could not be expanded to include branch transfers, consignment transfers, inter-State sales or export sales. Read with the definitions of "turnover" and "taxable turnover" and the Act's scheme, the exemption power was held to be co-extensive with the taxing power and could not be used to bring non-taxable transactions into the fee base through a notification. The court also noted the constitutional limits on State taxing power. The assessing authority's inclusion of those transactions was therefore unjustified, and the revision was dismissed in favour of the assessee.

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Issues: Whether, for the purpose of computing exemption fee under the Rajasthan Sales Tax Act, 1994, the expression "annual gross turnover" could include branch transfers, consignment transfers, inter-State sales and export sales.

Analysis: The expression "annual gross turnover" was read in the context of the statutory definitions of "turnover" and "taxable turnover" and the scheme of the Act. The power to exempt was held to be co-extensive with the power to tax and could not be used to include transactions which were outside the taxable field under the Act. The constitutional limits on the State's taxing power were also noticed, and it was held that non-taxable components could not be brought into the base for computing exemption fee merely by reference to the notification.

Conclusion: The assessing authority was not justified in including branch transfers, consignment transfers, inter-State sales or export sales in annual gross turnover for computing exemption fee. The revision was therefore dismissed in favour of the assessee.

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