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of <h1>Interpretation of KGST Act Section 7(3) favors Department over dealer, clarifies turnover tax determination.</h1> The Full Bench's interpretation of Section 7(3) of the KGST Act favored the Department over the dealer, leading to the dismissal of the Sales Tax ... Levy of turnover tax - Section 7(3) of the KGST Act - assessment year 2010-11 - HELD THAT:- By following the principle laid down by the Full Bench in M/S. HOTEL AIDA VERSUS REPRESENTED BY ITS MANAGING PARTNER, MOHAN JACOB VERSUS STATE OF KERALA REPRESENTED BY ITS SECRETARY, TAXES DEPT. THIRUVANANTHAPURAM [2022 (4) TMI 1437 - KERALA HIGH COURT], where it was held that By applying the rule of Noscitur-a-sociis, we hold that for the purpose of Section 7(b) the turnover tax payable by the dealer as conceded either in the return or accounts or the turnover tax paid for the previous consecutive three years is the deciding factor. So interpreted, we hold that the construction adopted by the Tribunal which reads as follows is the correct and literal construction available in the circumstances of the case., the questions of law are answered against the dealer, in favour of the Department. Revision dismissed. Issues: Interpretation of Section 7(3) of the KGST ActAnalysis:The judgment involves a challenge by a dealer registered under the KGST Act against an order of the Tribunal dated 23.09.2013 concerning the assessment year 2010-11. The issue at hand pertains to the interpretation of Section 7(3) of the KGST Act. The Full Bench's order dated 06.4.2022 delves into the question of determining the highest turnover tax payable by the dealer, focusing on the factors influencing this determination. The Bench emphasizes the significance of the term 'highest' in comparing different situations and clarifies that the turnover tax payable as conceded in the return or accounts, or the turnover tax paid for the previous consecutive three years, serves as the deciding factor. The judgment highlights the importance of interpreting the statutory provisions in alignment with the legislative intent and the principles of statutory construction.Significance of Noscitur-a-sociis Principle:The judgment underscores the application of the Noscitur-a-sociis principle in interpreting Section 7(b) of the KGST Act. By associating the term 'payable' with the return or accounts and 'paid' with the turnover tax, the Court elucidates that the turnover tax payable by the dealer as conceded in the return or accounts, or the turnover tax paid for the previous consecutive three years, plays a pivotal role in determining the highest turnover tax. This application of the Noscitur-a-sociis principle aids in understanding the legislative intent behind the provision and ensures a coherent interpretation consistent with the statutory framework.Resolution and Outcome:Based on the interpretation provided by the Full Bench, the judgment resolves the questions of law against the dealer and in favor of the Department. Consequently, the Sales Tax Revision stands dismissed. The judgment serves as a significant elucidation of the interpretation of Section 7(3) of the KGST Act, providing clarity on the factors influencing the determination of the highest turnover tax payable by a dealer. The decision underscores the importance of adhering to the statutory language and principles of interpretation in resolving legal disputes related to tax assessments under the KGST Act.
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