TaxTMI 
TaxTMI 
2019 (3) TMI 1483
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....ate/revisional authority and the contention advanced by the learned counsel for the appellant was that levy of tax under Section 6B of the Act, on the total turnover is a misconstruction of the provision and it has to be on the "taxable turnover" which may be in conformity with Article 286 of the Constitution of India but that was neither accepted by the assessing authority nor at the appellate/revisional stage against which the present appeals have been preferred impugning the assessments made for the years 1990-91 to 1999-2000 in the instant appeals. 3. The main thrust of the submission of Mr. Mohit Chaudhary, learned counsel for the appellant is that Courts below have manifestly erred in appreciating that the 'total turnover' as defined under Section 6B( 1) for the purpose of levy turnover tax can in no event include the 'turnover' with reference to which the State has no power to levy tax under the constitutional scheme and the submission proceeds that the levy of tax under Section 6B can be on the 'taxable turnover' alone. Though the first limb of the Section has adopted the word 'total turnover' but it is only for the limited purpose of identifying the dealers and further su....
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....rther submits that in the instant case, the appellant filed returns for the assessment years in question claiming certain deductions. When such returns were assessed by the assessing authorities, it was noticed that as far as the determination of the rate at which 'turnover tax' was to be levied, the dealer has made incorrect deductions and in turn has furnished returns at a lower rate. Upon assessment, the assessing authority determined the actual slab applicable to the assessee for each assessment year and levied the turnover tax accordingly and it is in conformity with Section 6B( 1) of the KST Act. 8. Before we proceed to examine the question raised any further, it will be relevant to note the preamendment (1st April, 2000) of the KST Act, as under: "2. Definitions. - (1) In this Act, unless the context otherwise requires, ... "(u) "tax" means a tax leviable under the provisions of this Act; [(u1) "taxable turnover" means the turnover on which a dealer shall be liable to pay tax as determined after making such deductions from his total turnover and in such manner as may be prescribed, but shall not include the turnover of purchase or sale in the course of interState tr....
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....nover" which has been used under Section 6B has the same meaning as defined under Section 2(1)(u2) and 2(v) of the Act. It may be further noticed that under Section 6B, reference is made on 'total turnover' and not the 'turnover' as defined under Section 2(v) of the KST Act and taking note of the exemption provided under first proviso clause(iii), exclusion has been made in reference to use of sale or purchase of goods in the course of interstate trade or commerce. It clearly indicates that the expression 'total turnover' which has been incorporated as referred to under Section 6B( 1) is for the purpose of identification of the dealers and for prescribing different rates/slabs. The first proviso to Section 6B( 1) provides an exhaustive list of deductions which are to be made in computation of such turnover with a further stipulation as referred to in second proviso that except for the manner provided for in Section 6B( 1), no other deduction shall be made from the total turnover of a dealer. 10. This Court, in M/s. Hoechst Pharmaceuticals Ltd. and Others case(supra), while examining the pari meteria provision of sub-Section (1) of Section 5 of the Bihar Finance Act which provides ....
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....den of additional tax. There is sufficient territorial nexus between the persons sought to be charged and the State seeking to tax them. Sufficiency of territorial nexus involves a consideration of two elements viz.: (a) the connection must be real and not illusory, and (b) the liability sought to be imposed must be pertinent to that territorial connection: State of Bombay v.R.M.D. Chamarbaugwala [AIR 1957 SC 699], Tata Iron & Steel Co. Ltd. v. State of Bihar[(1958) SCR 1355] and International Tourist Corporation v. State of Haryana [(1981) 2 SCC 318]. The gross turnover of a dealer is taken into account in subsection (1) of Section 5 of the Act for the purpose of identifying the class of dealers liable to pay a surcharge not on the gross turnover but on the tax payable by them. 11. This Court also noticed the economic superiority principle for the purpose of levy of turnover tax while holding that the interpretation of statute would not depend upon contingency. It is trite law which the Court would ordinary take recourse to golden rule of strict interpretation while interpreting taxing statutes. In construing penal statutes and taxation statutes, the Court has to apply strict rul....