Supreme Court: While examining the applicability of the turnover tax as defined under Section 6 B(1) of the Karnataka Sales Tax Act, 1957, the bench of AM Khanwilkar and Ajay Rastogi, JJ held:
“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.”
The Court said that the expression “total turnover” and “turnover” which has been used under Section 6B has the same meaning as defined under Section 2(1)(u2) and 2(v) of the Act. 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 was contended before the Court that the ‘total turnover’ in Section 6B(1) is to be read as ‘taxable turnover’ and the determination of the rate of the turnover tax is to be ascertained on the ‘taxable turnover’. The Court held that this submission was unsustainable and deserved outright rejection.
It said:
“the expression ‘total turnover’ has been referred to for the purpose of identification/classification of dealers for prescribing various rates/slabs of tax leviable to the dealer and read with first and second proviso to Section 6B(1), this makes the intention of the legislature clear and unambiguous that except the deductions provided under the first proviso to Section 6B(1) nothing else can be deducted from the total turnover as defined under Section 2(u2) for the purpose of levy of turnover tax under Section 6B of the Act.”
[Achal Industries v. State of Karnataka, 2019 SCC OnLine SC 428, decided on 28.03.2019]
