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Issues:
1. Whether the turnover is less than Rs. 50,000 and not liable to tax under s. 7-A of the Act. 2. Whether the enhancement of the turnover by the Appellate Asst. Commissioner under s. 7-A is without any justification. Analysis: The appeal was filed against the order of the Appellate Asst. Commissioner regarding the turnover determination for the year 1975-76. The assessing officer had initially determined the total turnover at Rs. 74,931.50 and levied purchase tax under s. 7-A on a turnover of Rs. 25,653.50 at 4%. The Appellate Asst. Commissioner enhanced the total turnover to Rs. 86,652 by raising the purchase turnover liable to tax under s. 7-A to Rs. 39,721. The grounds of appeal included the contention that the turnover was below the taxable minimum of Rs. 50,000, and the enhancement under s. 7-A was unjustified. The key points for consideration were whether the turnover was below Rs. 50,000 and whether the enhancement by the Appellate Asst. Commissioner under s. 7-A was justified. The assessing officer had included the turnover for a period prior to 15th July, 1975, despite objections based on a Supreme Court judgment. The validity of s. 7-A was established by the Supreme Court, and it was noted that the purchase turnover for 1975-76 was Rs. 39,721, including the addition for the period before July 15, 1975. The crucial issue was the liability of the assessee to purchase tax under s. 7-A. The analysis of s. 7-A revealed that it encompassed the exemption from sales tax under specific circumstances, and the turnover of s. 3, 4, and 5 was subject to tax under s. 7-A at the purchase stage. The definition of turnover in the Tamil Nadu General Sales Tax Act was examined, highlighting that until the introduction of s. 7-A, only sales turnover was considered for taxation. The interpretation of taxable turnover, total turnover, and turnover under the Act emphasized the focus on sales turnover liable to sales tax. The proviso to s. 7-A exempted dealers with a total turnover below Rs. 50,000 from paying tax under that section. The argument was made that the purchase turnover should not be included in the turnover under s. 3(1) of the Act based on prescribed forms and rules. The conclusion was that the lower authorities erred in adding the purchase turnover to determine the turnover under s. 7-A. Excluding the purchase turnover, the assessable turnover was found to be Rs. 46,931, making the assessee not liable to pay purchase tax under s. 7-A. In the final decision, the appeal was allowed, the orders of the lower authorities were set aside, and the levy of purchase tax under s. 7-A and s. 7 assessment was canceled.
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