TMI Blog1985 (4) TMI 266X X X X Extracts X X X X X X X X Extracts X X X X ..... t arises for determination in these cases. 2.3. But, in order to appreciate the contentions urged before us, it is useful to notice the facts in Writ Appeal No. 2765 of 1982 and Writ Petition No. 25935 of 1982 as illustrative only and not as exhaustive. *Reported as P.K.P. Abdul Hakeem Co. v. State of Karnataka in [1983] 52 STC 205. 3.1. Writ Appeal No. 2765 of 1982: P.K. Abdul Hakeern and Company of Mysore, petitioner in Writ Petition No. 12324 of 1982 a partnership firm of partners engaged in the business of dealing in hides and skins, purchased them locally either from unregistered or registered dealers and effect their sales in the course of inter-State trade. For the relevant period atleast hides and skins were declared goods and were so assessable to tax under the K.S.T and C.S.T. Acts. 3.2. For the period from 1st April, 1978 to 31st March, 1979 the petitioner filed its return under the C.S.T. Act before the Commercial Tax Officer, First Circle, Mysore (C.T.O.) disclosing a total and taxable turnover of Rs. 12,07,915.20 out of which a sum of Rs. 12,03,129 was supported by form C and the balance of Rs. 4,787.00 was not supported by form C. On an examination of t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ioner, a partnership firm of partners, a registered dealer under the K.S.T. and C.S.T. Acts, is a dealer in cotton which is one of the declared goods. 4.2. For the period from 4th November, 1985 to 23rd October, 1976, the petitioner filed its return under the K.S.T. and C.S.T. Acts before the Assistant Commissioner of Commercial Taxes (Assessments), Dhrawad (C.T.O.) declaring the intrastate sales and inter-State sales turnovers. After completing assessment under the K.S.T. Act separately with which we are not now concerned, the C.T.O. on 16th January, 1978 completed his assessment against the petitioner under the C.S.T. Act (annexure A) as hereunder: "The assessment is therefore finalised as under: Gross turnover Rs. 4,68,06,970.93 Less: Turnover assessed under K.S.T. Act, 1957 Rs. 2,64,56,078.81 ------------------ Total inter-State sales Rs. 2,03,50,892.12 Less: Deduction u/s 8-A 20031559 X 3 Rs. 5,83,443.43 ------------ 100 X 3 ------------------ Taxable inter-State sales Rs. 1,97,67,448.69 Classification 1.. Inter-State sales of cotton with C forms Rs. 1,97,67,448.69 @ 3% Rs. 5,93,023.47 Less: Tax already paid Rs. 5,90,292.53 --------------- Balance ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d B.V. Katageri, learned Advocates, have appeared for the petitioners. 9.. Sri S. Rajendra Babu, learned Government Advocate, has appeared for the appellant in Writ Appeal No. 2765 of 1982 and the respondents in all the writ petitions. 10.. Both sides have relied on a large number of rulings in support of their respective cases and we will refer to them at the appropriate stages. 11.. The case of the petitioner in Writ Petition No. 12324 of 1982 has been accepted by Rama Jois, J., in these words: "4. Section 6-B of the 'Act' provides for levy of additional tax on the turnover, as provided in the said section. There is no provision in the Central Sales Tax Act providing for the levy of additional tax. The notice, however, states that the additional tax payable under the Central Act comes to Rs. 7,265.40. The demand to this extent is plainly unsupportable in law." Sri Babu has contended that this order made by Rama Jois, J., without examining all the relevant provisions of the K.S.T. and C.S.T. Acts and the rulings of the Supreme Court and this Court touching on them is unsustainable in law. 12.. Sri Katageri appearing for the petitioner/respondent has sought to support the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ed goods mentioned in the Fourth Schedule, the tax plus the additional tax shall not exceed three per cent of the sale or purchase price thereof. (2) The provisions of this Act and the rules made thereunder including those relating to refund or exemption from tax shall, so far as may be, apply in relation to the levy, assessment and collection of the additional sales tax or purchase tax or both as they apply in relation to the levy, assessment and collection of sales tax and purchase tax under this Act". The Karnataka Sales Tax (Second Amendment) Act, 1975 (Karnataka Act No. 16 of 1975) (1975 Act) that came into force on 1st April, 1975 [vide: subsection (2) of section 1 of that Act] substituted the original section 6-B from 1st April, 1975 as here under: "6-B. Levy of additional tax.-(1) There shall be levied and collected from every dealer liable to pay tax under section 5 or under section 6 and whose total turnover is ten lakh rupees or more in a year, an additional tax at the rate of ten paise in the rupee on the sales tax or purchase tax or both payable by such dealer: Provided that in respect of the sale or purchase of any of the declared goods mentioned in the Fourth ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... se of export outside the territory of India or sale or purchase in the course of import into the territory of India; and (v) all amounts collected by way of tax under the provisions of this Act or the Central Sales Tax Act, 1956 (Central Act No. 74 of 1956). (2) The provisions of this Act and the rules made thereunder including those relating to refund or exemption from tax shall, so far as may be, apply in relation to the levy, assessment and collection of the tax payable under sub-section (1), as they apply in relation to the levy, assessment and collection of sales tax or purchase tax under this Act." The Karnataka Taxation and Certain Other Laws (Amendment) Act, 1982 (Karnataka Act No. 13 of 1982) (1982 Act) substituted the above provision by a new provision retrospectively with effect from 29th March, 1981 and the same reads thus: "6-B. Levy of turnover tax.-(1) Every dealer whose total turnover in a year exceeds, rupees one and a half lakhs, whether or not the whole or any portion of such turnover is liable to tax under any other provision of this Act, shall be liable to pay a tax at the rate of one-half per cent of his total turnover: Provided that no tax under thi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ave said earlier, the nature of levy was really an additional tax on sales or purchase tax or both. 20.. But, from 1st April, 1977 the nature of levy made under section 6-B became entirely different. The nature of levy from 1st April, 1977 was really a turnover tax on the total turnover of a dealer. The controversies raised by the dealers on the scope and ambit of section 6-B of the Act on and after 1st April, 1977 and their validity at least in so far as whether the turnovers of dealers under the C.S.T. Act should or should not be included in determining the turnover for levy of turnover tax on and from that date are concluded by the two Division Bench rulings of this Court in B.P. Automobiles v. State of Karnataka [1984] 55 STC 93; [1983] 2 Kar LJ 105 and Shantilal and Brothers v. State of Karnataka [1985] 59 STC 178; [1984] 1 Kar LJ 69. We are here not concerned with any liabilities arising on and after 1st April, 1977 which has necessarily to be regulated in conformity with those rulings only. 21.. With the above analysis, we now proceed to examine the rival contentions urged before us. 22.. We have earlier set out section 6-B of the K.S.T. Act as it stood from 1st Decemb ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... or commerce not falling within sub-section (1).- (a) in the case of declared goods, shall be calculated at twice the rate applicable to the sale or purchase of such goods inside the appropriate State and (b) in the case of goods other than declared goods, shall be calculated at the rate of ten per cent or at the rate applicable to the sale or purchase of such goods inside the appropriate State, whichever is higher; and for the purpose of making any such calculation any such dealer shall be deemed to be a dealer liable to pay tax under the sales tax law of the appropriate State, notwithstanding that he, in fact, may not be so liable under that law. (2A) Notwithstanding anything contained in sub-section (1A) of section 6 or sub-section (1) or clause (b) of sub-section (2) of this section, the tax payable under this Act by a dealer on his turnover in so far as the turnover or any part thereof relates to the sale of any goods, the sale or, as the case may be, the purchase of which is, under the sales tax law of the appropriate State, exempt from tax generally or subject to tax generally at a rate which is lower than four per cent (whether called a tax or fee or by any other name) ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... slative competence of the State to levy additional tax or turnover tax imposed by the Tamil Nadu Additional Sales Tax Act, 1970. In this case also, the Court was not examining a similar provision which does not provide for enhancement of levy on declared goods or on inter-State sales or purchases. Hence, the ratio in Kodar's case [1974] 34 STC 73 (SC) does not also bear on the point. 27.. In A.S. Ramachandra Rao v. State of Andhra Pradesh [1969] 24 STC 133 approved by the Supreme Court in Kodar's case [1974] 34 STC 73 (SC), the Andhra Pradesh High Court was examining the constitutional validity of section 5-A of the Andhra Pradesh General Sales Tax Act, 1957 which reads thus: "Levy of additional tax on turnover-Every dealer who is liable to pay tax under section 5 shall, in addition to the tax payable under that section pay for each year a tax at the rate of one-fourth naya paisa on every rupee of his turnover liable to tax, if his total turnover for that year is rupees three lakhs or more." This section as also held by the A.P. High Court and the Supreme Court provided for levy of additional tax on turnover. But, that is not the position in section 6-B of the Act for the per ..... X X X X Extracts X X X X X X X X Extracts X X X X
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