TMI Blog1997 (2) TMI 536X X X X Extracts X X X X X X X X Extracts X X X X ..... formers. The assessment years in question in these cases are 1989-90, 1992-93 and 1993-94. 3.. During the assessment years in question, petitioner had undertaken the manufacture of transformers to M/s. Kirloskar Company, Bangalore. After such manufacture, petitioner has effected sale of such goods which are liable to tax under the Act, to the brand name holder namely, M/s. Kirloskar Company. The sale of such goods by the manufacturer to the brand name holder is deemed to be "not a sale" by the first dealer liable to tax under the proviso to section 5(3)(a) of the Act. 4.. Petitioner claimed exemption from levy of turnover tax under section 6-B of the Act for the assessment years in question on the pretext that the sale of branded goods ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ted June 5, 1987 is not only invalid and illegal and further assessment framed relying on the clarification is not only bad but contrary to the provisions of section 6-B of the Act. In support of his thinking, the learned counsel relies upon the observations made by Supreme Court in the case of A.V. Fernandez v. State of Kerala [1957] 8 STC 561, the decision of this Court in the case of Madhur Trading Co. [1993] 90 STC 537 and B.P. Automobile's case [1984] 55 STC 93. 8.. Per contra, Sri Shivayogiswamy, the learned counsel for revenue sought to justify the impugned order made by the Sales Tax Officer and strongly resists the reliefs sought by the petitioner 9.. The Sales Tax Officer, while framing the assessments for the assessment years ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... to tax under this section. 11.. Proviso to the sub-section carves out an exception to main sub-section. The essential ingredients of the aforesaid provision are: "(a) the goods must be liable to tax under the Act; (b) that goods must be produced or manufactured by a dealer; (c) the production or manufacture should be for the brand name or trade mark holder. (d) the brand name holder should not use the goods purchased as raw materials, component parts or packing materials; (e) the sale of such goods by the manufacturer to the brand name holder is deemed not to be a sale by the first dealer liable to tax; and (f) the subsequent sale of such goods by the brand name holder or his agent or any other person acting on his behalf is d ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... deductions is permissible from the total turnover of a dealer apart from the exemptions enumerated under the first proviso. 15.. In the charging section, we have the expressions like "total turnover" and "turnover". The word "total turnover" is defined under the Act to mean the aggregate turnover in all goods of a dealer at all places of business in the State, whether or not the whole or any portion of such turnover is liable to tax. Likewise, the expression "turnover" is also defined to mean the aggregate amount for which the goods are bought or sold or supplied or distributed by a dealer, whether for cash or for deferred payment or valuable consideration. 16.. For the purpose of imposition of tax under section 6-B of the Act, the pre ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... to be a sale by the first dealer liable to tax under sub-section (3)(a) of section 5 of the Act. It is pertinent to notice here itself, that goods are liable to tax but the transfer of property in the goods by the manufacturer to the brand name holder is exempted from levy of sales tax. It is again to be noticed that in the normal course that subsequent sale would not have been exigible to tax under the Act but the Legislature by creating a fiction imposes liability to pay sales tax on a subsequent dealer, who would not otherwise be liable to pay tax under the Act. The Legislature by using the expression "deemed" brings such subsequent dealer to the net of chargeability to tax under the Act. 19.. Section 6-B of the Act creates levy of tu ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ons or refund or rebate of tax, the sales or purchases would have to be included in the gross turnover of the dealer because they are prima facie liable to tax and the only thing which the dealer is entitled to in respect thereof is the deduction from the gross turnover in order to arrive at the net turnover on which the tax can be imposed. In the latter case, the sales or purchases are exempted from taxation altogether. The Legislature cannot enact a law imposing or authorizing the imposition of a tax thereupon and they are not liable to any such imposition of tax. If they are thus not liable to tax, no tax can be levied or imposed on them and they do not come within the purview of the Act at all. The very fact of their non-liability to ..... X X X X Extracts X X X X X X X X Extracts X X X X
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