Coimbatore District ... v. Deputy Commercial Ta...

(The Chief Justice):

1. The batch of cases involves construction of S.S of the Tamil Nadu General Sales Tax Act. The assessee, the Coimbatore District Central Co-operative Supply and Marketing Society Ltd., was found to have a turnover of Rs. 5,30,92,979-52. Out of this turnover Rs. 3,68,34,733-11 was given exemption under S. 17 read with item 44 of an order of Government issued under that section. The taxable turnover was thus found to be Rs. 1,62,58,246-41. This turnover was subjected to tax under S. 3(1). Later, the Deputy Commercial Tax Officer, on a further verification of the assessment files, estimated a turnover of Rs. 9,44,156-90 to be liable to tax under S. 5 of the Act. There is no controversy that this turnover represented sales of the type comprehended by S. 5.

2. What is contended for the assessee is that even so when the entire turnover of Rs. 5,30,92,979-52 was the subject-matter of assessment under S. 3(1), there is no further room for application of S. 5. In other words, Mr. Chari submits that the assessment was an entire thing and, once it was subjected to S. 3(1), few sales out of the assessment could not be singled out for charging under S. 5. The argument goes so far as to suggest that S. 5's scope is confined only to lift or cancel the exemption limit provided by S. 3(1) by the use of the words ‘whatever be the quantum of his turnover in S. 5. We are unable to accept that this is the proper construction to be placed on S. 5. S. 3(1) is the main charging section which levies multi point tax. But the charge will be attracted only if the dealer returns or is found to have a turnover beyond the exemption limit. The section thus provides for an exemption limit and also for a charge specifying the rate. S. 17(1) empowers the Government to grant an exemption in specified or class of goods from charge and, in the instant case, because of the character of the assessee and the sales, the exemption we mentioned under item 44 was applied. But this, of course, will have nothing to do with construction of S. 5 as such. The scheme of S 5 appears to be that, since it opens with a non obstante clause, to wit, notwithstanding anything contained in sub-S. (1) of S. 3, it has to be taken that S. 5 prevails over S. 3(1). That, in our opinion, is the effect of the application of the non obstante clause. If that be so, as we consider to be the case, S. 5 covers the charge, the quantum of turnover to be brought under the charge and the rate. Where sales are of the specified type described in S. 5, they become chargeable not under S. 3(1) because of the non obstante clause in S. 5 which is a special charging section. It is self contained as S. 3(1). It is not unusual that where a turnover of sales, when split up, is found to contain a variety of transactions which are differently dealt with for the purpose of charging under the Sales Tax Act, it is no argument, because there is a compendious assessment, that the sales which attract the special charge could not be separated from assessment. Nor are we persuaded by the contention that the scope of S. 5 is so narrow that it only has reference to cancellation of the exemption limit under S. 3(1), and that, whatever be the quantum of turnover, the sales of the type mentioned in S. 5 will not attract the charge.

3. In our opinion, Sivamurugan v. Asst. Commercial tax Officer(1) was rightly decided.

4. The writ appeal and tax cases are dismissed with costs in each of them. Counsel's fee Rs. 150.

V.C.S