THE COIMBATORE COSMOPOLITAN CLUB Vs. THE TAMIL NADU SALES TAX APPELLATE TRIBUNAL (ADDL. BENCH), COIMBATORE AND ORS.

JUDGEMENT

(1.) These Writ Petitions have been filed by Coimbatore Cosmopolitan Club aggrieved by the order of the learned Tamil Nadu Sales Tax Appellate Tribunal, Coimbatore dated 05.10.2004 upholding the orders passed by the lower authorities and holing against the Assessee that the Assessee was not entitled to deduction of exempted turnover of the food and drinks which they served in their Club even though they had suffered levy of tax at the first point and were exempted on the second sales made by such Club within their premises to the customers and therefore, on the total turnover of the Assessee, the Assessee was liable to pay tax in terms of the 2% under Section 3-D as it existed prior to its substitution with effect from 1st April 1999 substituted by Act No.28 of 1999. The reasons assigned by the learned Tribunal in the impugned order are quoted below for ready reference:

(2.) The learned counsel for the Petitioner/Assessee Mrs.R.Hemalatha, submitted that the provisions as they stood prior to 01.04.1999 substitution should be read in the light of clarification made by way of such substitution of the provisions and since in the new provisions of Section 3-D of the Act, the exempted turnover of soft drinks etc. which were not taxable in the hands of the Assessee Club being the second sales, only the net turnover could be considered as total turnover and that being less than the prescribed limit of Rs.50 Lakhs, the Assessee was entitled to pay tax as per the slabs of taxation provided in Part-A of the Ninth Schedule to the Act and not at 2% as per 3-D of the Act.

(3.) On the other hand, the learned Special Government Pleader Mr.Mohammed Shaffiq submitted that the definition of the "total turnover" is given in Section 2(q) of the TNGST Act read with Rules 5 and 6 of the TNGST Rules makes it clear that the exempted turnover is also a part of total turnover and the total turnover - (minus) the exempted turnover would only reflect the net taxable turnover which is also defined in Section 2(p) of the Act. He submitted that the definition of "total turnover" in Section 2(q) means '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 or not'. Rule 6 further clarifies this position by providing that for determining the taxable turnover, the following item shall be deducted from the total turnover. Clause (g) of Rule 6 provides that all amounts for which goods specified in First and Second and Sixth Schedules to the Act are sold or purchased by a dealer provided that the sale or purchase is not at the point of levy prescribed in the said Schedules. Rule 6 of the TNGST Rules is quoted below for ready reference.