R.M.Sahai, J. - (1.) For the assessment years 1971-72, 1972-73 and 1973-74 the assessee, a dealer in sweetmeat milk and curd, filed its return disclosing the gross turnover at less than Rs. 25,000. On 24th Aug., 74 the assessment order was passed and the assessee was declared non-taxable. Later on it transpired that the minimum turnover of Rs. 25,000/- provided in Notification No. 9378, dated 6th October, 1971 did not apply to the assessee. Consequently notice under Section 21 was issued and in proceedings for escaped assessment gross turnover was determined at Rs. 20,000/- and net turnover at Rs. 7,000/-. The order was upheld in appeal. In revision it was held that as milk and curd were exempt under Section 4 their turnover could not be taken into account tor determining the gross turnover of the assessee and if exempted turnover was excluded then the assessee shall be deemed to carry on business exclusively in sweetmeat and the Notification No. 9378 was applicable to him and no liability could be imposed on him as his turnover was below Rs. 25,000/-.
(2.) Aggrieved against the decision of Revising Authority the Commissioner of Sales Tax has filed this revision and has raised number of questions but the question which really calls for decision is quoted below. "Whether the learned Addl. Judge, Revision Sales Tax was legally justified to hold that the turnover of goods exempt under Section 4 would not be included in the gross turnover for the purpose of determining the minimum taxable limit of the dealer - The stake of the assessee in this revision is so low, a tax of Rs. 140/- only, that it did not appear despite service. The importance of the question however lies in its wider impact. A request was therefore made to Sri Bharat Ji Agrawal, Advocate who kindly consented to assist and the Court is thankful to him. For deciding the controversy raised if is necessary to examine the Notification 9378 dated 6th Oct., 1971. It reads as under: "In exercise of the powers under sub-s. (2) of Section 3 and any supersession of all previous Notifications on the subject with effect from 7th October 1971, no dealer exclusively dealing in the goods mentioned below shall be liable to tax under the U. P. Sales Tax Act, 1948 if his turnover assessment year does not exceed Rs. 25,000/-. (1) to (2) ... .. ... (3) Sweetmeat ....." By this Notification issued under sub-sec. (2) of Section 3 the minimum turnover for determining liability to pay has been increased to Rs. 25,000/- subject to the dealer carrying on business exclusively in goods mentioned in the Notification. The word exclusively means solely. A dealer carrying on business in goods mentioned in the Notification and other goods, whether exempted or not, cannot be said to be carrying on business exclusively in notified goods. The word dealer has been defined in sub-s. (c) of Section 2 of, the Act. It means any person or association of persons carrying on the business of buying or selling goods............. 'A dealer buying or selling exempted goods is as much a dealer under the Act as a dealer dealing in taxable goods. It forms part of his turnover under sub-s. (i) of Section 2 which defines turnover as the aggregate amount for which goods are supplied or distributed by way of sale Since 1973 it has been specifically provided by Explanation II added to Section 3 by U. P. Amendment Act 1 of 1973 that goods in relation to a dealer includes any goods on which he is not liable to pay tax. In other words by virtue of this explanation purchase and sale of exempted goods shall also be taken into consideration for determination of liability to pay tax or what is popularly described as his gross turnover. It is only while determining net turnover that exempted goods have to be excluded under R. 44 (d) as quantification of tax is on net turnover. The gross turnover is determined for liability and not for payability. The former is provided under sub-s. (1) and the latter in sub-sec. (2) of Section 3. It is thus obvious that the turnover of milk and curd (dahi) could be clubbed with turnover of sweetmeat for determining liability of the assessee. If under the Act sale or purchase of these items are considered as carrying on business of buying and selling by the assessee he could not be deemed to be dealing in sweetmeat exclusively for the purposes of the Notification. The minimum turnover applicable in his case was therefore Rs. 12,000/-. The view therefore taken by the Additional Judge, Revision that the assessee was an exclusive dealer because the other items in which he carried on business were exempted goods cannot be accepted to be correct.
(3.) It was urged that turnover in the notification should be understood in the same sense as it is defined in the Act. According to the learned counsel as the turnover means both taxable and exempted goods are turnover of the assessee for applicability of the notification remains the same and it was below Rs. 25,000/- the assessee was not liable to pay tax on it. The argument overlooks the.word 'exclusively. The expression 'dealing in goods mentioned below has to be read along with the word 'turnover. If a person is exclusively carrying on business in notified goods his turnover is bound to be only of these goods. If the turnover comprises of any other goods the dealer shall not be carrying on business exclusively in goods mentioned in the notification.;