- (1.) Following question of law has been referred to this court for opinion under Section 42 of the Haryana General Sales Tax Act, 1973 (for short, "the Act") by the Haryana Tax Tribunal, Chandigarh (for short, "the Tribunal"), arising out of its order dated July 14, 2000 in S. T. A. Nos. 176 and 178 of 2000-01: Whether the export sale is not part of gross turnover and therefore not includible for the purpose of calculation of notional tax liability under Rule 28-A(4)(a) of the Haryana General Sales Tax Rules, 1975 ?
(2.) The assessee-dealer, dealing in manufacturing and sale of paper and packing material, was granted exemption from payment of tax under Section 13-B of the Act read with Rule 28-A of the Haryana General Sales Tax Rules, 1975 (for short, "the Rules"). The Assessing Authority calculated notional tax liability, in terms of the provisions of the Rules without including "export sales" in the gross turnover. The Revisional Authority exercised suo motu revisional jurisdiction under Section 40 of the Haryana General Sales Tax Act, 1973 (for short, "the Act") and revised the assessment holding that export sales had to be included in the turnover for the purpose of calculation of notional tax liability. This view has been upheld by the Tribunal by referring to proviso to Rule 28-A(4)(a) of the Rules. The Tribunal, in the order in appeal, observed as under: This provision leaves no doubt that the benefit of tax exemption extends to gross turnover only, which as per the definition in the Act, includes sales in the course of export also. Therefore, while determining the tax benefit, the gross turnover which also includes export sales has to be considered and it cannot be excluded while calculating the tax benefit of finished goods.
(3.) Learned Counsel for the assessee submits that the view taken by the Tribunal is erroneous and export sales cannot constitute part of gross turnover. It is submitted that the State Legislature does not have competence to tax export sales. Once this is so, even for the purpose of calculation of notional tax liability for exemption, export sales cannot be included in the turnover. Turnover can include only sales which can legally be subjected to tax. Reliance is placed on the judgments of the honourable Supreme Court in A. V. Fernandez v. State of Kerala 1957 8 STC 561, State of Madras v. Gannon Dunkerley & Co. (Madras) Ltd. 1958 9 STC 353, Gannon Dunkerley & Co. v. State of Rajasthan 1993 88 STC 204 and Century Club v. State of Mysore and a judgment of the Bombay High Court in Varun Polymol Organics Ltd. v. State of Maharashtra 1995 97 STC 55.;