The levy under section 6-B of the Karnataka Sales Tax Act is based on the totality of the dealer's dealings, not just the taxable turnover, and there is a distinction between 'total turnover' and 'taxable turnover'.

K. SHIVASHANKAR BHAT, J.

( 1 ) FOR the assessment year 1976-77 the appellant was assessed to tax under the provisions of the karnataka Sales Tax Act, 1957 ("the Act" for short ).

( 2 ) THE appellant is a dealer dealing in gold and silver articles and generally purchases gold ornaments which thereafter are sold after conversion. The appellant had filed a return declaring the total turnover of Rs. 9,84,340. 44. The appellant had claimed exemption in respect of the turnover pertaining to purchase of gold ornaments relying upon the notification issued by the government in that regard. That tax on purchase is levied under section 6 of the Act but by virtue of the notification issued by the Government, regarding which there was no dispute, the said turnover was excluded. The assessing authority by its order dated October 27, 1977, assessed the appellant to a total tax of Rs. 37,810. 61 after holding that the total turnover of the appellant as Rs. 9,46,073. Subsequently, the assessing authority initiated proceedings under section 12-A of the Act proposing to levy tax under section 6-B of the Act on the ground that the total turnover of the appellant exceeded Rs. 10 lakhs and for the purpose of the said provision the turnover which was exempted under section 6 also will have to be included. Consequently, at the rate of 10 per cent on the tax assessed earlier on Rs. 37,810. 61 the additional tax of Rs. 3,781 was assessed. This was on April 5, 1979. The total turnover was held to be Rs. 10,71,439 for the purposes of section 6-B. The appellant filed an appeal before the Deputy Commissioner, who allowed the appeal. The appellate authority held that it was not a case for initiating proceedings under section 12-A of the Act because there was escapement of turnover, since the assessee had disclosed the turnover but excluded the same for the purpose of taxation. Secondly, he held that the purchase turnover of old articles of silver and gold while computing the total turnover should be excluded in view of the exemption notification. According to the first appellate authority, since the purchase tax is not leviable on the purchase of old articles of silver and gold those purchases cannot be included for the purpose of section 6-B also. The Commissioner of commercial Taxes revised this order in the exercise of his power under section 22-A. The commissioner referred to rule 6 of the Karnataka Sales Tax Rules, 1957. According to the commissioner, as per this rule the entire turnover will have to be grossed up, whether particular turnover is exempted from levy of tax or not. Hence this appeal.

( 3 ) MR. B. V. Katageri, learned counsel for the appellant, contended that under section 6-B of the act, as was in force during the relevant period, the liability to pay the additional tax arises only if the dealer is liable to pay the tax either under section 5 or section 6 of the Act and if a dealer is not liable to pay tax under section 6 then the said turnover under section 6 will have to be excluded. The learned counsel pointed out that under section 6-B, what is levied is an additional tax which itself indicates that it is a tax in addition to normal tax payable by the dealer under section 5 or section 6 of the Act.

( 4 ) THE relevant part of section 6-B (1) reads thus : "section 6-B. Levy of additional tax.- (1) There shall be levied and collected from every dealer liable to pay tax under section 5 or under section 6 and whose total turnover is ten lakh rupees or more in a year, an additional tax at the rate of ten paise in the rupee on the sales tax or purchase tax or both payable by such dealer. " the first part of this provision purports to identify the dealer who is liable to pay the additional tax. The tax under section 6-B is to be levied and collected from a dealer who is liable to pay the tax under section 5 or under section 6. Further, the condition is to be that the total turnover of the said dealer should be Rs. 10 Lakhs or more in an y

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