1984 (1) TMI 290 - HC - VAT and Sales Tax

Summary

Issues involved:
The judgment deals with tax revision cases under section 38 of the Tamil Nadu General Sales Tax Act, 1959, related to the eligibility of deduction for transport charges from the purchase turnover of co-operative sugar mills.

Issue 1: Eligibility of deduction for transport charges
The common question in these cases is whether the turnover referable to the payment of transport charges is eligible for deduction from the purchase turnover of the petitioners, co-operative sugar mills. The mills deducted transport charges from the statutory price payable to sugarcane growers, but authorities held that such deduction was not permissible as the purchase price of sugarcane was fixed by the Government. The Tribunal found that the mills were not entitled to reduce the cane price fixed by the Government by deducting transport charges. The mills contended that the transport charges were post-purchase expenses and should not be included in the purchase price.

Issue 2: Contractual obligations and delivery terms
The mode of fixation of sugarcane price and the terms of the contract between the mills and sugarcane growers were examined. The sugarcane growers agreed to deliver sugarcane at the mill or factory premises as per the registration application and agreements. The mills provided lorries to facilitate delivery but did not alter the contractual obligation of the growers to deliver at the mill premises. The billing practice and contractual terms indicated that the statutory price was recognized as the purchase price, and transport charges were considered amounts payable by the growers, initially paid by the mills and later recovered from the growers.

Conclusion:
After considering the facts and circumstances, the Court held that the petitioners cannot claim to exclude transport charges from their assessable turnover. The authorities' conclusions were deemed correct, and the tax revision cases were dismissed without costs.