1990 (3) TMI 347 - HC - VAT and Sales Tax

Summary

Issues involved:
The judgment involves the eligibility of transport charges for exemption under rule 6(c) of the Tamil Nadu General Sales Tax Rules, 1959, and whether such charges should be treated as purchase turnover for assessment under the Tamil Nadu General Sales Tax Act.

Details of the Judgment:

Eligibility for Exemption:
The assessee contended that transport charges paid to third-party lorry owners for transporting sugarcane should be exempt from tax under rule 6(c) of the Tamil Nadu General Sales Tax Rules, 1959, citing a previous judgment. However, the Appellate Tribunal relied on a different decision and dismissed the appeals. The revision-petitioner argued that the Tribunal's finding conflicted with the previous judgment and should be set aside.

Contractual Obligations:
The judgment examined the contractual arrangements between the sugar factory and sugarcane growers. It was noted that the sugarcane price was fixed by a tripartite committee, with a stipulation that sugarcane should be delivered at the factory site. The transport charges were deducted from the purchase price payable to the growers, as per the tripartite agreement.

Legal Interpretation:
The Court analyzed previous judgments, including one where the sugarcane grower's obligation to deliver sugarcane at the factory premises was emphasized. It was established that the transport charges paid by the assessee to third-party lorry owners should be included in the taxable turnover, as they were incurred to assist the growers in transporting sugarcane to the factory.

Applicability of Previous Decisions:
The judgment clarified that the previous case cited by the revision-petitioner did not support their claim for exemption of transport charges. The Court emphasized that the charges paid to assist sugarcane growers in transporting sugarcane to the factory should be considered as part of the taxable turnover.

Final Decision:
Ultimately, the Court upheld the Appellate Tribunal's decision, stating that the transport charges should not be exempted and must be included in the taxable turnover. As a result, the three revisions filed by the assessee were dismissed.

Conclusion:
In conclusion, the Court found that the transport charges paid by the assessee to facilitate the transportation of sugarcane from the fields to the factory should be considered as part of the taxable turnover, in accordance with the relevant legal provisions and previous judicial interpretations.