1991 (7) TMI 366 - HC - VAT and Sales Tax

Summary

Issues involved:
The judgment deals with the issue of whether a subsidy paid by the assessee to cane growers for early planting can be considered as part of the purchase turnover of sugarcane.

Summary:
1. The assessing authority included the subsidy amount in the taxable turnover, considering it as part of the purchase turnover of sugarcane, leading to the imposition of additional sales tax.
2. The appellate authority upheld the inclusion of the subsidy in the taxable turnover, following judgments of the Karnataka High Court, while the Tribunal reversed this decision, stating the subsidy was independent and not part of the purchase price.
3. Citing precedents, the High Court emphasized that any payment made in lieu of sugarcane supplied should be included in the taxable turnover, regardless of the purpose or timing of the payment, as long as it is related to the supply of sugarcane.
4. Referring to previous cases, the Court reiterated that charges paid to cane growers for transporting sugarcane to the mill should be included in the taxable turnover, emphasizing the agreement between growers and manufacturers.
5. The Court distinguished a previous judgment where an additional payment was not considered part of the cane price, as in the current case, the subsidy was voluntary and formed part of the agreement for early sugarcane supply.
6. The Court dismissed the Revenue's revision, holding that the subsidy should be treated as part of the purchase price of sugarcane, setting aside the Tribunal's decision and restoring the assessing authority's and appellate authority's orders.

Separate Judgement:
None.