9911796707
TMI Blog1995 (1) TMI 117X X X X Extracts X X X X X X X X Extracts X X X X ..... ee is a registered firm engaged in the business of purchase of coffee seeds and sale of coffee powder, chickarry and tea. In the course of the assessment, the Assessing Officer noticed that the assessee debited an amount of Rs. 73,420 to the profit and loss account as provision for purchase tax payable to the Coffee Board. According to the assessee, the Coffee Board had issued a communication to t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d therefore the said collection was made only as part of purchase price. Since the liability had arisen during the year, the claim was made. But the Assessing Officer disallowed the claim of the assessee. Before the first appellate authority also the assessee did not succeed. Hence, the assessee is in second appeal before the Tribunal. 2. We have heard rival submissions and per-used the records. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... enses, should be refunded to the dealers, if the Supreme Court were to hold that there was no liability on the Board for the purchase tax. If, on the other hand, the Board's liability was upheld by the Supreme Court, the contingency deposit should be appropriated for payment of the purchase tax due. The Board took a decision to collect contingency deposit. By communication dated 16-5-1984, the Boa ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sit in respect of the following purchases made by it at the public auction as it had obtained interim stay from the High Court of Karnataka in its order dated 15-11-1985. The assessee's previous year ended on 31-12-1985 relevant to the assessment year 1986-87. It follows mercantile system of accounting. Though it disputed its liability to pay contingency deposit for the impugned amount it made pro ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... taxable event is on the purchase effected by it from growers or on inter-state transfers. The incidence of tax is on Coffee Board. There is no tax on second sale so far as the coffee is concerned. Therefore, it cannot be said that the assessee is under any obligation to pay tax on the purchase effected by it from the Coffee Board. Hence, the authorities erred in looking upon the scheme of continge ..... X X X X Extracts X X X X X X X X Extracts X X X X
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