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TMI Blog1992 (1) TMI 159X X X X Extracts X X X X X X X X Extracts X X X X ..... ice or in the sale price of the foodgrains, because, it was fixed by the Central Government. He pleaded that, the court could come to this conclusion by appreciating the promulgation under which the corporation came to be founded. The purpose or the object of the corporation is to procure foodgrains from the surplus states and distribute them to the deficient States, at the price as dictated or fixed by the Central Government. Therefore, there being total absence of any freedom as is normally available to a trader, the provisions of the Sales Tax Acts do not apply to it. He contended that, the sales tax that is being sought to be added is related to the corporation's activity of collection and distribution of wheat. He submitted that, the procurement and distribution of wheat as per orders of the Government is on similar lines as was examined and evaluated by the Punjab Haryana High Court on the levy of rice. He pleaded that, the provisions of Sales Tax Act apply to a trader or dealer, who has the freedom to deal in such goods and at such places, as the dealer pleases. He contended that, when such freedom does not exist, the appellant could not be held to be liable for any sales ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ax, and the same having not been paid within the accounting year, it has been rightly added back or disallowed under section 43B of the Income-tax Act. 3. We have given our very careful consideration to the rival submissions. The ruling of the Punjab Haryana High Court in the case of the assessee and the order of the Tribunal for asst. year 1985-86 in the case of the assessee has been perused very carefully. The order of the Government on the Price Procurement Policy of wheat Dt. 7th 19th April, 1983, and the issue price of wheat dated 12th Feb. 7th April, 1983 and the State-wise allotment of wheat and rice dated 8th March, 14th April, 10th May 6th June, 1983 have also been perused. 4. ThePunjab Haryana High Court in the case of the assessee had made note of the fact that, the appellant was a registered dealer under Central Sales Tax Act and the Haryana General Sales Tax Act. It had also noted the fact that, the appellant was procuring rice, paddy and other foodgrains in the surplus States through the aegis of the State Government and its officers and distributes the foodgrains so procured to the deficit States. There, the Haryana State Government, in pursuance of th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sale price, as also the place of sale, he cannot be designated as a dealer within the meaning of the Haryana General Sales Tax Act. The Court held that Food Corporation which has procured the rice according to the promulgation of the Government's order, at the price fixed by the Government and distributed it to the States according to the notification issued by the Government, which clearly showed that, Food Corporation had no freedom regarding procurement or distribution or the price of procurement distribution, as is normally enjoyed by a dealer, and combined with the total absence of any profit motive at any stage, it cannot be a dealer and, therefore, the provisions of the Sales Tax Act do not apply to it. 5. The provisions of the Income-tax Act would apply to a person, who could be termed to be an assessee, within the meaning of that term, as defined by that Act. This would be in as far as it is concerned with the income earned by that person. Whether that person is governed by the provisions of any other Act or not, is primarily an issue to be considered and examined in the light of the provisions of that Act. This is so since, Income-tax Act is not a composite Statute, b ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... elow grade two should not be procured. Similarly, they have also directed the price at which supply shall be made to the Flour Mills. The price was revised upward to Rs. 160 per quintal. This was followed by the allotment of the foodgrains to the various States, which was revised a few times in the year 1983-84. The price at which the distribution was to be effected was also fixed by the Government. The above feature clearly reveals that, the appellant is mere procurer for the Government, of the type of foodgrain, at the price dictated by it, and is a distributor to the various States according to the quota or quantity fixed by the Government and this distribution price too is decided by the Government. The appellant at no point has no freedom as is available to a dealer, and is therefore, merely functions as an agency for the Government, which is, the sole purpose of inaction of the promulgation of the Food Corporation of India Act, 1964. Therefore, since, this agency of the Government having only acted on the directions of the Government, it could not be said that it had acted with any profit motive. The element of profit motive would arise when there is freedom attached to the t ..... X X X X Extracts X X X X X X X X Extracts X X X X
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