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TMI Blog2013 (6) TMI 504X X X X Extracts X X X X X X X X Extracts X X X X ..... ssee is a department of the Central Government who is engaged in the manufacturing and sale of Drugs. Opium is a raw material for manufacturing of various drugs. So, opium is cultivated by the farmers on behalf of the Central Government and for such cultivation, a license is granted by the Central Government through Narcotics Commissioner to various cultivators. It is also claimed that each and every opium poppy is accounted for on account of the Central Government. For violation of the direction or selling the opium to another person is a punishable offence against the cultivator. Thus, the cultivator has no right over the opium. It is claimed by the department that there is no sale or purchase activity. Thus, cultivators are handing over ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... dia vs. Sales Tax Officer, Ghazipur. He also relied on the ratio laid down in the case of Board of Revenue vs. A.M.Ansari, 1976 STC, 577, Vol. 38. But he submits that Hon'ble Supreme Court did not discuss the licence part. So, the judgment of the case is not applicable in the instant case. On the other hand, Sri H.P.Srivastava, learned Additional Chief Standing Counsel submits that the Hon'ble Supreme Court has observed in the above mentioned case that the sale of the opium to the Narcotic Department is taxable item. For this purpose, Hon'ble Supreme Court has discussed the ratio laid down in the case of M/s. Vishnu Agencies (Pvt.) Ltd. vs. Commercial Tax Officer and other; and Dhanyalakshmi Rice Mills, Contractors Gutha Subba Rao & others ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e Board Karnataka, Banglore Vs. Commissioner of Commercial Taxes, Karnataka and others, 1988 SCC (Tax) 308, where it was observed by the Hon'ble Apex Court that:- "47. The coffee growers being agriculturists are not dealers and therefore are not liable to pay any sales tax or purchase tax, it was submitted. The demand for purchase tax is in effect a demand on the growers who were exempt from such levy, as the monies required for paying the tax if the same is lawful has necessarily to come out of the monies otherwise payable to the growers. The object of the pool marketing system is not to deprive the growers of a fair compensation for their produce by making them suffer a tax which they would not otherwise be required to suffer. An analysi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nder controls at fixed price and accept these as any other law of the realm because they must be deemed to have contracted at a fixed price both sides having or deemed to have agreed to such price. Consent under the law of contract need not be expressed, it can be implied. This is the position under the scheme of the Coffee Act. It has to be emphasised like the Vishnu Agencies's case a person for all practical purposes is free to become or not to become a grower of coffee. So it is also covered by the ratio of Vishnu Agencies Pvt. Ltd. 50. In the aforesaid view of the matter, we are of the opinion that the imposition of tax in a manner done by the Sales tax Authorities which had been upheld by the High Court is correct and the High Court w ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... interest at the rate of [fourteen percent per mensem] shall become due and be payable on the unpaid amount with effect from the day immediately following the last date prescribed till the date of payment of such amount whichever is later, and nothing contained in Section 7 shall prevent or have the effect of postponing the liability to pay such interest." In the above Section, the word 'shall' is mandatory. So, charging of the interest is mandatory. Moreover, the charging of the interest is mandatory and Courts have no power to waive or restricted it, as per the ratio laid down in the following cases: 1. CIT vs. Santram Mangatram Jewellers, 264 ITR, 564 SC 2. CIT vs. Arjun M.H. Ghashwala, 252 ITR, 1 SC; and 3. CIT vs. INSIL Company Lt ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... , 105 and 106 of 1996 have been filed by the department against the impugned orders passed by the Tribunal. The learned Tribunal observed in their judgments that the tax is not leviable on the opium grown by the farmers, on behalf of Narcotic Department. After hearing both the parties, it may be mentioned that the Hon'ble Apex Court in the case of Union of India vs. Sales Tax Officer, Ghazipur (supra) observed that the opium is taxable item under the U.P. Trade Tax Act. Therefore, the impugned orders passed by the Tribunal are hereby set aside and the orders passed by the A.O. are hereby restored in the revisions in the question. Thus, the revisions filed by the department are allowed. In the result, the revisions filed by the assessee ar ..... X X X X Extracts X X X X X X X X Extracts X X X X
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