9911796707
TMI Blog1994 (11) TMI 399X X X X Extracts X X X X X X X X Extracts X X X X ..... are contained in the correspondence between the assessee and the Posts and Telegraphs Department, the copper which is used in the manufacture of the cables, was being supplied by the Posts and Telegraphs Department to the assessee. The assessee was manufacturing the cables from out of the said copper and selling the cables to the Posts and Telegraphs Department. The assessee was also making use of the said copper supplied by the Posts and Telegraphs Department for manufacturing the cables for other customers also. In such cases, the assessee was reimbursing the cost of the copper to the Posts and Telegraphs Department. The turnover of the cables supplied by the assessee to the Posts and Telegraphs Department was assessed under the Andhra Pradesh General Sales Tax Act on the basis of the total amounts set out in the bills issued by the assessee. It appears that during the assessment year 1977-78, both under the Andhra Pradesh General Sales Tax Act as well as Central Sales Tax Act, the assessing authority noticed that in the provisional bill, the cost of the copper was included but in the fi- nal bills, the same was not included. The assessing authority issued notice under section ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he turnover so as to be exigible to the sales tax either under the APGST Act or under the Central Sales Tax Act (hereinafter referred to as "the CST Act"); and (2) Whether the reopening of the assessment for the years 1975-76 and 1976-77 was valid in law?" To consider the first question, it would be apt to remind ourselves of the definition of the expression "turnover" in section 2(s) of the State Act which is in the following terms: "(s) 'Turnover' means, (i) the total amount set out in the bill of sale; (ii) the total amount of consideration for the sale or purchase of goods as may be determined by the assessing authority, if the bill of sale does not set out correctly the amount for which the goods are sold; or (iii) if there is no bill of sale, the total amount charged as the consideration for the sale or purchase of goods by a dealer either directly or through another, on his own account or on account of others, whether such consideration be cash, deferred payment or any other thing of value and shall include,- (a) the cost of any goods as determined by the assessing authority, (i) to have been used or supplied by the dealer in the course of execution of the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ned and agreed to in the case of cables for the production of which P T's recovered copper is used. (2) The calculation of profits on the cost of such cables may be made including the cost of copper at the P T's accounting price ruling in the year. (3)................. (4) In the event of the P T's recovered copper wire being used in the production of cables and wires supplied to departments other than the P T's the value of copper thereof shall be charged at the ruling MMTC's prices and the difference in such value above the P T accounting price shall be returned to P T in cash at the end of the year with full information about the supplies made and their copper content. (5)................. (6)................." A perusal of the clauses extracted above shows that the "copper wire" was supplied by the Posts and Telegraphs Department on zero value basis to the assessee and the assessee was under an obligation to convert it into cables and account for the same. The profits of the assessee are calculated in terms of clause (2) referred to above, that is, the assessee will be entitled to profit on the cost of the cables which would include the cost of copper at the Posts ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... mixture on the condition that the fertilizer mixture should be sold at a particular price fixed by them. Against that price, a rebate will be given for the value of the groundnut oil-cake supplied by the sugar factory and the balance will have to be paid by the sugar factory towards the price of the mixture. The question that fell for consideration by this Court was, whether the value of the entire mixture should be taken as the turnover of the assessee or only the price paid by the sugar factory should be taken as the turnover. It was held that the contract between the parties was not for work and labour, or a mixed contract of labour and material, in other words works contract, but a contract for the sale of the finished fertilizer mixture de hors its ingredients and that the assessee received groundnut oil-cake at fixed price as part of the price and that would not make the transaction anything but a sale of the entire fertilizer mixture. The facts stated in Hyderabad Chemicals and Fertilizers Ltd. v. Deputy Commissioner, Commercial Taxes [1962] 13 STC 812 (AP) are clearly distinguishable from the facts of the present case as what was supplied by the assessee in that case was ..... X X X X Extracts X X X X X X X X Extracts X X X X
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