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TMI Blog2009 (3) TMI 951X X X X Extracts X X X X X X X X Extracts X X X X ..... Held that:- The provision is illustrative with regard to the aggregate of the amounts of purchases and parts of purchases actually made by any dealer. Therefore, it would include the price of bag, labour charges, stitching charges, price of jute thread, dammi and carriage, etc. In that regard, the contention of the learned State counsel deserves to be accepted that there is no delivery taken before weighment, which is not possible without packing the agricultural produce in a gunny bag. We also find substance in the contention of the learned counsel that even stitching and labour incurred for all these activities have to be included for effective delivery of the goods, which would include carriage also. Therefore, question No. 1 deserves to be answered in favour of the Revenue and against the dealerFCI. Both the questions 2 and 3 are covered by the judgment of the honourable Supreme Court in Food Corporation of India v. State of Kerala [1997 (1) TMI 459 - SUPREME COURT OF INDIA] , thus liable to be answered in favour of the Revenue and against the dealer-FCI. Once the element of market fee is not to form part of the consideration then it cannot be included in the total t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he case, the Tribunal is right in law in holding that the market fee can be subjected to tax under the provisions of the Act which had been recovered from the purchasing dealer, viz., Food Corporation of India and ratio of the law laid down in the Supreme Court (Anand Swarup Mahesh Kumar v. Commissioner of Sales Tax [1980] 46 STC 477; [1980] 4 SCC 451) was not applicable to the facts of the case? Facts (G.S.T.R. No. 14 of 1990) Brief facts of the case as per the statement of case sent by the Tribunal in G.S.T.R. No. 14 of 1990 are that the FCI, which is a registered dealer under the Act, filed its quarterly returns in respect of the assessment years 1972-73 to 1975-76, showing its gross turnover. The Assessing Authority being not satisfied issued notices in form ST-XIV under section 11(2) of the Act for production of account books. After production thereof the Assessing Authority, Ferozepur, vide various orders finalised the assessments for the years 1972-73 to 1975-76. Against the orders of the Assessing Authority, the FCI filed appeals before the Deputy Excise and Taxation Commissioner (Appeals), Ferozepur Division at Bathinda, who vide order dated November 17, 1978 dismis ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... I filed an application under section 22(1) of the Act before the Tribunal to refer the questions of law to this court, which was dismissed vide order dated November 29, 1989. The FCI then filed an application under section 22(2) of the Act, bearing STC No. 5 of 1990, in this court for directing the Tribunal to refer the questions of law for opinion of this court, which was allowed vide order dated October 3, 1990. In this manner, the aforementioned four questions of law (three are similar to the one referred in G.S.T.R. No. 14 of 1990, the fourth one is additional question) have come up for determination by this court. Re: Question No. 1 The first question which arises for consideration pertains to the incidental charges incurred by the dealer-FCI either at the time of or before the delivery of the goods. The Assessing Authority, the Appellate Authority as well as the Tribunal have found these incidental charges to be part of consideration, as such charges are covered by the expression turnover , as defined in section 2(i) of the Act. A bare perusal of the section shows that it is illustrative of the aggregate of the amounts of purchases and parts of purchases actually made ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ourable Supreme Court rendered in the case of Hindustan Sugar Mills Ltd. v. State of Rajasthan [1979] 43 STC 13. It has, thus, been submitted that the price charged by the seller of the agricultural produce like paddy or wheat through the commission agent has to be regarded as consideration and, therefore, incidental charges like weighment, stitching charges, expenses incurred on stitching jute thread, printing of the gunny bags, dammi and carriage, etc., would not form part thereof. Mr. Piyush Kant Jain, learned Additional Advocate-General, has, however, submitted that the vires of the definition of expression turnover given in section 2(i) of the Act, has not been challenged and according to the definition of expression turnover all sums charged by the dealer in respect of the goods at the time of or before the delivery, have to be regarded as a part of the total turnover and would not qualify for exclusion. Mr. Jain has vehemently argued that the determinable event is not the final bidding price to be paid by the dealer but any sum paid for anything done by the dealer in respect of the goods either at the time of or before delivery has to be included. According to the l ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... at questions Nos. 2 and 3 would not survive for adjudication as these questions have been answered by the honourable Supreme Court against the dealer-FCI in the case of Food Corporation of India v. State of Kerala [1997] 105 STC 4. Mr. Jain, learned State counsel has further submitted that the foodgrains procured by the dealer-FCI under levy order have to be regarded as a sale/ purchase transaction, which is exigible to tax as is clear from the reading of the aforesaid judgment of the honourable Supreme Court. According to the learned counsel the contrary view taken by this court in the case of Food Corporation of India v. State of Haryana [1987] 66 STC 7, was reversed by the honourable Supreme Court where it was held that on account of element of compulsion involved, the character of the transaction was not to be considered as sale. Therefore, he has contended that question No. 2 is covered against the dealer-FCI and has to be decided in favour of the Revenue. With regard to question No. 3 he has placed reliance on para 36 of the judgment of the honourable Supreme Court in the case of Food Corporation of India v. State of Kerala [1997] 105 STC 4 and has argued that the gunny ba ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... er-FCI. With regard to question No. 3 it would be profitable to extract para 36 of the judgment of the honourable Supreme Court rendered in the case of Food Corporation of India v. State of Kerala [1997] 105 STC 4 which reads thus (at page 28 of STC): 36. We have noticed in the course of the discussion that the Punjab and Haryana High Court has taken a different view and we have also held that the view taken by the Punjab and Haryana High Court was not the correct one. The State of Punjab aggrieved by the decision of the Punjab and Haryana High Court has filed appeals. Our discussion concerning the six propositions would equally apply to the appeals filed by the State of Punjab and one additional point arises in the appeals filed by the State of Punjab, namely, whether the gunny bags used in the course of the disputed transactions as a packing material are liable to be included in the taxable turnover or not? The Punjab and Haryana High Court held that the gunny bags in these transactions are not exigible to tax as the contents, namely, rice/ paddy are not liable to tax as there was no sale at all. An additional ground given by the High Court was that there was nothing ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... market fee is to be paid needs to be considered and once it is held that the buyer has an obligation to pay the market fee and it is the duty of the seller to deposit the market fee on behalf of the buyer and, therefore, to realise it from the buyer, it is not the legal obligation of the seller to pay market fee on such a transaction and thus the amount of market fee cannot be treated as part of the sale consideration. Similar is the position in the present case as per law prevailing. 6.. The above position was examined by this court in State of Punjab v. Guranditta Mal Shauti Prakash [2004] 136 STC 12 (SC); [2004] 3 RC 20; [2004] 5 SCC 791 and relying on the decision in Anand Swarup's case [1980] 46 STC 477 (SC); [1980] 4 SCC 451, it was held that there was no obligation on the part of the seller to pay the market fee since it is the duty of the buyer to pay the same and the seller can realise it from the buyer. The inevitable conclusion, therefore, is that there was no liability to pay sales tax on the element of market fee. We have confronted the learned State counsel with the aforesaid observations of the honourable Supreme Court and he could not give any satisfactor ..... X X X X Extracts X X X X X X X X Extracts X X X X
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