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TMI Blog1991 (7) TMI 366X X X X Extracts X X X X X X X X Extracts X X X X ..... his subsidy paid to the cane growers can be treated as forming part of purchase turnover of sugarcane. The assessing authority found that as long as the amount was paid in lieu of sugarcane supplied by the cane growers to the assessee, the subsidy amount is includible in the taxable turnover. A notice was therefore issued to the assessee and after considering their objections the assessing authority came to the conclusion that the payment of the subsidy had nexus to the supply of sugarcane. It was a payment to the sugarcane growers in addition to the price of sugarcane. Accordingly, the said sum of ₹ 1,59,305.48 was included in the purchase turnover of sugarcane and tax at 12 per cent under entry 62 of the First Schedule to the Tamil ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... evenue is in revision before us. 3.. Reliance is placed on Hiranyakeshi Sahakari Sakkare Karkhane Niyamit v. State of Karnataka [1978] 42 STC 184 (Kar). In that case the assessees had paid certain amounts to the sugarcane suppliers as khodki charges , for the purpose of keeping the land on which, sugarcane had been planted in good condition. In that case it was held that the khodki charges had been in fact paid as part of the consideration for the sugarcane supplied to the assessees by the growers. It was therefore included in the taxable turnover of the assessee. The High Court went on to say that the point of time at which such payment was made or the purpose for which the amount had been used by the grower would be immaterial as lo ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ne growers is equal to the price fixed under the statute plus subsidy amount which is retained by the cane grower. Therefore the sale price of the product cannot be less than or more than the above price received by the cane grower. Necessarily they have to be equal. It follows therefore that the sale price includes the subsidy payment and therefore rightly forms part of the purchase turnover. 4.. Reliance is also placed on [1985] 60 STC 113 (Mad.) (Kallakurichi Co-operative Sugar Mills Limited v. State of Tamil Nadu). In that case the sugarcane grower should deliver the sugarcane at the mill or factory premises for the price fixed by the Government. Certain transport charges had been initially paid by the assessees and such transport ch ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... hat case apart from statutory price fixed by the Government of India under clause 3 of the Sugarcane Control Order, 1966, the Director of Sugars had instructed the assessees to pay a certain higher amount as the price of sugarcane to the growers. Such additional payment as per the directions of the Director of Sugar was not a voluntary payment of the assessee. It was found that the assessees had paid the extra amount by way of advance and they had a right, in law, to recover such excess payment. It was held that there was no implicit agreement between the cane grower and the manufacturer to pay a price higher than the minimum statutory price. It was in those circumstances that the Division Bench of this Court held that the extra amount was ..... X X X X Extracts X X X X X X X X Extracts X X X X
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