9911796707
TMI Blog2018 (4) TMI 650X X X X Extracts X X X X X X X X Extracts X X X X ..... 2. The Petitioner was assessed by the Deputy Commercial Tax Officer, Thirumangalam, vide orders, dated 27.02.1987 and 31.03.1987, for the respective assessment years 1984-85 and 1982-83, including transport subsidy paid for transport of sugarcane beyond 40 Kms and the same was accounted as cane development charges. The revisional assessment for 1982-83 and the original assessment for 1984-85 took the view that this was includiable. Besides, there was an addition relating to planting subsidy. The petitioner has preferred Appeal Nos.459 and 520 of 1987 before the Appellate Assistant Commissioner, who vide order, dated 28.02.1989, held that the planting subsidy cannot be taxed. With regard to transport subsidy, he purported to follow Tax Case Nos.101 and 102 dated 04.01.1984. In the further appeal under Section 36 of the Act, the Tribunal held the transport subsidy was includiable. It was stated that in respect of sugarcane within 40 Kms., the petitioners had deducted the freight charges and paid the balance. Where it was beyond 40 Kms., the petitioners absorbed the freight paid and expenses incurred by them to their own transport contractors. It held that in view of Section 2(r), ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... estion incurred by the appellant and fully borne by them, could not be included in the purchase turnover of sugar cane and assessed to tax. Further, such subsidy on which assessment made for the earlier years have been deleted by the Madurai Tribunal in MTA 554 and 555/80 dated 15-5-81. 6. The Appellate Authority considered the issues involved in both the appeals as hereunder:- i) ₹ 3,39,394.53 being transport subsidy added with the purchase turnover of sugar cane in the assessment year 1984-85. ii) ₹ 5,83,302.14 being the addition of plant % development ₹ 9,22,696.67 subsidy made in the same assessment year 1984-85 iii) ₹ 14,023.00 at 12% being the addition made towards sale of scrap and transport subsidy for the assessment year 1982-83 disputed by the appellants. 7. As rightly pointed out by the learned authorised representative, it is seen that Madurai Tribunal in MTA 554 and 555/80 dated 15-5-81 have deleted the assessment made on the turnover of planting and development subsidy and transport subsidy, the decision of the Tribunal has not been reversed by the higher judicial forums, so far and therefore the Assessing Officer ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ers is liable to be taxed Point I in both the appeals (MTA 231/89 232/89) The appellant, the National Co-Operative Sugar Mills Ltd., Alanganallur had entered into contract with cane growers for the purchase of sugar cane at an agreed price Normally to be fixed by the Central Government. As per the agreement between the appellant and cane growers, the letter have to deliver the sugar cane to the appellant at this mills premises. To facilitate quick and timely transport of the sugar from the filed to the mill it was also agreed that the appellant would make an arrangements for the transport of the sugar cane from the filed by sending its own transport vehicle or arranging some other lorries for the said purpose. If the distance from filed to the mills is within 40 kms. the transport charges will be deducted from the purchase price of the sugarcane at the time of finals settlement. The appellants has also agreed to pay the transport charges to be incurred by these sugar cane growers whose sugarcane filed is situated beyond 40 kgs. These transport charges were paid by the appellant in almost all the cases to the third party lorry owners who had transported the sugar cane f ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... mplication for and on behalf of the purchaser, after the sale, when the dealer undertakes to transport the goods and the same. It is not intended to exclude from the taxable turnover any component of the price, expenditure incurred by the dealer he had to incur before sake and to make the goods available to the intending customer at the place of sale. Rule 9(f) of the Kerala General Sales Tax Rules, 1963 is in all respect similar to rule 6(a) of the Tamil Nadu General Sales Tax Rules. It is to be noted that the expenditure viz. the transport charges have been incurred prior to the purchase of sugar cane at the mill premises. As per the distum of the Supreme Court in the case mentioned above such ore-sale expenses including the freight charges cannot be deducted under Rule 6(a) of the Tamil Nadu General Sales Tax Act. As per the definition of turnover as provided under Section 2(r) of the Act turnover means ......the aggregate amount for which the goods are bought . As we have already mentioned that the point of sale of sugar cane by they agriculturists is the sugar mill premises and any amount spent for the transport of the sugar cane to the factory has to be necessarily inclu ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tion 2(p) of the Act unless and until that turnover is deductable under Rule 6. Even though the learned Authorised Representative for the appellants has relied on a decision of our High Court in 9 STC 119 that no tax can be levied on any amount paid more than the price fixed under the Sugarcane Control Order 1966, no material was placed before us that the aggregate amount paid by the appellant to the sugar cane growers exceeds the price fixed under Sugarcane Control Order, 1966. Further the Sugar Cane Control Order only the minimum price is fixed. Therefore that control does not prohibit the sugar mill from paying voluntarily any amount over and above the price fixed under the said order. Admittedly the appellants himself has agreed to give the alleged transport a subsidy to the sugar cane growers whose sugar cane filed is situated beyond 40 kms from the sugar mills. The decision of our High Court referred above relates to certain payments made by the sugar mill owners on compulsion. Therefore that decision is not applicable to the facts of the case before us. For the above said reasons, we hold that the transport subsidy paid by the appellant is liable to be taxed. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... f sugarcane ? (4) Does it make any difference, if such subsidy is disbursed later at the time or after the supply of sugarcane ? (5) Are expenses incurred by the assessee - sugar mills, up to the supply to commercial nursery and cane subsidy to cane-growers on supplies from commercial nursery part of sugarcane paid/payable to cane-growers ? (6) Is supply of farm inputs at subsidised rates to be treated as consideration to the grower for supply of sugarcane ? (7) Are the transport charges incurred by the sugar mills excludable as not forming part and parcel of the price of the sugarcane sold by the sugarcane supplier ? (8) Is transport subsidy includible as consideration for the sale of sugarcane by the grower ? (9) Are development charges paid to the registering mill by the assessees-sugar mills, part of sugarcane price paid or payable to the cane growers ? 11. As regards freight charges and subsidy, points 7 and 8, the Hob'ble Full Bench at Paragraphs No. 59 and 60, held as follows:- 59. Pertinent it is to recapitulate at this juncture that the Tribunal in the present Tax Case Nos. 474 to 478 of 1993, following the ratio in Madurantakam ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ansport subsidy requires to be set aside and the same is accordingly set aside. 60. For the reasons as above Tax Case Nos. 474 to 478 of 1993 shall stand dismissed. However, as stated above, the transport subsidy is set aside. 12. In Ponni Sugars (Erode) Limited Vs. Deputy Commercial Tax Officer reported in 2005 (13) SCC 12 = AIR 2006 SC 496, the issue as regards transport subsidy has been considered by the Hon'ble Supreme Court as hereunder:- 10. The Full Bench of the Madras High Court was called upon to resolve a dispute between conflicting decisions of the High Court inter alia as to whether transport subsidies were includible in the purchase turnover of the sugar mills which were purchasing sugarcane under the Tamil Nadu General Sales tax Act, 1959 (referred to hereafter as the Act) in Chengalvarayan Co-operative Sugar Mills Ltd. V/s. State of Tamil Nadu, (supra). The Court while affirming the view expressed in Kallakurichi Co operative Sugar Mills Ltd. V/s. State of Tamil Nadu and overruling the decision in State of Tamil Nadu V/s. Madurantakam Cooperative Sugar Mills said :- if subsidy - whatever name or nomenclature, it may assume and whether paid ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ase to be so if it is necessary for completing the same. Thus the total amount of consideration for the purchase of goods would include the price strictly so called and also other amounts which are payable by the purchaser or which represent the expenses required for completing the sale as the seller would ordinarily include all of them in the price at which he would sell his goods. But if the sale price is fixed statutorily then the only obligation of the purchaser under the agreement would be to pay that price only and no other amount can be included in the purchase price even if the same is paid by the purchaser to the seller . (Emphasis supplied) 13. The appellant has relied on the last line of the quoted paragraph to contend that it showed that the statutory price fixed would be the only price includible in the taxable turnover of the purchasing sugar mill. This is not what the Court meant. In the preceding sentence it has been made clear that the total amount of consideration not only included the price but also other amounts which represent the expenses required for competing the sale. This is clear from the paragraph 21 of the Judgement where this Court said:- ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... f the Special Taxation Tribunal which was passed on an enhancement petition filed by the respondents and which was the subject matter of the writ petition before the High Court, had held against the assessee following the decision of the Full Bench of the Madras High Court in Chengalvarayan Co-operative Sugar Mills Ltd. V/s. State of Tamil Nadu (supra) which was affirmed by this Court in E.I.D. Parry's case. 18. The appellants then said that the decision of this Court in EID Parry (supra) was limited to the facts of that case and that this has been held by the Karnataka High Court in Ugar Sugar Works Ltd. V/s. Deputy Commission of Commercial Taxes. According to the Karnataka High Court, the decision in EID Parry did not lay down any principle but was confined to the facts of that case. It is unnecessary for us to consider whether the Karnataka High Court was correct in its interpretation of the decision in EID Parry because we are of the view that even on the basis of the opinion expressed in Ugar Sugar Works Ltd. (supra), EID Parry cannot be factually distinguished from the present case, as we have found as a matter of fact that the transport subsidy formed part of the co ..... X X X X Extracts X X X X X X X X Extracts X X X X
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