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TMI Blog2020 (2) TMI 474X X X X Extracts X X X X X X X X Extracts X X X X ..... ments between the parties provided for delivery by the sugarcane growers at the factory gate and though the transport charges paid by the appellants were not to the sugarcane growers but to third party lorry owners , they were made for securing regular supply of sugarcane as per the requirements. Since the view of the learned Sales Tax Appellate Tribunal is in consonance with the decision of the Full Bench of this Court and that of the Hon'ble Supreme Court, we have no reason to take a different view as there is no distinction on facts in the present case and the purchase of sugar cane by the Assessee Sugar Mill during the period in question also happened in a similar way and therefore, the mere bifurcation of prices in the invoices to the extent of transport charges or plantation subsidy will not materially affect the aforesaid prevailing legal position. The Tribunal is justified in imposing the purchase tax on the Assessee Sugar Mill on the entire purchase price including the components of price for the sugar cane, plantation subsidy and transportation charges paid by the Assessee for transportation of sugar cane from the sugarcane fields to the factory premises of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the desired and improved variety of sugarcane and that too in the months suggested by the appellants so as to ensure stagger supply of sugarcane as per the crushing schedule. The object of the planting subsidy was to obtain the desired variety and quality of sugarcane at the time required by the appellants. It is also significant to note that as a matter of fact the planting subsidy was given by the appellants to the cane growers at the time of delivery of sugarcane by them. Though the appellants had described the payments by way of planting subsidy as deferred payments that cannot conceal the real nature of the transaction between the appellants and the cane growers. The planting subsidy was given by the appellants to the cane growers not by way of agrarian reform or a social welfare measure. The appellants had given planting subsidy as purchasers of sugarcane and as a part of the consideration for which the sugarcane was ultimately purchased by them. As rightly pointed out by the Madras High Court in State of Tamil Nadu v. National Co- operative Sugar Mills Ltd., (1992) 86 STC 22 giving of planting subsidy earlier and supply of sugarcane later were closely linked. The ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e of the word subsidy in the directive dated 12.9.1985 which was payable on delivery at the factory gate would also support the view that the transport charges were otherwise bearable by the cane growers. 9. 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. State of Tamil Nadu, ((1997) 105 STC 497 (Mad)). The Court while affirming the view expressed in Kallakurichi Co operative Sugar Mills Ltd. vs. State of Tamil Nadu ((1985) 60 STC 113 (Mad.)) and overruling the decision in State of Tamil Nadu v. Madurantakam Cooperative Sugar Mills ((1976) 38 STC 73 (Mad.)) said: (STC p.560, para 58) (I) if subsidy -- whatever name or nomenclature, it may assume and whether paid or payable prior to or subsequent to the entering into contract of sale -- is linked to the supply of sugarcane, such subsidy and expenses incurred for the transport ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d 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) 11. 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 judgment where this Court said: (SCC p 338) For the same reasons we hold that the transport subsidy was a part of the consideration for which sugar ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rescribed form for purchase of all the sugarcane offered by the grower . The Sugarcane (Control) Order, 1966 fixed the price for sugarcane delivered to factory at the gate of the factory. The sugar mill used to provide incentive to sugarcane growers as subsidy for earlier planting of particular variety of seed. It is called planting subsidy. The dealer-appellants had also paid planting subsidy to their ryots as incentive and they did not include these amounts in their Returns. The grower of sugarcane had to bear the transport charges for 40 km/30 km as the case may be and the sugar mill under administrative instructions of the Government paid the excess transport charges for the distance beyond 40 km/30 km. This is called transport subsidy . The dealer-appellants had also paid such transport subsidy to their ryots and the dealer- appellants did not include these amounts in the purchase turnover in their Returns . Apart from the above, the dealerappellants had also claimed exemption on the transport charges paid to the third party lorry owners for the transport of sugarcane from the field of ryots to the factory premises. The dealer-appellants deducted such transport charges from ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... party lorry owners for transporting the sugarcane to the factory site was not to be included in the taxable turnover of the sugar mill. ... ... ... 11. In the light of the above catena of judicial decisions, we have considered the contention of the learned counsel that the Hon'ble High Court of Madras itself approved the findings of this Tribunal that the transport charges paid to third party lorry owners is not includible in purchase turnover of sugarcane in Tax Case Nos.1742, 1739 and 1740 of 2008 dated 19.8.2010. In this regard, it is to be noted that the assessment years involved are 1975- 76 and 1976-77. Actually, this Tribunal had passed the above order on 26.41980 by following the case law reported in 38 STC 238 (Madurantakam Co-operative Sugar Mills case) which was rendered by the Hon'ble High Court of Madras on 17.2.1976. Subsequently the same Hon'ble Madras High Court on 4.1.1984 in the Kallakurichi Co-operative Sugar Mills Limited case reported in 60 STC 113, held that the contractual obligation of the sugarcane growers for delivering the sugarcane at the mill or factory premises was not departed from or varied even in practice. Further, the H ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ;ble High Court of Madras reported in 38 STC 238 was reversed. Further, the dealer-appellants had not raised any objection regarding transport and planting subsidy. In view of the above facts and circumstances of the case and case laws relied on, we are of the considered view that the planting subsidy, transport subsidy and transport charges paid to third party lorry owners are to be included to the purchase price of sugarcane and therefore we are not inclined to interfere with the order of the learned first appellate authority sustaining the assessment on the above payments. 13. In this regard, it is to be noted that in respect of assessment year 1988-89 (CTA No.140/02), the learned first appellate authority had directed the Assessing Authority to assess the turnover of ₹ 1,01,82,689.46 and ₹ 87,156.46 on which exemption claimed under heading transport charge paid to third party lorry owners. In pursuance of the order of the learned Appellate Deputy Commissioner, the Assessing Authority issued a notice to the dealer-appellants proposing levy of tax on the turnover of ₹ 1,02,69,845/- which is filed at page Nos.685 to 689 of assessment file. But it is not ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sputed the levy of tax on the above payments continuously. Further there is no suppression of any turnover out of accounts and there is only claim of exemption which was later denied and disallowed by the Assessing Authority. In of the above, we are of the considered view that no penalty can be levied for the difference of tax due arisen for non-payment of tax on which exemption claimed. However, the Assessing Authority is at liberty to levy interest u/s. 24(3) of the Act from the due date. With the above observation, we delete the penalty levied by the Assessing Authority to the tune of ₹ 63,34,292/- in respect of the assessment year 1993- 94. In the result, the appeals in CTA Nos.138/02, 140/02, 141/02, 194/02, 195/02, 315/02 316/02 and 332/02 stand DISMISSED and the APPEAL in cta 58/09 stands MODIFIED with a direction to the Assessing Authority to impose interest u/s.24(3) of the Act from the due date for belated payment of tax due on the turnovers of ₹ 59,11,518/-, ₹ 1,86,97,256/- and ₹ 3,25,88,998/- . 5. Since the view of the learned Sales Tax Appellate Tribunal is in consonance with the decision of the Full Bench of this Court and that of ..... X X X X Extracts X X X X X X X X Extracts X X X X
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