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TMI Blog2024 (9) TMI 611X X X X Extracts X X X X X X X X Extracts X X X X ..... account for that purpose can only be the payments mandated to be paid under the statute. Incidentally, the petitioner is under a statutory obligation to pay tax in respect of SAP from the year 2018 onwards and the petitioner confirms that such payments are being made. The impugned order is set aside - petition allowed. - Honourable Dr.Justice Anita Sumanth And Honourable Mr.Justice G. Arul Murugan For the Petitioner : Mr.N.Prasad (in both WPs) For the Respondents : Mr.V.Prashanth Kiran Government Advocate for R1, R3 R4, R3 Tribunal (in both WPs) COMMON ORDER DR. ANITA SUMANTH.,J. The petitioner is the Cheyyar Co-operative Sugar Mills Limited based in Vellore District (referred to hereinafter as petitioner ). It is aggrieved by an order of the Sales Tax Appellate Tribunal passed on 04.10.2007 and 23.11.2007 reversing the order of the Appellate Assistant Commissioner and restoring the assessment made in terms of the Tamil Nadu General Sales Tax Act 1959 (hereinafter referred to as Act ) relating to the periods 1995 96 and 1996 97. 2. The issue in question relates to the taxability or otherwise of the State Advisory Price (SAP) voluntarily paid by the petitioner mills to cane grower ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he minimum cane price fixed under Clause 3 and the additional cane price fixed under Clause 5- A, any sum paid by the purchaser to the grower as advance prior to fixation of the additional cane price under Clause 5-A cannot form part of the price of sugarcane. It was pointed out in para 7 that the State advice to the purchasers to pay certain amount in addition to the minimum price fixed under Clause 3 in anticipation of fixation of the additional cane price under Clause 5-A, does not have any statutory basis. The amount of advance was paid in anticipation of fixation of additional cane price under Clause 5-A, which means that in case the fixation under Clause 5-A was at a higher amount than the amount paid as advance, then the purchaser would have to pay the deficit amount. Similarly, when the amount of advance was in excess, the purchaser would be entitled to refund of the excess amount, irrespective of the fact that whether the refund was actually made or not. Any amount paid by way of advance towards a probable additional price to be worked out in accordance with the formula given in the 1966 Order could not be treated as price of sugarcane for the purpose of levy of sales tax. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nd the mills paid SAP based on the outcome of the deliberations in the tripartite meeting. 12. In this context, the findings by the Sales Tax Appellate Tribunal, in the case of Ambur Cooperative Sugar Mills in STA 1561 of 2002 batch (order dated 03.09.2007) assume relevance. The STAT notes at paragraph 9 (internal page 7 of the order), the submission of the State that there was a meeting conducted for the purpose of fixation of SAP on 04.11.1995. 13. However, the minutes of that meeting that had been produced by the representative of the Commercial taxes department, revealed that the sugar mills had not been represented and hence the meeting was not a tripartite meeting. Incidentally, the present Petitioner is also situated in Vellore District and it is an admitted position that it had not participated in the tripartite meeting for fixation of price. 14. This confirms the factual position that there had been no tripartite meeting held in 1995. The fact remains however that the petitioner had voluntarily paid the SAP to the cane growers that year. In Thiru Arooran Sugars Ltd v Deputy Commercial Tax Officer, Mannargudi and others (1978) 71 STC 444, that assessee, also a sugar manufac ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... dditional cane price under Clause 5-A, does not have any statutory basis. The amount paid as advance under the State advice also does not have any contractual basis since this was not paid as a result of an agreement between the grower and the purchaser. The amount of advance was paid in anticipation of fixation of the additional cane price under Clause 5-A which means that in case the fixation under Clause 5-A was at a higher amount than the amount paid as advance then the purchaser would have to pay the deficit amount. Similarly, when the amount of advance was in excess, the purchaser would be entitled to refund of the excess amount, irrespective of the fact whether the refund was actually made or not. For the purpose of determining the price of sugar-cane for computation of the purchase tax, the only significant amount is the aggregate of the minimum price fixed under Clause 3 and the additional cane price fixed under Clause 5-A, unless a higher price is paid to the grower by agreement between the purchaser and grower. It was argued by learned counsel for the State that the higher price inclusive of the excess amount included in the advance paid on State advice is deemed to have ..... X X X X Extracts X X X X X X X X Extracts X X X X
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