Madras High Court
The National Co.Operative vs The State Of Tamil Nadu on 19 March, 2018
Author: S.Manikumar
Bench: S.Manikumar, V.Bhavani Subbaroyan
IN THE HIGH COURT OF JUDICATURE AT MADRAS DATED: 19.03.2018 CORAM: THE HON'BLE MR.JUSTICE S.MANIKUMAR AND THE HONOURABLE MRS.JUSTICE V.BHAVANI SUBBAROYAN T.C.(R).Nos.50 and 51 of 2018 C.M.P.No.5932 of 2018 The National Co.operative Sugar Mills Ltd., Alanganallur. .. Petitioner in both TCR's Vs. The State of Tamil Nadu, rep., by the Deputy Commercial Tax Officer, Thirumangalam. .. Respondent in both TCR's Prayer: Tax Case Revisions are filed under Section 38 (1) of Tamil Nadu General Sales Tax Act, 1959, to revise the order dated 27.02.1990, made in M.T.A.Nos.231 and 232 of 1989 on the file of the Sales Tax Appellate Tribunal (Additional Bench), Madurai. For Petitioners : Mr.N.Inbarajan COMMON ORDER
(Order of this Court was made by S.MANIKUMAR, J.) Tax Case Revisions are filed to revise the order, dated 27.02.1990, made in M.T.A.Nos.231 and 232 of 1989, on the file of the Sales Tax Appellate Tribunal (Additional Bench), Madurai.
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), the freight charges would be part of turnover. It was also stated that the petitioners had agreed to give subsidy beyond 40 Kms. It distinguished the judgment in 38 STC 238 and purported to follow 60 STC 113 (Kallakurichi Co-operative Sugar Mills Ltd v. State of Tamil Nadu). Hence the revision.
3. The revision petitioner has been filed the instant Tax Case Revision, on the following grounds are that, i. The Sales Tax Appellate Tribunal should have followed the judgment of the Hon'ble High Court in 38 STC 238 (State of Tamil Nadu v. Madurantakam Co-operative Sugar Mills (Mad)).
ii. The Sales Tax Appellate Tribunal failed to appreciate that 60 STC 113 (Kallakurichi Co-operative Sugar Mills Ltd. v. State of Tamil Nadu) did not relate to a case where the mill itself took delivery at the filed and transported the cane as agreed with the grower on its own expenses.
iii. The Sales Tax Appellate Tribunal failed to appreciate that the subject matter of the dispute related only to transport charges incurred by the petitioners when paid to their contractor, which was absorbed by the petitioners without being recovered from the growers. In this view, the Tribunal misdirected itself in thinking that the transport charges for transport within 40 Kms. recovered from the growers was the subject matter of the dispute.
iv. The Sales Tax Appellate Tribunal failed to appreciate that on a proper construction Rule 6(c) transport charges even if absorbed by the petitioners, being post purchase expenditure, will not be includible as turnover.
v. The Sales Tax Appellate Tribunal failed to appreciate that transport charges by itself cannot be taxed as long as it was distinctly permitted.
4. Before the Appellate Authority, the revision petitioner has contended that the assessment cannot be made on the turnover plant subsidy according the decision of the Madurai Tribunal in MTA No.555 of 1980 dated 15-5-1981 and therefore, the assessment made on a turnover of Rs.5,83,302.14 relating to plant end development subsidy has to be deleted, in respect of assessment year 1984-85.
5. The revision petitioner has further contended that relying on the decision of the this Court reported in 40 STC 73, the appellants contended that transport charges incurred is not liable to tax under purchase turnover. Based on this decision, the transport subsidy in question 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) Rs.3,39,394.53 being transport subsidy added with the purchase turnover of sugar cane in the assessment year 1984-85.
ii) Rs.5,83,302.14 being the addition of plant % development Rs.9,22,696.67 subsidy made in the same assessment year 1984-85
iii) Rs.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 is bound to follow the above decision of the Tribunal cited. Respectively following the above decisions of the Tribunal, I order deletion of assessment made on the turnover of Rs.5,83,302.14 at 12% made by the assessing officer as the same is not includible in the purchase turnover of sugar cane for the assessment year 1984-85.
8. However in respect of inclusion of the turnover of transport subsidy it is seen that Madras High Court in TC 101 & 102 dated 4-1-84 in the case of Kallakurichi Co-operative Sugar Mills Limited and in another case reported in 38 STC 238 in the case of Tvl. Madurantakam Co-Operative Sugar Mills, have held that transport charges are not deductable from the taxable turnover as this will form part of purchase price. Further decision of the Madras High Court in 40 STC 73 referred by the Authorised Representative completely defers from the issue on hand. In that case, the forest coupe products such as timber, etc. were purchased from the Forest Department and hence the transport charges incurred by the assessee in that case could not be taken as taxable on purchase of timber. But, in the present case, the appellants have stated that sugar cane from the agriculturise is purchased and transport subsidy is paid by the appellants to the agriculturists for the goods brought in beyond 40 kilometers and the transport charges for the goods brought in within 40 kilometers by the agriculturists are borne by the appellant in the form of transport charges subsidy, thus it is clear that the issue and hand completely differences from the issue mentioned in the case reported in 40 STC 73. Further, Madras Tribunal in a similar issue in A 1281/82 dated 20-5-83 in the case of Tvl. Tirupattur Co-op. Sugar Mills Kothandapatti, North Arcot District have upheld the inclusion of transport charge and transport subsidy. Therefore respectfully following the above decisions or the Madras High Court cited by the Departments Representative the assessment made on the turnover of transport subsidy is upheld.
9. The Tribunal framed the following points for consideration, The point for consideration in MTA 231/89 & 232/89 is,
1. Whether the transport subsidy is part of the purchase price liable to be taxed.
The point for consideration in MTMP 42/90 is
1. Whether the plant developmental subsidy given by the sugar mills to the sugar cane growers 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 from the filed of these sugar cane growers to the mill and finally such payment is set of by paying a transport subsidy and thereby the transport charges paid for the difference beyond 40 kgs was adjusted at the time of final settlement between the appellant and the case growers. The disputed turnover of Rs.14,023/- and Rs.3,39,394.67 relate to such transport subsidies. All the above facts are admitted as correct by both the sides.
The contention of the appellant is that inasmuch as the freight charges were paid directly to the third party lorry owners for having transported the sugar cane from the filed to the mill, the freight charges so paid should not be considered as part of the price for the sugar case and therefore the transport charges so paid is not liable to be taxed. In support of his contention, the learned authorised representative has relied on a decision of our High Court in 38 STC 238. He would further contend that the appellant is not liable to pay anything more than the price fixed by the Central Government under the Sugarcane Control Order 1966 and therefore the transport subsidies paid to the sugar cane growers over and above the price so fixed is not liable to be tax as part of the purchase price of sugar cane. In support this contention, he has relied on a recent decision of our High Court reported in 9 SISTC 119.
Sugarcane is a Schedule goods liable to be taxed at the point of last purchases in the State as per entry 62 of First Schedule. The appellant being a sugar mill is the last purchaser of sugarcane. It is not in dispute that the point of purchase of sugarcane by the appellant is the mill premises or sugar factory and not the sugar cane filed. Our High Court in 38 STC 238 has held that Rule 6(e)(i) of TNGST Rules is not applicable to a purchasing dealer and the dealer who is liable to pay tax for this sales alone is entitled to deduct the freight charges from the taxable turnover. Therefore the appellants are not entitled to deduct the transport subsidies given for the transport of the sugarcane from the filed to the mill under the above said rule.
The Full Bench of our Supreme Court has held in Dyer Meakin Broweries Ltd. Vs. State of Kerala reported in 26 STC 248 that Rule 9(f) of Kerala General Sales Tax Rules, 1963 seeks to exclude only those charges which are incurred either expressly or by necessary implication 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 included as the purchase turnover of the sugar cane by the appellant. In fact the very claim of exemption on the freight charges by virtue of Rule 6(c)(i) shows that the appellant himself has accepted the freight charges come within the definition of 'turnover' as provided under the Act.
It is also to be noted that in case where the sugar cane filed is situated within 40 kms from the sugar mill, the appellant had deducted freight charges from the price of the sugar cane sand paid only the balance to the sugarcane growers. Thus it is clear that the appellant treated the freight charges as part of the price of sugar cane. Simply because, the appellant had paid the freight charges to the lorry owners, such freight charges never cease to be part of the price amount. It is to be noted that even in the case of sugar cane growers whose filed is within 40 kms the appellant had paid the freight charges to the lorry owners. Simply because, sugarcane filed is situated beyond the 40 kms from the sugar mill the payment of freight charges deem not take any other character to remain as part of the price amount. It is true that our High Court has held in 38 STC 238 that the amount paid to the third party lorry owners shall not form part of the purchase amount. But as already stated, the appellant's Sugar Mills itself has treated the freight charges so paid to the lorry owners as part of the price of sugar cane where the sugar cane filed is within 40 kms from the sugar mills. Further our High Court has held in a latter decision Kallakurichy Co-operative Sugar Mills Ltd., and another Vs. The State of Tamil Nadu reported in 60 STC 113 after referring to the decision of our High Court in 38 STC 238 that the freight charges paid by the sugar mills for having transported sugar canes from the filed to the sugar mills liable to be taxed as part of the price of the sugar cane purchased by the sugar mills.
We have already found that the purchase price of sugar cane includes the freight charges also as per the definition of 'turnover' provided under Section 2(r) of the Act. The appellant has also admitted that the freight charges from part of purchase price where the sugar cane filed is situated within 40 kms from sugar mills.
Once the freight charges become part of the turnover as per Section 2(r) of the Act, then it becomes a taxable turnover as per Section 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.
In the result, the appeals are dismissed.
Point: 1 in MTMP 42/90 in MTA 232/89 The disputed turnover of Rs.5,83,302/- relates to early planting and variety subsidy paid by the appellant to various cane growers as on incentive to grow more sugar cane so as to keep the sugar factory running throughout the year. It is not disputed that the said subsidy amounts were paid by the appellant to some of the ryots who planted in the specified months the particular variety of sugar cane with reference to accreage of such planting at a rate per acre fixed by the Director of Sugar. Thus the payments of these subsidies had nothing to do either with the quantity of sugar cane as that were supplied by the riots or with the price of the sugar supplied by them. This Tribunal has also held in MTA 554/80 & 555/80 dated 14-5-81 that such subsidies do not form part of purchase price of sugarcane in a particular month or period and therefore levy of purchase tax on these subsidies is not sustainable. Therefore we hold that the learned Appellate Assistant Commissioner has rightly deleted the above said subsidies. We decide this point accordingly against the Revenue.
In the result, both the appeals (MTA 231/89 & 232/89) and the Enhancement petition (MTMP 42/90 in MTA 232/89) are dismissed.
10. In Chengalvarayan Co-operative Sugar Mills Ltd, Periyasevalai Vs. State of Tamil Nadu represented by the Deputy Commercial Officer, Full Additional Charge, Thirukoilur, reported in 1997 (105) STC 497 (Mad) a Hon'ble Full Bench of this Court, while testing the validity of Rule 6(c) of the Tamil Nadu General Sales Tax Rules, 1959, considered several issues, namely, (1) Are the provisions of Section 2(r) and Explanation (2)(ii) appended thereto of the TNGST Act ultra vires of entry 54 - List II of the Seventh Schedule to the Constitution of India ?
(2) Is the provision of rule 6(c) of the Tamil Nadu General Sales Tax Rules, 1959 (for short, "TNGST Rules") ultra vires and violative of Article 14 of the Constitution of India, when especially the classification, according to the said rule, of "turnover chargeable on sale" and "turnover chargeable on purchase" cannot at all be stated to have rationale or reasonable nexus to the object to be achieved ?
(3) Is "planting or varietal subsidy" to be treated as consideration for the "sale" and "purchase" of 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 Co-operative Sugar Mills [1976] 38 STC 238 (Mad.) recorded a finding that the transport subsidy charges paid by the assessees-sugar mills to third party lorry owners do not form part of purchase turnover, since they are not connected with pre-purchase expenses and consequently, the claim, as respects the transport subsidy made by the assessees-sugar mills was allowed. It cannot be said that the Revenue is not aggrieved by such an order. But, nonetheless, it did not opt to file any revision. The fact that the revenue filed no such revision is of no consequence, on the facts and in the circumstances of the case. Pertinent further it is to mention at this juncture that Mr. C. Natarajan, learned Senior Counsel, appears for the petitioner, in the tax cases and the petitioner in the writ petitions. As already stated, the writ petitions had been filed in a comprehensive fashion canvassing many a question, inclusive of the transport subsidy, besides drawing attention of this Court to the conflicting views of this Court in that regard, exactly at the time when the tax cases were listed for hearing, of course, with the laudable object of settling various questions, obviously with a request for the reference of the tax cases and the writ petitions to a larger Bench for an authoritative pronouncement, which in fact, is made as anticipated. Elaborate arguments of learned Senior Counsel appearing for the petitioners in tax cases and learned Additional Government Pleader (Taxes) were heard on all questions, inclusive of the question respecting "transport subsidy". Such being the case it cannot be stated that any prejudice could be or had been caused to the petitioners in the present tax cases in reopening the question relatable to the "transport subsidy" in respect of which the Tribunal passed an order favourable to the petitioners herein, notwithstanding the fact that no revision had been filed by the Revenue aggrieved by such an order of the Tribunal. In the light of the view that we have taken, the decision in Madurantakam Co-operative Sugar Mills [1976] 38 STC 238 (Mad.), is no longer a good law and it is accordingly overruled. The correct legal position is reflected by the decision in Kallakurichi Co-operative Sugar Mills Limited [1985] 60 STC 113 (Mad.) the finding of the Tribunal in its common order in respect of the present Tax Case Nos. 474 to 478 relatable to "transport 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 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 transportation of the sugarcane to the factory site - whether incurred by the grower initially and paid by the sugar mills subsequently or incurred by the sugar mills and shown separately in the invoices - by adopting whatever procedure reflecting those amounts in the accounts - shall form part of the price includible in the purchase turnover as such transportation alone makes the passing of property in the sugarcane sold by the grower to the assessee-mills complete".
11. This view was affirmed by this Court in E.I.D. Parry's case (supra). One of the questions which this Court had to consider was whether the transport subsidy paid by the sugar mills to third party lorry owners for transporting sugar cane pursuant to the State Government's direction can be aggregated with the price of sugar cane and included in the turnover of the mills under the Act. This Court noted that in respect of sugarcane grown in reserved areas, the occupier of the factory is required to enter into an agreement with the sugarcane grower to purchase sugarcane in the form prescribed under the Madras Sugar Factories Control Act 1949 and the Rules framed thereunder. It was found that the prescribed form of agreement disclosed that sugarcane had to be delivered by the grower at the factory premises.
12. After considering earlier authorities, this Court upheld the view of the Full Bench of the Madras High Court and concluded:-
"What transpires from the above case-law is that the amounts paid by way of consideration by the purchaser to the seller of goods in pursuance of the contract of sale can legitimately be regarded as purchase price while calculating the turnover for the purposes of sales tax legislation. What can legitimately be brought to sales tax or purchase tax is the aggregation of the consideration for the transfer of property. All the payments should have been made pursuant to the contract of sale and not dehors it. Any amount paid as ex gratia payment or as an advance cannot be the component of the purchase price and therefore cannot legitimately be included in the turnover of the purchasing dealer. Whether one of the components of the purchase price goes to the coffers of the seller or not will not cease 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:-
"For the same reasons we hold that the transport subsidy was a part of the consideration for which sugarcane was sold by the sugarcane-growers to the appellants. Though the agreements 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. Though payments were made at the instance of the Government of Tamil Nadu they also became a part of the implied agreement between the appellants and the sugarcane-growers. They were not post-sale expenses. Those amounts were paid to ensure scheduled delivery of sugarcane. The sale of sugarcane became complete only thereafter. Those payments can be regarded either as payments made on behalf of the sugarcane- growers or payments made in modification or variation of the earlier agreements entered into by the sugarcane-growers for selling sugarcane. In either case they could legitimately be regarded as the components of the sale price as the sellers would have otherwise included those amounts in the sale price."
(Emphasis added)
14. It is of significance this view was expressed despite the fact that the State Governments directive was not incorporated in that particular agreement for purchase of sugar cane. The principles would therefore a fortiori be applicable to the present case where the directive formed part of the agreement. The issue raised by the appellant before us has thus been answered in the negative by this Court in E.I.D. Parry which view we respectfully adopt.
15. The decision relied upon by the appellants namely Commissioner of Sales Tax, U.P. V/s. M/s. Rai Bharat Das & Bros., does not support the appellant. In fact the Court found in that case that the costs of freight or delivery were included in the sale price.
16. The assessment orders of the Department in respect of the earlier years also relied on by the appellants were based on the earlier decision of the High Court in State of Tamil Nadu V/s. Madhurantakam Cooperative Sugar Mills (supra) which was specifically overruled by the Full Bench in Chengalvarayan's case.
17. The findings of the Tribunal sought to be relied upon by the appellant related to a previous stage of proceedings. The order of 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 consideration for the purchase of the sugar cane by the appellant from the sugar cane growers.
19. In the circumstances aforesaid we are of the view that the appeals must be and are hereby dismissed with costs.
13. In the light of the above decisions, there is no merit in the contention of the revision petitioner. Hence, the Tax Case Revisions are dismissed. No Costs. Consequently, the connected civil miscellaneous petition is closed.
[S.M.K., J.] [V.B.S., J.]
19.03.2018
Index : Yes
Internet : Yes
dm/skm
S.MANIKUMAR, J.
AND
V.BHAVANI SUBBAROYAN, J.
skm/dm
T.C.(R).Nos.50 and 51 of 2018
19.03.2018