TaxTMI 
TaxTMI 
1994 (11) TMI 350
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....der section 5(3)(a) of the Act to pay the tax in respect of the sale of coffee by them to the Coffee Board. It also held that the Board was liable to pay the "purchase tax" under section 6 of the Act. But according to the High Court, the Board was authorised in law to pay the tax which it is liable to pay to the State Government, out of the pool fund. On that finding, the writ petitions, filed on behalf of the appellants, were dismissed. Section 5(3)(a) of the Act provides that the tax under the Act shall be levied in the case of sale of goods mentioned in column No. 2 of the Second Schedule to that Act by the first or the earliest of the successive dealers in the State who is liable to tax under the said section, on the taxable turnover of sales of such dealer in each year relating to such goods. Coffee is included in entry 43 of the Second Schedule in the Act. The expression "dealer" has been defined in section 2(k) of the Act. The relevant portion of the definition along with exception is as follows: "2(k) 'dealer' means any person who carries on the business of buying, selling, supplying or distributing goods, directly or otherwise, whether for cash or for deferred pa....
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.... have been allotted to estates, all coffee produced by the estate shall be delivered to the Board for inclusion in the surplus pool by the owner of the estate or by the curing establishment receiving the coffee from the estate: Provided that where no internal sale quotas have been allotted to estates, the Chairman may allow the owner of any estate to retain with himself for purposes of consumption by his family and for purposes of seed, such quantity of coffee as the Chairman may think reasonable: Provided further that where the Central Government is satisfied that it is not practicable for any class of owners producing coffee in any specified area to comply with the provisions of this sub-section on account of the small quantity of coffee produced by them or on account of their estates being situated in a remote locality, the Central Government may, by notification in the Official Gazette exempt such class of owners from the provisions of this sub-section. (2) Delivery shall be made to the Board in such places (at such times) and in such manner as the Board may direct, and such directions may provide for partial delivery to the surplus pool at any time whether or not at that ti....
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....nbsp; (c) all fees levied and collected by the Board under this Act. (2) The general fund shall be applied- (a) to meet the expenses of the Board; (b) to meet the cost of such measures as the Board may consider advisable to undertake for promoting agricultural and technological research in the interest of the coffee industry in India; (c) for making such grants to coffee estates or for meeting the cost of such other assistance to coffee estates as the Board may think necessary for the development of such estates; (d) to meet the cost of such measures as the Board considers advisable to undertake for promoting the sale and increasing the consumption in India and elsewhere of coffee produced in India; and (e) to meet the expenses for securing better working conditions and the provision and improvement of amenities and incentives for workers." Section 32 is as follows: "32.(1) To the pool fund shall be credited all sums realised by sales by the Board of coffee from the surplus pool. (2) Subject to the provisions of sub-section (4) of section 13, the pool fund shall be applied only to- (a) the making to registered owners of estates of payments proportionate to the valu....
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.... the appellants that the payment of the "purchase tax" should be made from the general fund, as maintained under section 31 of the Act should not be accepted because the said general fund does not have capacity to pay the "purchase tax" after meeting the general expenses of the Board under different heads mentioned in sub-section (2) of section 31. In this connection, Dr. Singhvi, appearing for the said Board, referred to the different amounts received under the general fund in different years and the amounts paid as "purchase tax" during those years. But before this aspect is examined in detail, the appellants have to establish that in the process of making payment from the pool fund any right or interest of the growers like appellants were being affected. We fail to appreciate as to how the appellants are concerned with the pool fund. Any balance amount left in the pool fund shall not be available to the growers like appellants. Sub- section (6) of section 25 specifically says that after the coffee has been delivered for inclusion in the surplus pool, the registered owner whose coffee has been so delivered shall have no right in respect of such coffee except his right to receive....
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....Board, in the connected Writ Petition (Civil) No. 899 of 1990. It says: "47. The payments made to the growers for their coffees is always above the cost of production with a reasonable margin of profit as determined by cost studies regularly carried out by the cost accounts branch of the Ministry of Finance and/or by the Board. The reserve price fixed for the 'Pool Open Auction' is based on this minimum release price. For the export auctions the reserve price is based upon the prevailing international price as the export of coffee from the country has to be competitive in the international market and it cannot be made to depend only on the domestic cost of production. For over 20 years, the international price of coffee has been very much above the domestic cost of production although for the last about a year and half the price of several varieties of coffee in the international market have been less than the domestic cost of production. Pool payments declared by the Board is on the basis of per point (100 points = 50 kgs. of fair average quality plantation 'A' coffee). The value per point so declared has always been above the cost of production-in many years alm....