TaxTMI 
TaxTMI 
TaxTMI 
1996 (2) TMI 408
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....nbsp; F.S. Nariman and R.F. Nariman, Senior Advocates (P.H. Parekh and E.R. Kumar, Advocates with them), for some respondents in the appeals from Tamil Nadu. A.K. Ganguli, Senior Advocate (A. Mariarputham, Ajay Kapur and Ms.. Aruna Mathur, Advocates, with him), for the appellant, State of Tamil Nadu, in the appeals from Tamil Nadu. Kapil Sibal, Senior Advocate (E.C. Vidya Sagar and D.N.N. Rao, Advocates, with him), for some respondents in the appeals from Tamil Nadu. Raja Ram Aggarwal, Senior Advocate (Praveen Kumar, Advocate, with him), for some other respondents in the appeals from Tamil Nadu. The judgment of the Court was delivered by J.S. VERMA, J. The question for decision is: Whether for ....
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....onal price, shall intimate the same in writing to the producer of sugar and the sugarcane grower connected with the supply of sugarcane to such producer of sugar. ......................" In Tamil Nadu, the State Government duly exercised its power by appointing the Director of Sugar and Cane Commissioner, who, by order dated July 2, 1983, determined the "additional cane price" under clause 5A at Rs. 28.15 per M.T., for the respondent, i.e., Thiru Arooran Sugars Ltd., making the final statutory cane price as per the Control Order at Rs. 179.55 per M.T., the "minimum cane price" fixed by the Central Government being Rs. 151.40 per M.T. There is no dispute that this additional price fixed under clause 5A attracts purchase tax whi....
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....T. paid by it to the cane grower is towards advance and liable to adjustment or refund, even if it remains with the cane grower, it cannot form part of the price of sugarcane which cannot exceed the aggregate of the minimum cane price fixed under clause 3 and the additional cane price fixed under clause 5A. This is the common stand of all sugar factories, as purchasers of sugarcane from the growers. The purchasers filed writ petitions challenging the demand by the State Government of purchase tax on the above excess amount of Rs. 24.25 per M.T. They contested the demand on the ground that it could not form a part of the sale price of cane sugar which had been statutorily fixed under clauses 3 and 5A of the Control Order. The Madras H....
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....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 5A which means that in case the fixation under clause 5A 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 sugarcane for computation of the purch....
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....e connected matters arising out of the judgment of the Karnataka High Court, similar writ petitions filed by the purchasers of sugarcane were dismissed. The two decisions of the Karnataka High Court which require reference are Pandavapura Sahakara Sakkare Kharkhane (P.) Ltd. v. State of Mysore [1973] 32 STC 104 and Tungabhadra Sugar Works Ltd. v. State of Karnataka [1994] 93 STC 561. In Pandavapura [1973] 32 STC 104 (Mys) it was found proved as a fact that the substance of the transaction between the purchaser and the cane growers was for payment of the enhanced price for the sugarcane supplied and the amount paid in excess of the statutory price was paid under the contract and not either as ex gratia payment or towards advance. In th....