TaxTMI 
TaxTMI 
2005 (11) TMI 247
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....stion are 1987-88 and 1988-89. During this period, the agreement for sale and purchase of sugar which was entered into between the appellant and the cane growers (where the appellant is referred as "the first party" and the cane growers as "the second party") provided inter alia: "(1) Both the parties agree to act according to the provisions of Madras Sugar Factory Control Rules, 1949, Sugarcane (Control) Order, 1996 and the orders of Tamil Nadu Government Agricultural (Cane) Department and the Director of Sugar/Cane Commissioner of Tamil Nadu (2) The second party agrees to sell the entire cane planted/to be planted in the land specified in the schedule to this agreement to the first party for the control price fixed by the Government from time to time. (3) ............... (4) .............. (5) .............. (6) The second party agrees to sell and deliver the cane by loading them as per the terms of this agreement to the first party. It is the responsibility of the first party to arrange transportation of the above delivered cane to the factory. However, both the parties agree to follow the orders passed from time to time by the Director of Sugar/Commissioner of Sugar, Tam....
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....o the appellant's mill paid by the appellant under this directive, in the purchase price. The appellant has also relied upon the orders in assessment proceedings in respect of earlier years whereby the transport charges had been excluded from the taxable turnover of the appellant on a construction of the agreement between the appellants and the cane growers. Reliance has also been placed on the Tribunal's decision dated March 24, 1995, rejecting the respondent's claim to enhance the purchase price by adding transportation charges. It was pointed out that the Tribunal had referred to a Circular issued by the Board of Revenue on July 31, 1982, by which the Board of Revenue excluded the transport subsidies paid by the appellants to the lorry owners for transporting sugarcane from areas beyond 40 kms. It is submitted that the Circulars are binding on the Department. 6.. Learned counsel appearing for the respondent has submitted that the price fixed by the Control Order was only the minimum and that the definition of price in the Control Order allowed for the price to be determined on the basis of the agreement between the seller and the purchaser. It was also submitted that the disput....
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....9.. Clause (6) of the agreement did not say that the sale was to take place in the field as contended by the appellant. It merely provided for the method of sale. This is also clear from the conduct of the parties. The appellant has admittedly included the transport charges up to 40 kms. from the mill within the purchase price and has admittedly paid tax thereon. If the sale took place at the field and transportation charges did not have any connection with the cane growers, there was no need either to include the transport charges from the field up to the 40 kms. mark in the purchase price or to expressly provide that the transportation charges would be payable by the vendor. Besides the very use of the word "subsidy" in the directive dated September 12, 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. 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....
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....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 de hors 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 r....