TaxTMI 
TaxTMI 
1982 (11) TMI 152
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....d only for purposes of the assessee, and for no other purpose. The charges therefor were to be paid on a particular basis agreed between the parties. It is relevant to state that under the agreement, the assessee had not undertaken to supply the diesel oil for the lorries, which means that the lorry contractors had to procure the requisite quantity of diesel from the usual or their own sources. It so happens that the assessee owns a private petrol bunk, which it has installed to meet the requirements of its own vehicles and lorries. Mr. P. Venkatarama Reddy tells us that the assessee has paid 12 per cent Central sales tax on the fuel which is supplied to it for the said petrol bunk, and that no C forms are also issued by the assessee, which would have enabled it to claim a lesser rate of Central sales tax. Be that as it may, the admitted fact is that the diesel was supplied from the assessee's private petrol bunk to the lorries belonging to the contractors and which were engaged by the assessee during the crushing season. (The diesel is said to have been supplied at the cost price without charging any profit). The department included the said turnover relating to diesel, in t....
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....velopment of sugarcane, including supply of seed, chemical fertilisers, agricultural implements, irrigation facilities and other production requirements, including agricultural credit and to provide technical advice on improved cultivation methods". In pursuance of these objects of the society as incorporated in the bye-laws, the assessee procured chemical fertilisers and supplied the same to its shareholders, in proportion to the shares held by them. This supply of chemical fertilisers was treated as "sales". Mr. Venkatarama Reddy's contention is that the situation here is akin to the one obtaining in the case of supply of food and other amenities by the clubs to their members, and therefore, the principle enunciated by courts in that behalf applies with equal force herein. Reliance is placed upon Joint Commercial Tax Officer v. Young Men's Indian Association [1970] 26 STC 241 (SC), a decision of the Supreme Court. The Supreme Court there pointed out, on a reference to the English decisions, that in the case of unincorporated clubs, the principle adumbrated was that all the members jointly own the property and the goods of the club, and therefore, there is no question of sale of t....
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...., the Supreme Court observed as follows: "It must be remembered that by and large the farmers are illiterates. They do not know the ways of business. The general belief is that taking advantage of the ignorance and illiteracy of the farmers, businessmen exploit them. To avoid such exploitation, the Act authorised the formation of co-operative societies of the farmers through which they can sell their goods. Those societies merely function as agents for the farmers who are their members. By becoming members of those societies and subscribing to their bye-laws, they had given large powers to their agents so that their produce may be sold in the best possible manner. None of the bye-laws of the society goes to show that the society had purchased the goods entrusted to it by its members." In our opinion, the principle of these two decisions squarely applies to the facts of the present case. Here also, the shareholders of the society mostly are from a rural area, and the presumption that they may not know the ways of business and in case they individually go to purchase, the possibility of their being exploited by businessmen, is equally real. For that reason, they came together t....
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....y supply of goods or other articles by a society to its members or by a club to its members, constitutes "sale". The learned Government Pleader then relied upon the decision in Deputy Commissioner of Commercial Taxes, Tiruchirapalli Division v. North Arcot District Co-operative Sugar Mills Ltd. [1974] 34 STC 543, which is also relied upon by the Tribunal in support of its view. It would be appropriate to briefly note the basic facts of that case. The assessee there was a co-operative sugar mill, and it regularly purchased fertilisers of different kinds, manufactured a new manure mixture, and supplied the same to the cane-growers, who were members of the society. The supplies made to the cane-growers were shown in the accounts of the mill as "sales" effected by the society. In those circumstances, the Tribunal found that there was a sale of manure to the cane-growers, but held that inasmuch as the mill was not a dealer in fertilisers, the sale cannot be subjected to sales tax. When the matter came up before the Madras High Court, it was contended by the assessee-sugar mill that inasmuch as under bye-law 43 the society is expected to advance moneys to its shareholders, the society....
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....lf is exempted from tax, and that the gunnies in which the sugar was supplied or delivered are only the cheapest and the necessary means of delivery and transport, and hence it cannot be held that there was an implied contract for sale of gunny bags. Now, admittedly there was no express contract for the sale of gunny bags, nor does the bill issued by the assessee show separately the value or the cost of gunny bags supplied, though it is true that sales tax is charged on the value of gunny bags (at the rate of 0.12 paise each bag). The only question is, whether in the circumstances of the case, it can be held that there was an implied contract for the sale of gunny bags. The law on the subject has been set out in Hyderabad Deccan Cigarette Factory v. State of Andhra Pradesh [1966] 17 STC 624 (SC) which has been referred to with approval in State of Madras v. Cement Allocation and Co-ordinating Organisation [1972] 29 STC 114 (at page 117) (SC). The statement of law which was approved and which is also relevant for our purposes, reads as follows: "In the instant case, it is not disputed that there were no express contracts of sale of the packing materials between the assessee an....