1983 (11) TMI 267

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....onus, freight or lorry charges, would form part of the purchase turnover liable to tax under the Karnataka Sales Tax Act, 1957 ("the Act"). 3.. The dealer is a company engaged in the manufacture of sugar. For the years 1969-70 and 1971-72 the company entered into agreements with the growers for purchase of sugarcane at the minimum purchase price fixed by the Central Government under the Sugarcane (Control) Order. Subsequently, there was some dispute between the company and the sugarcane growers as to the price payable for sugarcane. The dispute relating to the year 1969-70 was referred to an arbitrator, who made the award dated 30th October, 1970, directing that the company must pay Rs. 3 per metric ton as bonus and out of that Rs. 1.50 ....

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....ex gratia payments for the purpose of maintaining good relationship with the sugarcane growers. 6.. We do not think that any date of payment under a contract of sale would be relevant for the purpose of considering whether that payment should form part of the turnover or not. In a transaction of sale or purchase delivery of goods may be made on one day and the price may be paid on another day. The real question to be examined is whether the payments made subsequent to the purchases were in the nature of ex gratia payments or towards the price of sugarcane purchased. On the facts found the payments made for both the years in question were directly connected with the sugarcane purchased. They were not lump sum payments to each sugarcane gr....