TaxTMI 
TaxTMI 
1997 (12) TMI 611
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....rded contracts for the "purchase" of beedi leaves in the specified units for the 1997 season. The Government appointed the Corporation as "agent" for the Forest Department for the purpose of collection and disposal of abnus leaves in the forest areas. The Divisional Forest Officer entered into agreements with the petitioners on behalf of the agent-A.P. Forest Development Corporation which is owned and controlled by the State Government. The broad features of the contract are as follows: 2.. The petitioners, who are described as "purchasers" are required to do pruning of abnus plants in the unit after obtaining prior permission and will have to establish collection centres known as "khallas" and keep their representative at each collectio....
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....asmuch as there is no sale involved. It is submitted that the essence of the contract is the conferment of right to take away beedi leaves from the plants and it creates an interest in the land. In other words, the transaction, according to the petitioners, is in the nature of profit-a-prendre. It is contended that royalty is charged for conferring the said benefit but not as a consideration for sale. It is submitted that the use of the words "sale amount", "purchaser" are not conclusive. 4.. Reliance is placed on the decision of the Supreme Court in State of Orissa v. Titaghur Paper Mills Co. Ltd. [1985] 60 STC 213. The validity of the circular issued by the Commissioner of Commercial Taxes (6th respondent) in reference No. AI(3)/211....
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....ale, whether it is taxable in the hands of A.P.F.D.C. and whether collection charges are pre-sale expenses includible in the turnover. The decision of the Supreme Court in State of Orissa v. Titaghur Paper Mills Co. Ltd. [1985] 60 STC 213 relied upon by the learned counsel does not squarely apply to the facts of the case. The bamboo contracts considered therein are somewhat different. In any case, a comparative study of the agreements involved is necessary in order to decide whether the ratio of the said decision applies to the instant case. At best, the points raised in the writ petitions can be said to be debatable and nothing more. We therefore decline to go into those questions. 7.. Another aspect, which we cannot lose sight of is....
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....ade against the A.P. Forest Development Corporation which is said to be a registered dealer, filing the returns. Sections 19 and 21 of the A.P. General Sales Tax Act provide that any dealer objecting to any order or proceeding recorded can file an appeal. Though the assessment is made on the Forest Development Corporation, the petitioners dispute the liability of Corporation and consequently their liability to pay tax on the disputed turnover. The petitioners are more aggrieved because it is from their coffers that the tax is being realised. 9.. Keeping these considerations in view, we dispose of the writ petitions with the following directions: (1) The proceedings for assessment against the A.P. Forest Development Corporation for the....