TaxTMI 
TaxTMI 
2003 (3) TMI 682
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....the provisions of the Constitution of India; (3) Direct the Board to refund such amounts illegally withheld by them with interest thereon. A learned single Judge of this Court, having opined that the issue brought before the court is a contractual matter between the coffee growers and the Coffee Board and that there are no statutory provisions governing fixation of prices of coffee payable to the growers of the coffee, has dismissed the writ petitions by order dated June 7, 1999. Hence, these writ appeals by the growers of coffee in the State of Tamil Nadu. 2.. The facts of the case in brief are as follows: The appellants are conglomerate of the estates known under the generic name of Silver Cloud Tea Estate. The appellants grow both coffee and tea in their estates situated at Gudalur in the Nilgiris district. The appellants have been selling the coffee grown in their estates to the Coffee Board as per the provisions of the Coffee Act, 1942 (for short, "the Act"). The appellants had been pooling coffee with the Coffee Board under the name Silver Cloud Estates from 1974/75 to June 30, 1980 and they had also been pooling coffee under the name Chikmoyar Estates Syndicate f....
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....he Act. 4.. We have heard Sri. B.V. Acharya, learned Senior Counsel for the appellants and Sri M.V. Seshachala, learned Senior Standing Counsel for the Coffee Board. The learned counsel for the parties have reiterated the same contentions raised by their clients in their pleadings. 5.. Having heard the learned counsel for the parties, the only question that arises for decision is whether the long-standing method adopted by the Board in fixing the price the coffee payable to the growers of coffee at a uniform rate is vitiated on any permissible ground, legal or factual and whether such method could be condemned as irrational or arbitrary or violative of the postulates of article 14 of the Constitution. 6.. The enactment of the Coffee Act in 1942 and creation of the Board, as a statutory authority for purchase and sale of coffee in domestic markets as well as international markets, has had a long history. After the out break of second world war, the Indian Coffee that enjoyed prime export markets before in European and other advanced countries lost them and the Industry was facing crisis. With the object of rehabilitating the Industry and placing it on a sound footing, th....
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.... Gazette exempt such class of owners from the provisions of this sub-section. (2) Delivery shall be made to the Board in such places (at such times) and in such manner as the Board may direct, and such directions may provide for partial delivery to the surplus pool at any time whether or not at that time the internal sale quota has been exceeded: and the coffee delivered shall be such as to represent fairly in kind and quality the produce of the estate. The Board may reject any consignment offered for delivery which does not satisfy this requirement, but shall not reject any consignment merely for a defect in curing. (3) Coffee delivered for inclusion in the surplus pool shall upon delivery to the Board remain under the control of the Board which shall be responsible for storage, curing where necessary, and marketing of the coffee. (4) The Board shall (................) (from time to time) prepare a differential scale for the valuation of coffee, and shall in accordance with that scale classify the coffee in each consignment delivered for inclusion in the surplus pool according to its kind and quality, and shall make an assessment of its value based on its quantity, kind a....
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....rchase tax from the growers individually. The Board meets all its liability towards tax from the pool fund. It is trite, once coffee supplied to the Board, the Board becomes the absolute owner of the coffee and the grower is entitled to the price after deducting the cost of storing, curing and marketing coffee including taxes paid. The question of the growers paying purchase tax in accordance with the rate prevailing in the respective States never arises, because, the tax is paid by the Board in respect of the coffee owned by it and not the coffee owned by the growers. It is borne out from the records and the pleadings that it has been the long-standing practice of the Board that after coffee is delivered to the Board by the growers, the Board fixes the prices that shall be paid to the growers uniformly throughout India after deducting overhead charges like cost of storing, curing, marketing and various other expenses incurred in the disposal of the coffee both in the domestic market and international market. 12.. The Board is to meet the demands of the coffee first in the domestic market and the excess stock of coffee would be sold in the international market. In the statement ....
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....of the compulsory delivery of coffee to the Board as mandated by section 25 of the Act. The Coffee Act requires that the entire coffee produced except the quantity allotted to the internal sale quota, if any, should be sold to the Coffee Board through the modalities of the compulsory delivery and correspondingly the Coffee Act requires Board to purchase the coffee delivered to it by the growers as a matter of legal obligation. The Board, in the scheme of the things envisaged under the Coffee Act, is entitled to fix the final price of the entire coffee purchased by it and stored in the pool after taking into account all overheads which will be incurred by the Board from and out of its pool fund. 14.. The contention of Sri. B.V. Acharya, learned Senior Counsel for the appellant, that Board is collecting purchase tax at a rate higher than the rate at which the purchase tax is liable to be paid on purchase of coffee in the State of Tamil Nadu under the provisions of the Tamil Nadu General Sales Tax Act is misconceived. The Board is not an authority to collect taxes or to refund the tax under the provisions of the Tamil Nadu General Sales Tax Act. The price fixed by the Board, of cou....
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.... the parties, it was acting as a purely trading organisation with the risk of incurring loss or profit in the trade. It is needless to state that there is always such risk involved in every business of purchase and sale and the authorities concerned will be making profit or incurring loss due to several factors such as exchange fluctuations and other pricing methods. In the present case, the petitioners lifted the gold long time after sale price was increased in the market. Suppose, the sale price was reduced on account of decrease in the customs duty or decrease in other duties, the Corporation would not have a right to insist that though the prevalent market value is lesser than the previous rate, the buyers of the gold should pay the price of the gold at the previous higher rate. This example is given by us only to show that incurring loss or making profit in a trade like this is very much inherent in the trade itself and therefore, simply because the petitioners are required to pay the price of the gold at the higher rate, consequent upon the increase in the customs duty and consequential increase in the sales tax etc., it is not the right of the petitioners to insist that the ....