TaxTMI 
TaxTMI 
2009 (3) TMI 951
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....dated November 25, 1983 passed by the Tribunal. Accordingly, the Tribunal has referred the following questions of law (in G.S.T.R. No. 14 of 1990) to this court for its opinion: "(1) Whether, in the facts and circumstances of the case, the expenses incurred by the State or agencies of the Food Corporation of India after acquiring or purchasing the goods before delivery to the petitioner-dealer could form part of gross turnover and be subjected to tax? (2) Whether the foodgrains procured by the Food Corporation of India under the levy order amounts to sale/purchase and can be subjected to tax? (3) Whether, in the facts and circumstances of the case, the Tribunal is right in law in holding that the bardana supplied by the Food Corporation of India along with foodgrains can be subjected to tax? It is also pertinent to mention that in some of the references, viz., G.S. T.R. Nos. 49 and 50 of 1989, 36, 59 and 60 of 1991, the Tribunal has also referred the question of law as to whether the market fee could also be subjected to tax, for opinion of this court, which is an additional question of law in the aforesaid cases. The additional question of law as referred in G.S.T.R. No. ....
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....1991 are that for the assessment year 1971-72, the Assessing Authority, Jalandhar, created an additional demand of Rs. 23,55,360, vide his order dated November 15, 1977. Feeling aggrieved, the FCI filed an appeal before the Deputy Excise and Taxation Commissioner (Appeals), Jalandhar Division, Jalandhar, who dismissed the same vide order dated November 16, 1984. The FCI further filed an appeal before the Tribunal, who remanded back the matter to the Assessing Authority, vide its order dated December 29, 1986 for fresh determination of tax liabilities on the following three issues: "(a) No tax is to be levied in respect of levy rice and for this purpose, procurement charges, price of bardana and the element of market fee would stand included in the price of levy rice not exigible to tax. (b) As regards non-levy rice, tax will be levied in accordance with the law and the price of such rice as a base for tax will include procurement charges, bardana and market fee. (c) Consignment sales will be treated as sales for the purchase of sales tax in accordance with the order of the High Court dated January 24, 1985 in the case of Des Raj Pushap Kumar Gulati v. State of Punjab repor....
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.... K. L. Goyal, learned counsel for the dealer-FCI, has argued that after bidding of paddy or wheat the charges incurred by the dealer-FCI on weighment, stitching charges, expenses incurred on stitching jute thread, printing of the gunny bags, dammi and carriage, etc., have to be excluded from the aggregate of the amounts of sale and purchase, which is to constitute turnover. According to the learned counsel the aforesaid charges are borne by the dealer-FCI and, therefore, would not constitute "turnover" within the meaning of section 2(i) of the Act. In that regard he has placed reliance on a judgment of the honourable Supreme Court rendered in the case of McDowell & Company Ltd. v. Commercial Tax Officer [1977] 39 STC 151, where the expression "any sums charged by the dealer" has been interpreted in its ordinary popular sense. It has been held that it means "what is demanded and collected or received by the dealer". He has then submitted that the only relevant question for determination in such like cases would be as to what is the amount payable by the purchaser to the dealer as consideration for sale and not as to what is the net consideration retainable by the dealer. In that reg....
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.... time of or before delivery thereof. It follows that after the agricultural produce has been purchased by the dealer in inter se bidding then for taking its delivery it has to incur certain expenditure, which are either on or before the delivery. The provision is illustrative with regard to the aggregate of the amounts of purchases and parts of purchases actually made by any dealer. Therefore, it would include the price of bag, labour charges, stitching charges, price of jute thread, dammi and carriage, etc. In that regard, the contention of the learned State counsel deserves to be accepted that there is no delivery taken before weighment, which is not possible without packing the agricultural produce in a gunny bag. We also find substance in the contention of the learned counsel that even stitching and labour incurred for all these activities have to be included for effective delivery of the goods, which would include carriage also. Therefore, question No. 1 deserves to be answered in favour of the Revenue and against the dealerFCI. In view of the above, question No. 1 is answered against the dealer-FCI and in favour of the Revenue. Re: Question Nos. 2 and 3 At the outset....
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.... is left untouched by the legislation in all disputed transactions. The disputed transactions are sales, may be, under the compulsion of a statute. Nevertheless, they are sales exigible to tax. Whatever coercive force is used to bring about the transactions, the same must be traced to legislation and not to the State Government as a party to such transactions. 27.. We, therefore, answer the principal common point holding that the levy procurement is a sale/purchase and therefore, falls within the purview of entry No. 54 of List II of the Seventh Schedule to the Constitution. The States were competent to levy sales/purchase tax on such transactions. In the light of the rulings of this court referred to above in detail, we are unable to agree with the submission of the learned senior counsel for the appellants that there was no area left for consensual agreement in the parties to the procurement transactions. The view taken by the Full Bench of the Allahabad High Court in Ram Bilas Ram Gopal case [1969] 24 STC 508 is the correct view, and the High Court of Allahabad (Lucknow Bench) was right in applying the same in the judgment under appeal. . ." Thus, it follows that question ....
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....would be exigible to tax. Accordingly, question No. 3 is also liable to be answered against the dealer-FCI and in favour of the Revenue. Additional question: Market fee Mr. K. L. Goyal, learned counsel for the dealer-FCI, has also pointed out with regard to the additional question raised in G. S. T. R. Nos. 49 and 50 of 1989, 36, 59 and 60 of 1991 concerning inclusion of market fee in the total turnover that the matter stands concluded by the honourable Supreme Court against the Revenue and in favour of the dealer-FCI in the cases of State of Punjab v. Guranditta Mal Shauti Prakash [2004] 136 STC 12; [2004] 3 RC 20; [2004] 5 SCC 791 and State of Punjab v. Chhabra Rice Mills [2006] 144 STC 1. He has drawn our attention to para 8, discussing the rationale adopted in the case of Guranditta Mal Shauti Prakash [2004] 136 STC 12 (SC); [2004] 3 RC 20; [2004] 5 SCC 791 and argued that there was no obligation cast on the part of the seller to pay the market fee since it is duty of the buyer to pay the same and the seller can realise it from the buyer. He has relied upon paras 5 and 6 of the judgment of the honourable Supreme Court in the case of Chhabra Rice Mills [2006] 144 STC 1 (SC....