TaxTMI 
TaxTMI 
2018 (9) TMI 299
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....ng various types of seeds of agriculture produce. In the year 2006-2007, respondent had shown purchases of such seeds from various farmers. Audit assessment was done by the Assessing Authority. However, in such assessment, the question of levying purchase tax on such purchases of the assessee did not come up for consideration. Aggrieved by the order of the Assessing Authority, the assessee had also preferred appeal before the Deputy Commissioner who allowed partial relief. Thereafter, the Deputy Commissioner noticed that the assessee had made purchases of seeds from the farmers who are unregistered dealers and that therefore, assessee was liable to pay purchase tax on such purchases. Notice for revision was therefore, issued within the time....
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....farmers. At that stage, seeds were possible of human consumption. It was only after the detailed process undertaken by the company that the seeds would become marketable and were actually sold by the company. He relied on another determination order dated 18.3.2009 in case of M/s. Green India Farm Biotech. By the revisional order dated 4.3.2015, he imposed tax, interest and penalty on the dealer. 4. The dealer thereupon approached the Tribunal by filing revision petition. Tribunal allowed such revision petition by the impugned judgment on the following grounds : i) When the original audit assessment order was passed by the Assessing Officer on 29.12.2010, the determination order in case of M/s. Green India Farm Biotech was alrea....
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.... therefore, committed an error in presuming that the authorities were aware but consciously decided not to impose tax. Our attention was drawn to a specimen agreement executed by the respondent company with the farmers for production of seeds to contend that this was a case in which the company had agreed to purchase the seeds produced by the farmer. 6. Since the respondent has remained exparte, we are somewhat handicapped in consideration of the issues. Nevertheless, we have perused the documents on record. 7. First of all, we do not think that the Tribunal was correct in drawing a conclusion that despite existence of the determination order in case of M/s. Green India Farm Biotech since the Assessing authority and the appellate auth....
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....m the farmers, carry out detail process of coating them with pesticides, pack them in lots in different packings and then put in market for sale. Dealer applied to the authority to be advised whether on the purchases of such seeds made by him from the farmers, any tax would be payable. Determination authority observed that the seeds purchased by the dealer were not marketed in the same condition. Seeds when purchased were untreated. A detailed treatment process was undertaken before such seeds were sold. Thus what was purchased by the dealer and what was sold in the market were two different products. Dealer was therefore liable to pay the purchase tax on such purchases. 11. In case of M/s. King and Queen Seeds Corporation, the assessee ....
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....r to relevant clauses of this agreement. (i) In this agreement, farmer agreed to use only the foundation seed provided by the company, for the use of which, it would pay the cost to the company. (ii) During such cultivation, the farmer would use sufficient water, fertilizer and pesticides. He would maintain necessary isolation distance, failing which, his seed supplied would be automatically cancelled. He would take all necessary steps to ensure the purity of the seeds. (iii) If in the process, he committed any fault due to which the seeds are either damaged or destroyed, same would be entirely his responsibility and he would raise no claim against the company. (iv) He would collect the sacks for transpor....
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....ltivation for which the remuneration was paid to the farmer. This was clearly a case where the company merely provided foundation seeds and the technical inputs to the farmer. Entire production was done by the farmer on his own labour, with input of his own cost and at the risk of the crop failing. At several stages, the agreement provided that any failure of the crop for any reason whatsoever, whether be it on account of an error of the farmer, natural factors or manmade factors, the company would not compensate the farmer for any loss. Farmer would pay for the seeds, would pay for the costs such as irrigation, fertilizer and pesticides. Farmer would cart the produce at his cost to the depot of the company. If the produce is rejected, the ....