TaxTMI 
TaxTMI 
2024 (9) TMI 611
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....ANTH.,J. The petitioner is the Cheyyar Co-operative Sugar Mills Limited based in Vellore District (referred to hereinafter as 'petitioner'). It is aggrieved by an order of the Sales Tax Appellate Tribunal passed on 04.10.2007 and 23.11.2007 reversing the order of the Appellate Assistant Commissioner and restoring the assessment made in terms of the Tamil Nadu General Sales Tax Act 1959 (hereinafter referred to as 'Act') relating to the periods 1995 - 96 and 1996 - 97. 2. The issue in question relates to the taxability or otherwise of the State Advisory Price (SAP) voluntarily paid by the petitioner mills to cane growers. Some history would be apposite to deal with the legal question that raises for resolution in these matters. 3. The pet....
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....ds as follows:- "It is important to note that in Tamil Nadu there is no statutory provision for regulating the supply and purchase of sugarcane for use in sugar factories or khandsari sugar manufacturing units. Therefore, the order of the State Government dated 15.11.1980 fixing higher revised minimum cane price had not been issued in exercise of any statutory power. In para 6 of the Reports, the Court observed that unless there be an agreement between the grower and the purchaser for purchase of the sugarcane at higher price, the obligation of the purchaser is to pay the grower only the aggregate of the amounts fixed under clauses 3 and 5-A. It was further observed that without any contractual or statutory basis fixing the sale price of ....
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....ne under an agreement between the grower and the purchaser irrespective of a lower amount being fixed as an aggregate of the price fixed under Clauses 3 and 5-A of the 1966 Order. It was further held that unless a clear finding to that effect is recorded, the amount paid by the purchaser in excess of the aggregate of the minimum price fixed under Clause 3 and the additional price fixed under Clause 5-A, as part of the amount paid in advance prior to the fixation of the additional price under Clause 5-A, cannot be treated automatically as a part of the total price of the sugarcane. 8. Thus, the procedure followed in the State of Tamil Nadu for fixation of SAP, was collaborative. The three stake holders, the State, cane growers and the sugar....
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....t, the findings by the Sales Tax Appellate Tribunal, in the case of Ambur Cooperative Sugar Mills in STA 1561 of 2002 batch (order dated 03.09.2007) assume relevance. The STAT notes at paragraph 9 (internal page 7 of the order), the submission of the State that there was a meeting conducted for the purpose of fixation of SAP on 04.11.1995. 13. However, the minutes of that meeting that had been produced by the representative of the Commercial taxes department, revealed that the sugar mills had not been represented and hence the meeting was not a tripartite meeting. Incidentally, the present Petitioner is also situated in Vellore District and it is an admitted position that it had not participated in the tripartite meeting for fixation of pr....
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....s of the Sugar- cane (Control) Order, 1966, particularly Clauses 3 and 5-A therein, it is clear that the total price of sugar-cane fixed thereunder is the aggregate of the minimum cane price fixed under Clause 3 and the additional cane price fixed under Clause 5-A. Thus, unless there be an agreement between the grower and the purchaser for purchase of the sugar-cane at a higher price, the obligation of the purchaser is to pay to the grower only the aggregate of the amounts fixed under Clauses 3 and 5-A. In other words, under the Statute there is no liability of the purchaser to pay to the grower any amount in excess of this aggregate amount. Thus, without any contractual or statutory basis fixing the sale price of sugar-cane at an amount hi....
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....ment between the purchaser and grower. It was argued by learned counsel for the State that the higher price inclusive of the excess amount included in the advance paid on State advice is deemed to have been paid by an agreement between the grower and the purchaser and, therefore, the entire amount would be the price of sugar- cane. This is a question of fact in each case. It is true that if in a given case it is found as a fact on the basis of evidence that the purchaser had agreed with the grower to pay the higher price described as 'advance' including the amount in excess of the additional price fixed under Clause 5-A then in that case the entire amount would be the price of sugar-cane. However, there is no such basis found in t....