TaxTMI 
TaxTMI 
2025 (12) TMI 1887
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....') was established under The Food Corporation Act, 1964 (For short 'the Act') for undertaking purchase, storage, movement, transport, distribution and sale of food grains and other food stuff from the surplus State and to transfer the same to deficit State(s) besides export, procurement at minimum support price fixed by Government of India; storage and distribution of foodgrains throughout the country for central pool for supply to State Governments, deficit in foodgrains; Armed Forces, Public Distribution System and National Employment Food for Work Programme etc. Procurement of food grains is carried out from farmers through State Agencies for ultimate distribution. Appellant is registered under Sales Tax Act/VAT Act and Central Sales Tax Act in the State of Haryana at Karnal and covers all Districts in the State. 4. Government of India, Ministry of Consumer Affairs, Food and Public Publication (Department of Food and Public Distribution), on account of drought during the year 2002-2003 approved payment of special drought relief at the rate of Rs. 20/- per qtl. of paddy to farmers w.e.f. 01.10.2002 vide notification dated 08.10.2002. Reference was made to memo dated 08.10.2002....
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....impugned orders are completely de hors the provisions of law and have been passed without appreciating the correct interpretation of definition of gross turnover as contained in Section 2(gg) of the 1973 Act. It was submitted that drought relief at the rate of Rs. 20/- per qtl. was announced by the Government of India, Ministry of Consumer Affairs, Food and Public Distribution and present appellant was only the agency through which drought relief was to be distributed. Therefore, to include the said amount in gross turnover of appellant is absolutely illegal and arbitrary. It was urged that appellant-Food Corporation of India is only an agency through which the relief/money was routed, appellant does not derive any benefit thereof and neither any service was provided, the said amount does not constitute price of the grains. It was further argued that judgments as referred to by the majority view, are not applicable to the facts and circumstances of the present case. It was thus prayed that this appeal be allowed and impugned orders be set aside while upholding the minority view of learned Tribunal. 8. Learned counsel for respondent-Department/Revenue has opposed the appeal. She ....
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....s. 89,61,325/- Less amount deposited as per directions Of Jt.ETC(A) during the proceeding of appeal Rs.64,81,329/- Tax due (payable) Rs. 24,79,996/- Say due Rs. 24,79,996/- 13. First Appellate Authority upheld the same with the following observations:- "As discussed in the preceding paragraph of this order, the amount is an obligation to be discharged by making the payment over and above the MSP and so it is the actual consideration passing at the time of sale. Recently State Legislature made amendment in nth the provision to take out bonus part from the sale price subject to some conditions. It indicates legislative intention to include the amounts in the previous periods. Moreover interdepartmental circular and the clarification do not interpret the provision in different acts judicially unless based on legal finding. These can be the opinions favorable to the issuing deptt. The decisions cited by the AA in his assessment order and referred as 26-STC-248 and 27-STC-120 also explain that the extra charges are also a part of the turnover. These were further followed by the Hon'ble SC, while reversing the decision of AP High Court and decide....
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....s was also examined at the concluding arguments but FCI has not issued any ST-15 declarations of these purchases and ST-23 A lists were not found available on their records. One or two files of commission agents were also checked but the matter was not clarified by the Deptt. As the cases were found to be self assessed for this period and the transactions could not be cross verified. To my mind, this does not make any difference because the ultimate tax liability is on the last purchases and that is FCI in this case." 14. Admittedly, there was divergence of opinion amongst both members of learned Tribunal at the first instance leading to constitution of a Larger Bench. One of the Members upheld the order passed by the Assessing Authority as upheld by the First Appellate Authority. The second Member however observed that special drought relief given at the rate of Rs. 20/- per qtl. of paddy is simply a means of disbursing the relief and has nothing to do with the price of the grain. Therefore, once it was only a mode of disbursement it cannot thus form part of the sale price of the grain. Larger Bench of the Tribunal as per its majority view on considering the entire facts and ci....