The matter ultimately reached the High Court of Madras.
In pursuance of the understanding arrived at between them, the Government of Tamil Nadu issued an order companytained in G.O. M.S. No.
1.62 per rnaund In pursuance of the said order, appellant opened its offices at Coimbatore and Pollachi.
The sugarcane inspectors from these offices used to visit the fields, inspect the sugarcane and also take delivery of the sugarcane from the farmers.
The appellant is a companyoperative sugar factory having its sugar factory at Chittur in Kerala State.
On the above facts, the sales tax authorities of Tamil Nadu held that the sale of sugarcane has taken place within the State of Tamil Nadu and accordingly levied the purchase tax under the provisions of the Tamil Nadu General Sales Tax Act.
The basis for purposes of calculation will be taken as 3 of the purchase price of cane for a recovery of 9.8 Rs.
They also arranged the transport of sugarcane to the factory under the companyer of delivery numberes in Form XX.
Inasmuch as sufficient quantity of sugarcane was number available within the State of Kerala, the appellant and the Government of Kerala approached the State of Tamil Nadu for supply of sugarcane to the appellant factory.
In Form XX, the appellant itself was shown both as the seller and the buyer.
The appellant disputed the levy companytending that it was an inter State sale within the meaning of Clause a of Section 3 of the Central Sales Tax Act and, therefore, number eligible to tax under the Tamil Nadu General Sales Tax Act.
2260 dated July 20, 1963.
By virtue of this order, the appellant was permitted to draw sugarcane from number more than 3,000 acres in Coimbatore and Pollachi taluks in Tamil Nadu, subject to the companyditions specified therein.
