15705 15706 of 1995 in the High Court as by that time others had filed writ petitions raising the same questions in the High Court.
In its sales tax return for that year it did number include the amounts paid as planting subsidy and transport subsidy in its taxable turnover as according to it the same were number includible therein.
and for the distance beyond 30 kms.
For the year 1990 91 the advice was that the sugarcane growers should bear transportation charges up to the distance of 30 kms.
For the years 1991 96 also it had followed the same pattern.
800 per acre and for those who were to plant in February, June and July, 1990 it was to be paid at the rate of Rs.
The Assistant Commissioner of Sales Tax did number agree with it and assessed tax after including these amounts.
The manufacturers of sugarcane in the State of Tamil Nadu are governed by the Madras Sugar Factories Control Act, 1949 and the rules framed thereunder and also by the Sugar Control Order, 1966.
1999 Supp 5 SCR 466 The Judgment of the Court was delivered by NANAVATI, J. Leave granted.
paid by the appellants to third party lorry owners for transporting sugarcane pursuant to the State Governmentss direction can be aggregated with the price of sugarcane and included in the turnover of the appellants and iii whether levy of penalty was justified in view of the facts and circumstances of these cases.
There was number companytractual certainty that the grower would grow the agreed variety of sugarcane or that he would sell all the produce of that land to the appellants.
On the basis of that announcement willing cane growers had entered into agreements with it.
In these appeals the appellants are pressing only three points.
the charges should be borne by the sugar manufacturers.
600 per acre.
They are whether planting subsidy paid by the appellants the cane growers can be said to be a part of the price of sugar cane purchased by it from them and can legitimately be included in the turnover of the appellants ii whether the transport subsidy charges in excess of 30 kms.
The appellant in the appeals arising out of S.L.P, C Nos.
One of the terms of the agreement was mat sugarcane was to be delivered at the factory gate by the sugarcane growers.
Pursuant to those agreements the sugarcane growers were supplied seeds by it and the cane growers after sowing and raising die crops had offered the same for sale to it in the prescribed manner.
The planting subsidy were paid per acre of land and there was numberobligation on the grower to grow sugarcane on particular plot of land even after accepting the subsidy.
Same view was taken by the Sale Tax authorities and against the order passed it had filed appeals and they were pending when on 6.11.1996 to avoid recurring of such situation every year it filed six writ petitions in the Madras High Court, seeking a declaration that words aggregate, or delivered or supplied or otherwise disposed, either directly or through another, and account of others in the definition of the term turnover as companytained in Section 2 r of the Tamil Nadu General Sales Tax Act, 1959 hereinafter referred to as the Tamil Nadu Sales Tax Act and the Explanation 2 ii thereto are ultra vires Entry 54 of List II of the 7th Schedule of the Constitution and, therefore, subsidies and expenses incurred by the sugar manufacturers or paid to the sugarcane growers both prior to or companylateral to the sugarcane agreements or after the sale and transfer of property in sugarcane from the growers to the manufacturers are outside the charging provisions of Section 3 2 of the Sales Tax Act and also for a mandamus restraining the sales tax authorities from re covering purchase tax by including the amounts paid as planting and transport subsidies in its taxable turn over.
Though the sale companytemplated by the Act was factory gate sale and under the agreements also the obligation of the sugarcane growers was to deliver sugarcane at the factory gate, in view of the general advice of the Tamil Nadu State Government, which was in the nature of administrative instruction, it did subsidise freight transport charges.
The facts relating to Parry are also similar to the facts of Arooran Sugars except that the assessment years involved are different Challenging the assessment orders it filed Writ Petition Nos.
5441 52 of 1997 are against the decision in Writ Petition Nos.
The writ petition filed by Parry were also dismissed following the Full bench judgment in Aroorans case.
The Madras Sugar Factories Control Act, 1949, hereinafter referred to as the Act the Rules framed thereunder and the Sugar Control Order, 1966 apply to its sugar manufacturing activity.
5589 to 5592 of 1997 is Thiru Arooran Sugars Ltd. hereinafter referred to as Arooran Sugars .
The appellant then preferred an appeal to the higher appellate authority.
Price as fixed by the Central Government was to be paid against delivery of sugar cane.
4973 74 of 1997 and S.L.P. C Nos.
Other petitions filed by Arooran Sugars were dismissed later on following the judgment delivered by the Full Bench.
The appellant in the other two appeals is E.I.D. Parry I Ltd. hereinafter referred to as Parry .
For the year 1990 91 it had announced on 5.11.1989, planting subsidy payable to those sugarcane growers who were willing to plant Co.C.661.
Parry is also engaged in manufacturing sugar.
For those growers who were to plant that variety in December, 1989 and January, 1990 the subsidy was to be paid at the rate of Rs.
Against that order and the demand raised on its basis the appellant preferred an appeal to the Deputy Commissioner but it was dismissed.
15705 15706 of 1995.
In order to provide incentives to sugarcane growers and to ensure sufficient supply of sugarcane of good quality it has been announcing every year planting subsidy payable to those sugarcane growers who are able to grow, for the immediately following crushing season, that variety of sugarcane which it requires.
Like Arooran Sugars it also questioned the validity of die above referred expressions in Section 2 r and sought a similar mandamus.
They were dismissed by a companymon judgment.
15532 35 of 1995 and L.P. C Nos.
The two writ petitions filed by Arooran Sugars were heard along with some other Tax Ceases by a Full Bench of the Madras High Court, as there were companyflicting decisions of that Court on some of the points involved in those cases.
