Decided on January 22,2009

Sri Venkateswara Cooperative Sugar Factory Ltd. Appellant


J. Shyam Sundar Rao, Chairman - (1.) THIS is an appeal filed against the Revisional Orders of Deputy Commissioner (CT), Chirtoor in GI No. 1193/1997 -98 (APGST), dated 20.2.2003. The appellant is M/s. Sri Venkateswara Cooperative Sugar Factory Limited, Gajulamandyam. It is on the rolls of Commercial Tax Officer -II, Tirupathi. It deals in manufacture of sugar and its by -products. The Commercial Tax Officer passed final assessment order on 27.3.1999 for the assessment year 1997 -98. The Deputy Commissioner (CT), Chittoor by virtue of powers conferred under Section 20(2) of the APGST Act, having observed that the order passed is prejudicial to the interest of revenue, proposed to levy tax on the turnover of Sugar -cane seedlings supplied to the farmers. Hence, he issued pre -revision show cause notice calling for the objections of the assessee. In the objections, the dealers claimed exemption from payment of tax as per G.O.Ms. No. 562, dated 21 -4 -1983, that the Deputy Commissioner rejected the contention and levied tax on sugar -cane seedlings at 10%. Aggrieved by the same, the present appeal is preferred.
(2.) IN the appeal grounds, it has been contended by the appellant as follows: The disputed turnover of Rs. 10,74,790/ - relates to sales turnover of sugar -cane seedlings supplied to farmers, the price of which was recovered from the value of cane supplied by them. The supply of seedlings to farmers cannot be treated as a sale, since the farmer has to sell the resultant sugarcane to the appellant. Reliance is placed on the case in between M/s. Vijaya Aluminium Industries, Warangal Vs. The State of Andhra Pradesh reported in : (1996) 22 APSTJ 34/(1996) 103 STC 508 and : 23 STC 273 in the case of V.P. Vadivel Achari Vs. Madras Sales Tax Appellate Tribunal. Under G.O.Ms. No. 562, Governor of Andhra Pradesh, by virtue of powers conferred under the APGST Act exempted the payment of sales tax on sales of Saplings, Seedlings and Plants. At the time of hearing of the appeal, the learned counsel appearing for the appellant would submit that under the agreement, the appellant supplied sugar -cane saplings to the farmers and that the farmers are under obligation to sell the resultant sugar -cane to them under which they would deduct the value of sugar -cane seedlings supplied to them and consequently, it is argued that the supply of sugar -cane seedlings to the farmers would not constitute sale. Alternatively, it has been argued that under G.O.Ms. No. 562, dated 21.4.1982 seedlings, saplings, plants etc., were exempted by Government of Andhra Pradesh from levy of tax.
(3.) ON the other hand State Representative contends that the alleged agreement has not been filed anywhere showing that the farmers had agreed to sell the sugar cane raised and realized by them to the appellant's sugar factory agreeing for reduction of purchase price of the sugar -cane seedlings from out of the sale price payable to the farmers. It is also argued that the farmers are at liberty either to sell the sugar -cane to the appellant or to some other factory in as much as some farmers may by themselves prepares jaggery out of the sugar -cane raised by them. Hence, it is argued that there is no evidence that the sugar cane was realized from the same sugar -cane seedlings, saplings etc., supplied by the appellant. It is also further argued that in view of the decision rendered by this Tribunal in between the Etikoppaka Cooperative Agricultural & Industrial Society Limited, Visakhapatnam Vs. Commercial Tax Officer, Anakapalle, Visakhapatnam reported in : (2000) 31 APSTJ 77, the sugarcane seedlings are different from sugar -cane and supply of sugar -cane by the cooperative society to its members though there is no profit motive, constitutes sale and is liable to tax.;

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