Decided on November 02,1982



Jeevan Reddy, J. - (1.) These two tax revision cases are preferred by the same assessee. T.R.C. No. 30 of 1978 pertains to the assessment year 1972-73, while T.R.C. No. 31 of 1978 pertains to the assessment year 1973-74. The assessee is the Chittoor Co-operative Sugars Ltd.
(2.) Four questions are raised for our consideration in these tax revision cases, which we shall deal with in seriatim. The first contention urged by Mr. P. Venkatarama Reddy, learned counsel for the assessee, is that the inclusion of the turnover relating to diesel oil supplied by the assessee to the lorries hired by it in its turnover is contrary to low. The facts relevant to this question are : During the crushing season, the assessee engaged certain lorries belonging to the lorry contractors, on a permanent basis. Those lorries were to be used only for purposes of the assessee, and for no other purpose. The charges therefor were to be paid on a particular basis agreed between the parties. It is relevant to state that under the agreement, the assessee had not undertaken to supply the diesel oil for the lorries, which means that the lorry contractors had to procure the requisite quantity of diesel from the usual or their own sources. It so happens that the assessee owns a private petrol bunk, which it has installed to meet the requirements of its own vehicles and lorries. Mr. P. Venkatarama Reddy tells us that the assessee has paid 12 per cent Central sales tax on the fuel which is supplied to it for the said petrol bunk, and that no C forms are also issued by the assessee, which would have enabled it to claim a lesser rate of Central sales tax. Be that as it may, the admitted fact is that the diesel was supplied from the assessees private petrol bunk to the lorries belonging to the contractors and which were engaged by the assessee during the crushing season. (The diesel is said to have been supplied at the cost price without charging any profit).
(3.) The department included the said turnover relating to diesel, in the total turnover of the assessee, which was objected to. The Tribunal held that inasmuch as the assessee was under no obligation to supply the diesel under the agreement entered into by it with the lorry contractors, the supply of diesel to such lorries amounts to "sale" and has been properly included in the total turnover. Mr. Venkatarama Reddy submits that the position here is akin to what happens in the case of a service contract. He relies upon two decisions dealing with service contracts, viz., State of Andhra Pradesh v. Hotel Sri Lakshmi Bhavan [1974] 33 STC 444 and Northern India Caterers (India) Ltd. v. Lt. Governor of Delhi [1978] 42 STC 386 (SC) in this behalf. On a perusal of the said judgments, however, we find that in the first mentioned case the food was supplied by the assessee to its employees as a part of the wages under the contract of service, and therefore it was held that there was no sale of the food so supplied. The said decision applies the principle relevant in the case of a works contract to service contract as well. Same is the case in Northern India Caterers (India) Ltd. v. Lt. Governor of Delhi [1978] 42 STC 386 (SC). That was a case where the meals were served to the visitors and there was no separate charge for the meals, but the charge was made on "inclusive terms" basis which covered all the amenities, including the meals provided to the guests. We are of the opinion that the principle of the said decision has no application to the facts of the present case. Here the assessee voluntarily supplied diesel - may be at the cost price - and the lorry contractors purchased it from the assessee, instead of purchasing from another petrol bunk. We are, therefore, of the opinion that the finding of the Tribunal on this question does not call for any interference.;

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