Dr. AR. LAKSHMANAN, J. - (1.) The short question involved in this appeal is whether the transportation charges and agents commission paid by the respondent-M/s A.P. Paper Mills Ltd. to the agent together with the cost of raw materials constitute "turnover" under Section 2(s) and is liable to sales tax under Section 6-A of the Andhra Pradesh Sales Tax Act, 1957 (6/1957).
(2.) The respondent is a public limited company engaged in the activity of manufacturing paper. The respondent is a registered dealer under the A.P. Sales Tax Act, 1957 (hereinafter called as "the Act") and is an assessee on the rolls of the Commercial Tax Officer, Aryapuram, Rajahmundry.
(3.) The respondent purchased hard wood (raw material) from unregistered dealers through persons called agents. The hard wood is used for the manufacture of pulp. The agents are engaged in the business of purchase of raw material from the unregistered dealers and supplying the same in the factory of the respondent on contract rates which included the cost of raw materials, transportation charges and the agents commission. The respondent filed their returns under the provisions of the Act. The Commercial Tax Officer found out that the respondent was paying sales tax under Section 6-A of the Act only on the cost of raw materials purchased from the unregistered dealers leaving out the transportation charges and the commission paid to the agents which amounted to Rs. 48,50,735/-.;