Ruma Pal, J. - (1.) The appellant has a sugar mill and purchases sugarcane from cane growers. An agreement was entered into between the appellant and the cane growers. In terms of the agreement, the appellant arranges transport of the sugarcane from the fields to the appellants mill. The question is whether the transport charges are excludible from the taxable turnover of the appellant for the purpose of purchase tax under the Tamil Nadu General Sales Tax Act, 1959
(2.) The Assessment years in question are 1987-88 and 1988-89. During this period, the agreement for sale and purchase of sugar which was entered into between the appellant and the cane growers (where the appellant is referred as the first party and the cane growers as the second party) provided inter alia : 1) Both the parties agree to act according to the provisions of Madras Sugar Factory Control Rules, 1949, Sugarcane (Control) Order, 1996 and the orders of Tamil Nadu Government Agricultural (Cane) Department and the Director of Sugar/Cane Commissioner of Tamil Nadu 2) The Second Party agrees to sell the entire cane planted/to be planted in the land specified in the schedule to this agreement to the first party for the control price fixed by the Government from time to time. 3 to 5 ********** 6) The second party agrees to sell and deliver the cane by loading there as per the terms of this agreement to the first party. It is the responsibility of the first party to arrange transportation of the above delivered cane to the factory. However, both the parties agree to follow the orders passed from time to time by the Director of Sugar/Commissioner of Sugar, Tamil Nadu."
(3.) The other clauses of the agreement, broadly speaking, related to the appellants financing of the growth and harvesting of the sugarcane and its control over the cutting and disposal of the sugarcane.;