S. N. Variava, J. - (1.) These Appeals are against the judgment of the Madras High Court dated 8th October, 2001.
(2.) Briefly stated the facts are as follows: The Appellants are the manufacturer of sugar. They purchase sugarcane from farmers. By virtue of the Sugarcane (Control) Order, 1966 made under the Essential Commodities Act, 1955 the price for such purchase is statutorily fixed. Clause 3 of the Sugarcane (Control) Order lays down the minimum price of sugarcane payable by a producer of sugar. This is the price which is payable immediately at the time that the sugar is purchased. Over and above this, by virtue of Clause 5-A, an additional price is also payable. This additional price is to be fixed on the basis of a formula laid down in the first Schedule of the Sugarcane (Control) Order. The Formula given therein is as follows: R-L+2A+B X = --------------- 2C R is the amount in rupees of sugar produced during the sugar year excluding the excise duty paid or payable to the factory by the purchaser. It is evident from the formula itself that the additional price is the amount which is incapable of determination at the time the sugarcane is supplied to the factory by the grower. The additional price can only be determined at the end of the sugar year and not earlier. Even though the additional price could not be determined till the end of the sugar year, in practice it took a long time to determine this price. Therefore, the State Government advised the sugar producers to pay a price which was higher than the minimum price fixed under Clause 3. The manufacturers of sugar, like the Appellants, also paid the additional price as fixed by the Government at the time of purchase. The additional price so paid was then adjusted against the price fixed under Clause 5-A of the Sugarcane (Control) Order, 1966.
(3.) Under the Tamil Nadu General Sales Tax Act, 1959 dealers were given an option, under Section 13(2), of paying tax in advance on the basis of monthly returns. Section 13 is relevant and it reads as follows: "13. Advance payment of tax (1) The tax for each year payable under any of the provisions of this Act may be collected in advance during the year in monthly or other prescribed instalments and for this purpose a dealer may be required to furnish within the prescribed period such returns as may be prescribed. The assessing authority may provisionally determine the amount of tax payable in advance during any year or in respect of any period and on such determination and intimation to the dealer he shall pay such tax in such instalments and within such period as may be prescribed. (2) In lieu of the tax provisionally determined under sub-section (1), a dealer may, at his option, pay tax in advance during the year on the basis of his actual turnover for each month or for such other periods as may be prescribed. For this purpose, he may be required to furnish returns showing his actual turnover for each month or other periods as may be prescribed and to pay tax on the basis of such returns. The tax under this sub-section shall become due without any notice of demand to the dealer on the date of receipt of the return or on the last due date as prescribed, whichever is later. (2A). Notwithstanding anything contained in sub-sections (1) or (2), every dealer other than those paying tax under sub-section (2) of section 3D, section 3E or 7E, whose total turnover in the preceding year was not less than ten lakhs of rupees or his taxable turnover was not less than three lakhs of rupees and all dealer newly registered in the year shall pay tax during the year on the basis of his actual turnover for each month or for such other period, as may be prescribed. (3) If no return is submitted by the dealer under sub-section (1) or sub-section (2) within the prescribed period, or if the return submitted by him appears to the assessing authority to be incomplete or incorrect, the assessing authority may, after making such enquiry as it considers necessary, determine the tax payable by the dealer to the best of its judgment: Provided that, before taking action under this sub-section on the ground that the return submitted by the dealer is incomplete or incorrect, the dealer shall be given a reasonable opportunity of proving the correctness or completeness of the return submitted by him. (4) If the assessing authority has reason to believe that the tax determined by it for any period was based on too low a turnover or was made at too low a rate or was based on too high a turnover or was made at too high a rate, it may enhance or reduce, as the case may be, such determination tax: PROVIDED that before making an enhancement of the tax payable as aforesaid, the assessing authority shall, except where such enhancement is based on the turnover finally determined for the preceding year, give a reasonable opportunity to the dealer to show cause against such enhancement and make such enquiry as it may consider necessary. (5) The determination and collection of tax under this section shall be subject to such adjustment as may be prescribed on the completion of final assessment in the manner prescribed." The Appellants were thus filing returns. In these monthly returns they showed their turnover on the basis of minimum price paid by them and paid tax thereon. They indicated the additional price which they had paid as per the advice of the Government but did not include it as part of the turnover and did not pay tax on such additional price. As and when the price, under Clause 5-A, was fixed the Appellants filed a revised return and paid tax on that.;