- (1.) The petitioner in W.P. No. 50189 and 50190 of 2006 are common and the petitioner in W.P. No. 50111 of 2006 is one of the appellants before the Tribunal in which a common order came to be passed by the Tribunal dated 9.9.2005 in T.A. Nos. 101 and 102 of 2001, STA Nos. 907 908 of 2001. Therefore, these Writ Petitions are being disposed of by this common order. For the sake of convenience, we refer to the facts relating to the petitioner in W.P. No. 50189 of 2006.
(2.) The Assessment Order pertains to 1993-94. The assessment was completed on 30.10.1995. The assessment was however revised by an order dated 23.4.1999 under Section 16 of the TNGST Act. The petitioners are Sugar Mills. The petitioner in W.P. No. 50189 OF 2006 own lands, from which sugarcane was procured for crushing, apart from purchasing sugarcane from other growers. It is common ground that by virtue of Section 3 of the Essential Commodities Act and pursuant to the Sugar Control Order, 1966 came into being, the Central Government used to fix the price of the sugarcane to be procured apart from additional price fixed by the State Government. Under the Madras Sugar Factories Control Act (in Act 20/1949) and the Madras Sugar Factories Control Rules, 1949, Cess also became payable on entry of sugarcane into the factory. Such cess levied on the Sugar Mills were to be remitted to the Director of Sugars. The question involved herein is as to whether such cess payable under Act 20/1949 would form part of the sugarcane price and thereby would attract payment of Sales Tax under the provisions of the TNGST Act.
(3.) To appreciate the issue involved, it is worthwhile to refer to Section 2(r) and 3(2) of the TNGST Act read along with Part- E of First Schedule as well as Clause 3 and 5A of Sugarcane control Order and Section 10(2) of Act 20/1949 read along with Section 14 of Madras Sugar Factories Control Act 1949. Section 2(r), Section 3(2) and Entry 22 of Part-E of First Schedule read as under: Section 2(r) ["turnover" means the aggregate amount for which goods are bought or sold, or delivered or supplied or otherwise disposed of in any of the ways referred to in Clause (n), by a dealer] either directly or through another, on his own account or on account of others whether for cash or for deferred payment or other valuable consideration provided that the proceeds of the sale by a person of agricultural or horticultural produce,other than tea, [and rubber (natural rubber latex and all varieties and grades of raw rubber] grown within the State by himself or on any land in which he has an interest whether as owner, usufrcturary mortgagee tenant or otherwise shall be excluded from his turnover; Section 3(2) Subject to the provisions of sub- Section (1), in the case of goods mentioned in the First Schedule, the tax under this Act shall be payable by a dealer at the rate and only at the point specified therein on the turnover in each year relating to such goods: Provided that all spare parts, components and accessories of such goods shall also be taxed at the same rate as that of the goods if such spare parts, components and accessories are not specifically enumerated in the First Schedule and made liable to tax under that Schedule; [Provided further that in the case of goods mentioned in the First Schedule which are taxable at the point of first sale, the tax under this Act shall be payable by the first or earliest of the successive dealers in the State who is liable to tax under this section]. 22. Original Entry From 12-3-1993 Sugarcane excluding sugarcane sets. At the point of 12-03-93 Last Purchase in the State Note: 1. This entry is as per substituted First Schedule to the TNGST Act, 1959 introduced by Act No. 24 of 1993-Tamil Nadu Govt. Gazette. Extraordinary, Part IV, Section 2 dated 28.5.1993-Effective from 12.3.1993. 2. See Item No. 62 of First Schedule existed till 11.3.1993. 3. Reduction in rate of tax payable to eleven per cent on the purchase of sugarcane by the Sugar Mills was notified in G.O.P. No. 88 CT and RE dated 17.3.1993-Notn. No. II(1)/ CTRE/41(b)/93 - Gazettee dated 17.3.1993 Effective from 1.10.1992) Relevant para of Clause 3 and 5 A of the Sugarcane Control order reads as under: 3. Minimum price of sugarcane payable by producer of sugar.-- (1) The Central Government may, after consultation with such authorities, bodies or associations a it may deem fit, by notification in the Official Gazette, from time to time, fix the minimum price of sugarcane to be paid by producers of sugar or their agents for the sugarcane purchased by them, having regard to: (a) the cost of production of sugarcane; (b) the return to the grower from alternative crops and the general trend of prices of agricultural commodities; (c) the availability of sugar to the consumer at a fair price; (d) the price at which sugar produced from sugarcane is sold by producers of sugar; and (e) the recovery of sugar from sugarcane: [Provided, that the Central Government or with the approval of the Central Government, the State Government may, in such circumstances and subject to such conditions as specified in Cl.(3-A), allow a suitable rebate in price so fixed.] 5-A. Additional price for sugarcane purchased on or after 1st October, 1974.-- (1) Where a producer of sugar or his agent purchases sugarcane, from a sugarcane grower during each sugar year, he shall in addition to the minimum sugarcane price, fixed under Clause 3 pay to the sugarcane grower an additional price, if found due in accordance with the provisions of the Second Schedule annexed to this Order. Section 10(2) of Act 20/49 as well as Section 14(1) of the Act framed thereunder are as under: 10 (1).... (2) The occupier of such factory shall enter into an agreement with the growers for the purchase of all sugarcane offered by him in accordance with Sub-section (1); and the agreement shall be in such form shall be executed on or before such date, and shall contain such terms and conditions as may be prescribed: Provided that the occupier may refuse to enter into such an agreement where the sugarcane is offered for delivery during a period in respect of which he has already entered into agreements with growers in the reserved area for the purchase of a quantity of sugarcane equal to the maximum consumption of the factory during such period. 14(1) The Government may, after consulting the Advisory Committee, by notification, levy of a cess not exceeding four annas per standard maund as defined in the Standards of Weight Act, 1939, Levy of Cess on sugarcane brought into any area specified in such notification, for consumption, use or sale therein. Keeping the above provisions in mind, the issue involved has to be examined.;