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Hiranyakeshi Sahakari Sakkare Karkhane Niyamit Vs. the State of Karnataka - Court Judgment

LegalCrystal Citation
SubjectSales Tax
CourtKarnataka High Court
Decided On
Case NumberS.T.R.P. Nos. 54 to 57 of 1975
Judge
Reported in[1978]42STC184(Kar)
ActsKarnataka Sales Tax Act, 1957 - Sections 5(3) and 23(1)
AppellantHiranyakeshi Sahakari Sakkare Karkhane Niyamit
RespondentThe State of Karnataka
Appellant AdvocateG. Sarangan, Adv.
Respondent AdvocateS.G. Doddakale Gowda, I Additional High Court Government Adv.
Excerpt:
.....that the possession of lands had been taken much earlier to the issue of preliminary notification. - it paid a certain amount to each of the sugarcane suppliers depending upon the quantity of sugarcane supplied by him as 'khodki charges' for the purpose of keeping the land on which sugarcane had been grown in good condition. 6. in the result, these petitions fail and are dismissed......to each of the sugarcane suppliers depending upon the quantity of sugarcane supplied by him as 'khodki charges' for the purpose of keeping the land on which sugarcane had been grown in good condition. it is not disputed that the suppliers of sugarcane were paid at the rate of re. 1 per metric tonne towards khodki charges in addition to some other amount paid as price. the petitioner was liable to pay sales tax on the purchase turnover of sugarcane under item 11a of schedule 2 (sic) read with section 5(3)(b) of the karnataka sales tax act. the assessee claimed that the amount paid by way of khodki charges could not be included in the taxable turnover under the said act. the karnataka sales tax appellate tribunal has negatived its claim and treated the khodki charges also as part of the.....
Judgment:

Venkataramiah, J.

1. Since common questions of law and facts arise for consideration, these petitions are disposed of by this common order.

2. These petitions are filed by the assessee under section 23(1) of the Karnataka Sales Tax Act, 1975. They relate to different years of assessment.

3. The petitioner is the owner and occupier of a factory where sugar is manufactured out of sugarcane. It purchased sugarcane from its members during the relevant assessment years. It paid a certain amount to each of the sugarcane suppliers depending upon the quantity of sugarcane supplied by him as 'khodki charges' for the purpose of keeping the land on which sugarcane had been grown in good condition. It is not disputed that the suppliers of sugarcane were paid at the rate of Re. 1 per metric tonne towards khodki charges in addition to some other amount paid as price. The petitioner was liable to pay sales tax on the purchase turnover of sugarcane under item 11A of Schedule 2 (sic) read with section 5(3)(b) of the Karnataka Sales Tax Act. The assessee claimed that the amount paid by way of khodki charges could not be included in the taxable turnover under the said Act. The Karnataka Sales Tax Appellate Tribunal has negatived its claim and treated the khodki charges also as part of the taxable turnover. Hence these petitions.

4. The expression 'turnover' is defined under the Karnataka Sales Tax Act, 1957, as the aggregate amount for which the goods are bought or sold or supplied or distributed 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 valuable consideration. The expression 'total turnover' means the aggregate turnover in all goods of a dealer at all places and the expression 'taxable turnover' means turnover on which the dealer is liable to pay tax under the Act. Item 11A of Schedule 2 (sic), as it stood during the relevant period, required the petitioner to pay tax on the purchase turnover of sugarcane as it was the last dealer in the State liable to tax under the said Act. While it is admitted by the petitioner that khodki charges had been paid to the persons who had supplied sugarcane, it is not shown by it that the said amount was paid to the suppliers independently of any contract of purchase of sugarcane. The petitioner has not placed before us any resolution passed by the members of its managing committee or any other bye-law or rules authorising it to pay any amount by way of khodki charges to the suppliers of sugarcane. Even the agreements entered into between the suppliers and the petitioner are not made available to the court. In this state of evidence, the Tribunal below was not wrong in holding that the amount in question, though called as khodki charges, had been in fact paid as part of the consideration for the sugarcane supplied to it by the grower. The point of time at which such payment was made or the purpose for which the amount has been used by the seller would be immaterial, as long as the amount is paid in lieu of the sugarcane supplied by the seller to the petitioner. We are of the view that the amount paid by way of khodki charges during the several assessment years, in fact, forms part of the price paid by the petitioner to the suppliers and it has been rightly included in the taxable turnover under the provisions of the Karnataka Sales Tax Act.

5. The above view receives support from the decision of the Division Bench of this Court in Pandavapura Sahakara Sakkare Kharkhane (P.) Ltd. v. State of Mysore ([1973] 32 S.T.C. 104), though the amounts included in that case in the taxable turnover were not khodki charges but transport and harvesting charges.

6. In the result, these petitions fail and are dismissed. No costs.

7. Petitions dismissed.


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