Jeevan Reddi, J.
1. Two questions are urged by Mr. P. Venkatarama Reddy, the learned counsel for the assessees, in this batch of tax revision cases, viz., (i) that, there is no sale of abnus leaves in favour of the assessees, so as to make them last purchasers of the goods; and (ii) that the collection charges paid by the assessees cannot be included in their turnover.
2. All the assessee-petitioners herein are purchasers of beedi leaves, who had entered into agreements with the Government of Andhra Pradesh, in the prescribed form, for purchasing the abnus leaves collected from the various units in the State. The assessment years concerned herein are 1974-75 and 1975-76. The trade in abnus leaves in this State is regulated by the Andhra Pradesh Minor Forest Produce (Regulation of Trade) Act, 1971, and the Andhra Pradesh Minor Forest Produce (Regulation of Trade in Abnus Leaves) Rules, 1970. The provisions of the Andhra Pradesh Forest Act are also made applicable in certain respects. The entire State is divided into various units for this purpose, and agents are appointed by the Government for collecting the leaves, and bringing them to the several points specified in each unit. Simultaneously with the appointment of agents, tenders are called for, for purchase of the abnus leaves so collected in each unit. The purchasers have to take delivery of the abnus leaves from the collection-depots. From the collection-depots the abnus leaves are transported to approved godowns. Of course, the purchasers are entitled to remove the abnus leaves straight from the collection-point also, in case they pay the requisite amount. This is the broad scheme, and we shall refer to the particular clauses in the agreement, presently.
3. So far as the first point urged by Mr. P. Venkatarama Reddy in concerned, he fairly conceded that, in view of the decision the Supreme Court in State of M.P. v. Orient Paper Mills Ltd. : 2SCR149 his contention is of no avail. It is, therefore, not necessary for us to deal with this contention at any length.
4. Mr. Venkatarama Reddy, however, strongly pressed his second contention for our acceptance. His contention is that, thought the agreement between the purchasers and the Government is one, it is really two agreements rolled into one, viz., one relating to the value/price of the abnus leaves payable to the Government and the other relating to the payment of collection charges payable to the agents appointed by the Government. He submitted that in view of the fact that they are separately paid, and the several causes in the agreement do make a definite and clear distinction between what is called a 'royalty' and the 'collection charges', it must be held that the collection charges which are paid separately do not constitute the consideration for the sale of abnus leaves in the assessee' favour. We are unable to accede to this contention. For a proper appreciation of the contention urged by Mr. Venkatarama Reddy, it is necessary to notice the several clauses in the agreement entered into between the assessees and the Government.
5. The form of agreement is prescribed by the aforesaid Rules. Apart from the preliminary/introductory recitals, there are as many as 26 clauses in the agreement, mentioned under alphabets A to Z, each clause containing a sub-heading. Many of the clauses are again divided into several sub-clauses. We shall refer to these clauses which are relevant for the present purpose, and have been relied upon before us by either of the counsel. Clause (A) under the sub-heading 'of abnus leaf to be purchased', it is provided that 'the purchaser (which expression refers to the assessees herein) shall purchase in raw form and without being bagged all the abnus leaves purchased/collected in the unit by the Government or its officers or agents ....'. It is necessary to clarify the expression 'purchased/collected' in the above sentence. In every unit, there are Government lands, as well as patta lands, wherein abnus leaves are available. So far as the Government lands are concerned, the agent of the Government merely plucks them and brings them to the collection-point. But, in so far as the abnus leaves in patta lands are concerned, the agent has to purchase them from the pattadar on paying the appropriate consideration to him. The purchase (assessee) is obliged to purchase all the beedi leaf that is brought to the collection-point by the agent.
6. Clause (B) carries the sub-heading 'of the sale amount'. Sub-clause (1) says 'the purchaser shall pay sale amount at the tendered rate, namely Rs. .............. per standard bag for the quantity of abnus leaf purchased/collected by the agent and delivered to him up to number of bags specified against the unit in the tender notice ............'. Sub-clause (2) provides that, for the number of bags over and above the number specified against the unit in the tender notice, the purchaser shall be entitled to pay the tendered rate minus 25 per cent of the royalty component thereof. Sub-clause (3) says 'the royalty component of the tendered rate shall be arrived at by deducting the cost of collection fixed for the Government lands for the unit, handling, pruning and remuneration charges to be paid to the agent from the tendered rate.' Sub-clause (4) says that the sale amount mentioned in the various sub-clauses of clause (B) shall be exclusive of sales tax. Clause (D), sub-clause (1), says 'on payment of the sale amount as specified in clause (K) below, the purchaser shall taken delivery of abnus leaves at the collection-depot or at such other places mentioned in the Second Scheduled ......'. For this purpose, the purchaser is obliged to keep a representative of his at each collection-depot to take delivery of the leaves. Clauses (K) carries the sub-heading 'of payment of sale amount'. This clause is quite relevant for the present purpose, and may be set out in full :
'(K) Of payment of sale amount :- (1) The purchaser has paid Rs. ........... (Rupees ............. only) which is 5 per cent of the royalty for ........... bags, i.e., the number of bags notified against the unit in the list annexed to the tender notice, before the execution of the agreement where royalty is the tendered rate, less cost of collection fixed for the unit, remuneration and handling and pruning charges to be paid to the agent. Another 5 per cent of the royalty shall be paid before the commencement of the actual collection or by 31st March, 1975, whichever is earlier.
(2) the balance of the purchase amount shall be paid as follows :-
(a) Payment to be made in cash to the Range Officer before taking delivery of the abnus leaves.
The purchaser shall pay to the Range Officer Rs. .... Rupees .... only) which is the cost of collection of abnus leaves fixed for the unit and Rs. 3 (Rupees three only) which is the cost of handling to be paid to the agent for every bag to be taken delivery of by the purchaser, before taking delivery of the same and obtain receipt for the same from the Range Officer.
(b) Payment to be made by remittance to the treasury. (i) Payments to be made for the removal of abnus leaves for export or utilisation during the collection season, i.e., from the date of agreement to 30th June, 1975. The purchaser shall pay the balance of the sale amount for the number of bags that he will remove either directly from the depots or from the approved godowns before making such removals, provided that the payments shall be for and removals shall be in quantities of five standard bags or more at a time. (ii) The purchaser shall transport the remaining quantity of abnus leaves taken delivery of by him in the unit to godowns approved by the Divisional Forest Officer, as detailed in item (L) below for storage. However, the Divisional Forest Officer may permit the purchaser to transport and stock the material in uninsured godowns up to the end of the collection season at the risk and loss of the purchaser. (iii) The balance of the sale amount for the quantity of abnus leaves delivered to the purchaser shall be paid by the purchaser in the three equal monthly instalments as follows :- ------------------------------------------------------------------------Instalment Due Date First instalment ... 15th October, 1975.Second instalment ... 15th November, 1975.Third instalment ... 15th December, 1975. ------------------------------------------------------------------------ (iv) Each time the purchaser makes the payment of the instalment detailed above, he would usually become entitled to 1/3rd of the quantity of the leaves kept in the godowns under the provisions of this condition. However, on payment of the instalments, it shall be open to the Divisional Forest Officer to release a quantity less than 1/3rd of the quantity kept in the godown, taking the prevailing market value of abnus leaves into consideration. (v) If a purchaser desires to remove any quantity of abnus leaves before the due date of an instalment mentioned in sub-clause (2)(b)(iii) above, the Divisional Forest Officer may permit such removals on payment of the sale amount pertaining to that quantity or such higher amount as the Divisional Forest Officer may decide. However, such removals shall be in quantities of 5 standard bags or more at a time.'
Clause (L) provides for location and other matters relating to godowns.
7. Now, from a reading of the above clauses, and in particular, clauses (K) and (B), it is abundantly clear that what is called 'purchase amount' [see clause (K)(2)] comprises of both royalty, and the collection charges. Clause (K)(1) defines what royalty is. It says that royalty means 'the tendered rate, less cost of collection fixed for the unit, remuneration and handing and pruning charges to be paid to the agent.' The collection charges are notified for each year. These collection charges have to be paid by the purchaser, to the Range Officer. (Apart from these collection charges, the purchaser has to pay Rs. 3 to the agent on account of handling charges, but with which charges we are not concerned herein). The collection charges have to be paid by the purchaser to the Range Officer before taking delivery of the bags from the collection-depot. But, so far as royalty is concerned, it has to be remitted into the treasury [see clause (K)(2)(b)]. Clause (K)(2)(b) makes it clear that, ordinarily, the leaves have to be transported from the collection-depots to approved godowns, and stocked there. The royalty is payable in three equal instalments on specified dates. On payment of each of the instalments, the purchaser is entitled to remove the proportionate quantity from the approved godown for sale or consumption, as the case may be. If, however, the purchaser wants to remove any quantity at an earlier point of time, he is permitted to do so provided he pays the proportionate royalty. Clause (K)(2)(b), however, further entitles the purchaser to remove any particular quantity of leaves, directly from the collection-depots on payment of the appropriate royalty amount. This is the scheme evidenced by the agreement. Clause (B)(4) makes it clear that the sale amount mentioned in the agreement is exclusive of sales tax - and the sales tax on beedi leaves is levied at the last purchase point in the State (see entry 18 in Schedule II to the Act).
8. In the face of the above clauses, it is idle to contend that the royalty alone constitutes the value/price of the leaves sold by the Government to the purchaser and that, the collection charges are separate and distinct. Such an argument runs counter to the express language of the agreement. The agreement expressly says that the purchase amount comprises of both royalty and collection charges. In fact, the agreement, at more than one place, uses the expression 'royalty component'. The expressions 'tendered rate', 'sales amount' and 'purchase amount' are used interchangeably. Admittedly, both royalty, as well as the collection charges are paid to the Government. The mere fact that these two amounts are paid on separate occasions, cannot make any difference to the fact that they together constitute the 'purchase amount', of the 'sale amount', as it is referred to. The collection charges have to be paid to the Range Officer before removing the abnus leaves from the collection-depots, while the royalty has to be paid in the manner prescribed in clause (K)(1) and clause (k)(2)(b)(iii), i.e., 10 per cent has to be paid before the commencement of the actual collection, and the remaining amount in three instalments.
9. We may also, in this connection, refer to the definition of 'turnover' in section 2(1)(s) of the Andhra Pradesh General Sales Tax Act. In so far as it is relevant it reads :
'Turnover' means the total amount set out in the bill of sale (or if there is no bill of sale, the total amount charged) as the consideration for the sale or purchase of goods (whether such consideration be cash, deferred payment or any other thing of value) including any sums charged by the dealer for anything done in respect of goods sold at the time of or before the delivery of the goods and any other sums charged by the dealer, whatever be the description, name or object thereof ....'
10. Rule 5(2) says that, in respect of certain goods, including beedi leaves, 'the turnover of a dealer for the purposes of these Rules shall be the total amount payable by the dealer as the consideration for the purchase of the goods.' While considering a similar definition of 'sale price' in the Rajasthan Sales Tax Act of 1954, the definition of 'sale price' was in the following words :
'... The amount payable to a dealer as consideration for the sale of any goods, less any sum allowed as cash discount according to the practice normally prevailing in the trade, but inclusive of any sum charged for anything done by the dealer in respect of the goods at the time of or before the delivery thereof other than the cost of freight or delivery or the cost of installation in case where such cost is separately charged',
The Supreme Court in Hindustan Sugar Mills Ltd. v. State of Rajasthan : 1SCR276 observed :
'This definition is in two parts. The first part says that 'sale price' means the amount payable to a dealer as consideration for the sale of any goods. Here, the concept of real price or actual price retainable by the dealer is irrelevant. The test is, what is the consideration passing from the purchaser to the dealer for the sale of the goods. It is immaterial to enquire as to how the amount of consideration is made up, whether it includes excise duty or sales tax or freight. The only relevant question to ask is as to what is the amount payable by the purchaser to the dealer as consideration for the sale and not as to what is the net consideration retainable by the dealer.'
11. These observation are a complete answer to the contention urged by Mr. Venkatarama Reddy. What is relevant from the assessee's point of view is 'what is the amount payable by him to the Government as consideration for the abnus leave; and not what is the net consideration, viz., royalty retainable by the Government'. It is equally immaterial for the purchaser to enquire as to how the sale price, or the purchase price is made up, and what are its components. It is equally immaterial from the point of view of the purchaser, whether the collection charges are paid over to the agent, or whether they are retained by the Government. So far as the purchaser is concerned, he pays the collection charges as well to the Government. For these reasons, it must be held that the collection charges form part of the purchase amount, and have been rightly included in the turnover of the assessees.
12. Mr. Venkatarama Reddy relied upon the decision in Board of Revenue v. A. M. Ansari : 3SCR661 in support of his contention, but we find that this decision is of no assistance to him. The question which the Supreme Court considered in the said case, was whether the document executed between the parties thereto was a lease or a licence. We are unable to see any relevance between the principle of that decision, and the principle involved herein.
13. Mr. P. Venkatarama Reddy further contended that, so far as T.R.C. No. 143 of 1978 is concerned, the Tribunal has found that the collection charges were paid directly to the agent, and not to the Government and that, in this case, in any event, it must be held that the collection charges do not constitute a part and parcel of the sale price, or purchase price, as it may be called. He relied upon the decision of the Supreme Court in McDowell & Co. Ltd. v. Commercial Tax Officer : 1SCR914 . We are equally unable to agree with this contention. The agent to whom this amount was paid, was the agent of the Government, appointed by the Government. The mere fact that instead of paying to the Range Officer the petitioner herein paid to the agent and it was treated as a payment to the Range Officer, does not make the said payment any-the-less a payment to the Government. If Mr. Venkatarama Reddy's contention is accepted, it would follow that the petitioner has not paid the collection charges to the Government as required by the agreement, in which case it would be open to the Government to claim the said amount. Indeed, the removal of abnus leaves without paying the collection charges to the Government would be illegal and unauthorised. In an event, as we have pointed out earlier, the agent to who the petitioner paid the collection charges is equally the agent of the Government and therefore, the payment constitutes a payment to the Government. The case in McDowell & Co. Ltd. v. Commercial Tax Officer : 1SCR914 was an altogether different case, where the excise duty on liquor was directly remitted by the purchaser into the Government treasury, and the liquor was removed from the manufacturer's godown on paying the price of the liquor. In these facts, the Supreme Court held that the excise duty does not form part of the turnover of the manufacturer.
14. For the above reasons, these tax revision cases fail and are accordingly dismissed; but, in the circumstances of the case, there shall be no order as to costs. Advocate's fees Rs. 125 in each tax revision case.