Shri Halasiddanath Sahakari Sakkare Karkhane Limited, Nippani vs State of Karnataka

Y. Bhaskar Rao, Actg. C.J.-This revision petition is filed assailing the order of the Sales Tax Appellate Tribunal confirming the order of the Assessing Authority.

The brief facts of the case are, that the petitioner is a Co-operative Sugar Factory registered under the Karnataka Sales Tax Act, 1957 (in short, ''the Act'') carrying on business under the name and style of Halasiddanath Sahakari Sakkare Karkhane having business place at Village-Yamgarni and Kodani near Nippani. For the year 1990-91, the petitioner declared a total turnover of Rs. 12,09,04,745-50 p. and taxable turnover of Rs. 18,00,869-56 p. The petitioner had claimed an exemption towards transport charges and harvesting charges amounting to Rs. 1,71,01,896-32 p. on the ground that the sugarcane price is fixed as ex-field and the factory, as the petitioner made its own arrangement for harvesting and transporting. Therefore, expenses incurred towards harvesting and exporting cannot be included. The Assessing Authority did not accept the same. Therefore, the petitioner filed an appeal. The Appellate Authority dismissed the appeal. Against that present revision petition is filed.

Learned Counsel for the petitioner contended that, the transport charges and harvesting charges are paid to the Cane Growers and that cannot be included in the turnover. No original copy of the agreement is produced to show that there is an agreement that, the harvesting charges and transport charges are part and parcel of the purchase price. The sugar-cane is purchased at the factory gate after weighing at and price paid. Therefore, on the basis of it, the contention that there was an agreement for paying the harvesting charges and transport charges is not tenable. Even taking for the sake of arguments that actually the petitioner has incurred such expenditure, it amounts to be a part of purchase price, because for the purpose of purchase, they are incurring this expenditure. Therefore, it is a part of the turnover. The transport charges and harvesting charges cannot be separated from the total purchase price, just because it is paid separately. This view is also confirmed by the judgment in Bhikari Das v Commissioner of Sales Tax, (1986)62 STC 206 (All.), by the High Court of Allahabad. The decision in Pandavapura Sahakara Sakkare Kharkhane Niyamit v State of Mysore, (1973)32 STC 104 (Mys.), has clearly held that freight and harvesting charges are part of the purchase price. So also in case of the Perambalur Sugar Mills Limited v State of Tamil Nadu, (1992)86 STC 17 (Mad.).

In view of the above, we do not find any merits in the revision petition.

Accordingly, this revision petition is dismissed.