The main legal point established in the judgment is that the inclusion of harvesting and transportation charges as part of the purchase price depends on the specific facts and circumstances of each case, and the intention of the parties should be considered to determine if the charges should be treated as part of the purchase price.

P. VISHWANATHA SHETTY, J.

( 1 ) IN this Revision Petition filed under Section 23 (1) of the Karnataka Sales Tax Act, 1957 (hereinafter referred to as 'the Act'), the petitioner has called in question the correctness of the order dated 6th February 1998 made in STA No. 587 of 1995 by the Karnataka Appellate tribunal, Bangalore (hereinafter referred to as "the Tribunal" ).

( 2 ) FACTS in brief: the petitioner (hereinafter referred to as "the Assessee") is a Public Limited Company carrying on business in manufacture of Sugar and connected products. The Assessing Officer, negativing the objections raised by the asssessee to the proposition Notice issued by him, made an Order of assessment dated 26th February 1993 for the assessment year 1990-91, confirming the total taxable turnover as proposed in the proposition Notice. Aggrieved by the said order of assessment, the assessee filed Appeal No. 349 of 1992-93 before the Joint Commissioner of commercial Taxes (Appeals), Belgaum (hereinafter referred to the "the First Appellate authority" ). The First Appellate Authority, while partly granting relief to the assessee, negatived the claim of the assessee to the event the Assessing Authority had proceeded to include harvesting and transportation charges as part of purchase price. The assessee, aggrieved by the order passed by the First Appellate Authority, took up the matter in second appeal before the tribunal. The Tribunal, in the impugned Order, confirmed the order passed by the First appellate Authority.

( 3 ) SRI G. V. Shantharaju, learned Senior Counsel appearing for the assessee challenging the correctness of the impugned order submitted that the Tribunal has seriously erred in law in including the harvesting and transportation charges as part of purchase price of sugarcane purchased by the assessee. Elaborating this submission, the learned Counsel pointed out that when the purchase price was fixed between the assessee and the sugarcane suppliers as ex-field price and the assessee, as per the terms of the agreement between the parties, was required to incur the expenditure for harvesting of the sugarcane and transportation of the same to the factory, the Tribunal has seriously erred in law in affirming the finding of the First Appellate authority and the Assessing Authority that the harvesting and transportation charges should be included in the purchase price on the short ground that the sugarcane purchased by the assessee was weighed at the factory premises and the purchase of sugarcane was complete when the sugarcane was delivered at the factory premises and all amounts paid by the assessee to the sugarcane growers prior to delivery of the cane are pre-purchase expenditure; and as such it is required to be included in the purchase price. The learned Counsel further pointed out that the conclusion reached by the Tribunal and subordinate authorities that it is immaterial whether the transportation and harvesting charges were paid by the assessee either to the harvesting agency or to the transport contractor, and the conduct of the grower and purchaser, in the facts of the present case, would be sufficient to establish that all the amounts paid by the assessee was towards consideration of the purchase price. It is also his further submission that the levy of tax under Section 5 (3) (b) of the act is on "taxable turnover" and the "taxable turnover" means the turnover determined on the basis of the purchase price paid/payable by the last purchaser in the state; and any amount spent by the purchaser after purchase of the sugarcane was liable to be deducted out of the total turnover; and it is open to the parties to determine the price either as ex-field price or ex-factory price and in the instant case the price of the sugarcane having been determined as ex-field price, merely because, the sugarcane was required to be weighed on the basis of the total quantity delivered and the price was required to be paid, the Tribunal could not

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