Additional amounts paid by the assessee towards harvesting and transportation charges are considered part of the turnover and are liable to tax.

( 1 ) THESE are three revision petitions preferred by a common assessee under section 23 of the mysore Sales Tax Act, 1957, hereinafter called the Act. The common question raised in these petitions is, whether the amount paid by the assessee to growers of sugarcane as harvesting and transportation charges forms part of the purchase turnover liable to tax under the Act.

( 2 ) THE assessee manufactures sugar in its factory, and for consumption in its factory purchase sugarcane from cane growers. The minimum purchase price of sugarcane has been fixed by the central Government by its order dated 21st April, 1961, issued under the Sugarcane (Control)Order, 1956. The assessee entered into agreements with sugarcane growers for purchase of sugarcane at the minimum price fixed by the order of the Central Government. Under the said agreements, the growers were to deliver their sugarcane, f. o. r. the factory premises. As an inducement to the growers to supply more sugarcane, the assessee promised to pay, in addition to the minimum price agreed upon, the harvesting and transportation charges at the rate of four paise per quintal.

( 3 ) PAYMENTS made by the assessee to the growers on account on account of harvesting and transportation charges for the three years in question are as follows : (1) For the year 1961-62 Rs. 3,22,953. 96 (2) For the year 1962-63 Rs. 5,90,847. 57 (3) For the year 1963-64 Rs. 7,87,876. 05 total Rs. 17,01,677. 58

( 4 ) THE assessing authority included the aforesaid amounts in the taxable turnover of the assessee and levied purchase tax. Under the Act, tax on sugarcane is levied at the purchase point on the purchase turnover. The assessee's appeals before the Deputy Commissioner of Commercial taxes and also before the Mysore Sales Tax Appellate Tribunal were unsuccessful.

( 5 ) BEFORE us, Sri K. Srinivasan, the learned counsel for the assessee, raise the same contention as before the Tribunal. His contention was that the additional payments made by the assessee by way of harvesting and transportation charges to the growers were merely ex gratia payments and those payments were made during the years in question only to give an incentive to the growers to regularly supply cane to the assessee's factory and that the said amounts do not and can cannot form part of the purchase price. In support of his contention, the learned counsel relied on the decision in The State of Orissa v. Utkal Distributors (P.) Ltd. AIR1966 sc 1170 , [1966 ]3 SCR55 , [1966 ]17 STC320 (SC ). In the said case the assessee was a controlled stock-holder of iron and steel under the Iron and Steel Control Order, 1956, and as such it was not entitled to charge a price higher than the price fixed by the Government of India. A notification of the Central Government dated 18th October, 1958, issued under the said Order further provided that

"the customer shall pay to the controlled stock-holder the Central sales tax incurred by the controlled stock-holder in obtaining the material and also pay such additional central sales tax, if any, incurred on the sale to the customer".

It was held by the Supreme Court that

"the Central sales tax paid by the assessee at the time of purchase and realised from the customers under the provisions of the aforesaid notification did not form part of the price paid by the customers to the assessee, as the valuable consideration for the sale was only the price fixed by the Government".

The facts of the said case, in our opinion, are clearly distinguishable from the instant case. In the Utkal Distributors' case AIR1966 SC 1170 , [1966 ]3 SCR55 , [1966 ]17 STC320 (SC ), the maximum price had been fixed by the government of India under the Iron and Steel Control Order, 1956. By a subsequent notification it was provided that "the customer shall pay to the controlled stock-holder the Central sales tax incurred by the controlled stock-holder in obtaining the material and also pay such additional central sales