Transport charges paid by sugar mills on behalf of sugarcane growers are not part of the purchase price of sugarcane and cannot be deducted from the purchase turnover.

RATNAM, J.

These tax revision cases, though preferred by two different assessees under section 38 of the Tamil Nadu General Sales Tax Act, 1959 (hereinafter referred to as the Act), are dealt with together as they arise out of a common order of the Tribunal and a common question also arises for decision. Tax (Revision) Cases Nos. 101 and 102 of 1978 relate of Kallakurichi Co-operative Sugar Mills Limited, while tax (Revision) Cases Nos. 579 and 580 of 1978 are at the instance on Madurantakam Co-operative Sugar Mills Ltd. These four cases relate to the assessment years 1973-74 and 1974-75 in respect of both the sugar mills. Tax (Revision) Case No. 581 of 1978 is in respect of the assessment under the Additional Sales Tax Act for the assessment year 1974-75 in relation to Madurantakam Co-operative Sugar Mills Ltd.

2. The common question for decision in these cases is whether the turnover referable to the payment of transport charges is eligible for deduction from the purchase turnover of the petitioners. The petitioners are co-operative sugar mills. They purchase sugarcane from the growers for the purpose of manufacturing sugar therefrom. The minimum price payable for the purchase of sugarcane by the sugar mills is fixed by the Government of India under the Sugarcane Control Order, 1966. Considering the representations made by the cane growers and after consulting the sugar factories and the growers as well, the State Government fixes a higher price also. In these cases, the two sugar mills entered into agreements for the supply of sugarcane with sugarcane growers. One of the terms in the agreement was that the sugarcane grower should deliver the sugarcane at the mill or factory premises for the price fixed by the Government. Some of the growers, who had so contracted to supply sugarcane grown by them, had transport facilities, while, many others did not command such facilities. In such cases, where the sugarcane grower did not have transport facilities the sugar mills or factories sent lorries to the sugarcane growers and brought the sugarcane to the mills or the factories. In all such cases, the petitioners deducted the transport charges from the statutory price payable to the sugarcane growers in respect of the sugarcane supplied by them. In the course of the assessment proceedings for the years 1973-74 and 1974-75, the petitioners claimed exemption from the purchase turnover of the transport charges so deducted by the petitioners from out of the amounts payable to the sugarcane growers computed in accordance with the price fixed by the Government. The assessing as well as the appellate authorities were of the view that the purchase price of sugarcane was fixed by the Central and State Government from time to time and the purchase turnover was worked out with reference to the quantity and price per metric ton as fixed by the Government, though the mills were at liberty to recover the transport charges incurred by them from the sugarcane growers. In this view, the mills or the factories were held not entitled to reduce the cane price fixed by the Government statutorily by deducting the amounts incurred by the mills or factories for making transport arrangements for the sugarcane growers. On further appeal to the Tribunal, on a consideration of the applications made by the sugarcane growers for registration and also the agreements entered into by them with the mills or the factories, the Tribunal found that the sugarcane grower was responsible for the delivery of sugarcane in the mill or the factory premises, that that agreement was not in any manner modified or otherwise deviated from, that the mills or factories merely lend a helping hand to the sugarcane growers by providing lorries and deducting the hire or transport charges at the time of payment of the purchase price, that the process of billing employed by the sugar mills or the factories recognised the statutory price as the purchase price of the sugarcane and