The judgment of the Court was delivered by

JANARTHANAM, J. - Chengalvarayan Go-operative Sugar Mills Limited, Periyasevalai-607 209 (for short, "CCSM Ltd.") is the petitioner, while the State of Tamil Nadu represented by the Deputy Commercial Tax Officer, Full Additional Charge, Thirukoilur is the respondent in all these present tax cases (revisions) - Tax Case Nos. 474 to 478 of 1993. All these tax cases are relatable to the assessment years 1985-86, 1986-87, 1987-88, 1988-89 and 1989-90.

2. Certain statutory provisions governing the procurement of sugarcane, a raw material for the manufacture of sugar and matters allied thereto, besides the factual matrix - we rather feel - may be related here, in order to understand and have a fine grasp, with ease and grace, of the implications of the knotty legal questions - which we may pen down a little later - confronting us for a solution.

3. The Madras Sugar Factories (Control) Act, 1949 (for short, "the MSFC Act") provides for definition of "planting season", by section 2(gg) and "crushing season" by section 2(b).

(a) "Planting season", according to section 2(gg) means, in relation to any local area, such period or periods as may from time to time be notified by the Government in respect of such area.

(b) "Crushing season", according to section 2(b), means the period beginning on 1st November in any year and ending on the 30th June next following.

4. Under section 9, areas are declared by the Sugarcane Commissioner, as reserved areas for the concerned factory.

(a) Under section 10(1)(a) any cane-grower in a reserved area may offer to sell the sugarcane grown by him in the farm, as prescribed under section 10(1)(b). The occupier is required to enter into an agreement for the purchase or sugarcane offered by the grower subject to the proviso to section 10(2). The occupier may refuse to enter into an agreement, if the maximum consumption of the factory is already secured by the agreement.

(b) Under section 11-A, any grower having less than five (5) acres is not required to offer sugarcane.

5. Rule 11(6-A) of the Madras Sugar Factories (Control) Rules, 1949 (for short, "the MSFC Rules") prescribes the form of offer in Appendix IV-A and rule 11(7) prescribes the form of agreement in Appendix V. These visualise purchase and sale of sugarcane at prices fixed statutorily.

6. The Sugarcane (Control) Order, 1966 (for short, "the SC Order") by clauses 3 and 5-A prescribes the payment of minimum and additional prices, which are again determined in accordance with the Schedule to the said order.

7. Reverting to the factual matrix, CCSM Ltd., announced one or more of incentives, such as planting subsidy, chemical subsidy and transport subsidy to the growers during the relevant assessment years. The incentives so offered includible in the purchase turnover and consequently liable to tax, were, however, not disclosed either in the monthly return or in the revised statement filed in any of the relevant assessment years. The Enforcement Wing gathered those particulars and reported the same to the Assessing Officer - Deputy Commercial Tax Officer (FAC) - Full Additional Charge, Thirukoilur.

8. Based on such particulars, the assessing officer, in the light of the decision of the Sales Tax Appellate Tribunal (Additional Bench), Madras in Tax Appeals Nos. 1837 and 1838 of 1986 dated August 10, 1987, in the case of Vellore Co-operative Sugar Mills, upholding the levy of sales tax on subsidies, liable to be taxed at 12 per cent assessed the tax on the escaped turnover relatable to subsidies and also additional sales tax liable to be levied, besides quantifying the penalty to be levied at a prescribed percentage separately for each of the relevant assessment years.

9. Individual notices relatable to the relevant assessment years were issued to CCSM Ltd., requiring it to show cause as to why tax as respects the escaped turnover relatable to subsidies and consequent levy of additional sales tax at a