A J C ESTATES Vs. COFFEE BOARD

JUDGEMENT

(1.) THE appellants are the coffee growers from the State of Tamil Nadu and they filed the writ petitions Nos. 2153 to 2169 of 1995 calling in question the power of the Coffee Board to deduct purchase tax at the rate over and above what is prescribed by the Government of Tamil Nadu while fixing the price of the coffee payable to the growers of coffee in the State of Tamil Nadu. The appellants have prayed for the following reliefs in the writ petitions :

(2.) THE facts of the case in brief are as follows : the appellants are conglomerate of the estates known under the generic name of Silver Cloud tea Estate. The appellants grow both coffee and tea in their estates situated at Gudalur in the nilgiris district. The appellants have been selling the coffee grown in their estates to the Coffee board as per the provisions of the Coffee Act, 1942 (for short, "the Act" ). The appellants had been pooling coffee with the Coffee Board under the name Silver Cloud Estates from 1974/75 to june 30, 1980 and they had also been pooling coffee under the name Chikmoyar Estates syndicate from 1974 to 1980/81. Both these above mentioned estates were partnership firms. Further, both these estates are situated in the State of Tamil Nadu. From June 3, 1981 as per a deed of dissolution, the partners have been pooling coffee in their individual names. The Coffee board, the respondent herein, has been deducing purchase tax at the rate over and above what is prescribed by the State of Tamil Nadu under the provisions of Tamil Nadu General Sales Tax act. According to appellants, under the Tamil Nadu Act, purchase tax is levied at the rate of 4 per cent on coffee whereas purchase tax leviable under the Karnataka General Sales Tax is at the rate of 11 per cent and it is 8 per cent in the State of Kerala. Therefore, according to the appellants the respondent-Coffee Board's action in deducting purchase tax at a uniform rate regardless of the different rates prevailing in different States is unconstitutional, arbitrary and violative of article 14 of the Constitution. The appellants have contended that the Coffee Board being a statutory authority under the Act is a "state" for the purpose of article 12 of the constitution and therefore, its action should be in conformity with the postulates of article 14 of the Constitution.

(3.) THE respondent-Board, opposing the writ petition, has filed a detailed statement of objections. In the statement of objections, it is contended by the Coffee Board that irrespective of quantum of coffee grown in different States, the rate of price ultimately paid to the growers throughout india is one and the same. The Board has contended that having taken into consideration all the aspects of the matter, a policy decision to pay uniform price to the growers has been taken by the board after deducting the overheads. It is also contended by the Board in its statement of objection that the allegation of the appellant that the Board is deducting purchase tax at a rate over and above the rate prevailing in the State of Tamil Nadu is totally misconceived allegation and that the Board is not an authority to deduct tax at any rate under the provisions of the Tamil nadu General Sales Tax Act. It is also contended by the Board that purchase tax is leviable on the Board and not on the growers of the coffee and the liability of the Board to pay the purchase tax is met by the Board from and out of the "pool fund" created under section 32 of the Act.