HIRANYAKESHI SAHAKARI SAKKARE KARKHANE Vs. STATE OF KARNATAKA

JUDGEMENT

(1.) Since common questions of law and facts arise for consideration, these petitions are disposed of by this common order.

(2.) These petitions are filed by the assessee under Section 23(1) of the Karnataka Sales Tax Act, 1957. They relate to different years of assessment. The petitioner is the owner and occupier of a factory where sugar is manufactured out of sugar-cane. It purchased sugar-cane from its members during the relevant assessment years. It paid a certain amount to each of the sugar-cane suppliers depending upon the quantity of sugar-cane supplied by him as 'Khodki charges' for the purpose of keeping the land on which sugar-cane had been grown in good condition. It is not disputed that the suppliers of the sugar-cane were paid at the rate of Re.1 per metric tonne towards Khodki charges in addition to some other amount paid as price. The petitioner was liable to pay sales-tax on the purchase turn-ove(r ,of sugar-cane under Item J1A of Schedule 2 read with Sec.5, (3) (b) of the Karnataka Sajes Tax Act. The assessee claimed that the amoun,t paid by way of Khodki charges could not be included in the taxable turn-over under, the said Act. The Karnataka Sales Tax Appellate Tribunal has negatived its claim and treated the Khodki charges also as part of the taxable turn-over. Hence these petitions.

(3.) The expression 'turn-over' is defined under the Karnataka Sales Tax Act, 1957, as the aggregate amount for which the goods are bought or sold or supplied or distributed by a dealer either directly or through another on his own account or on account of others whether for cash or for deferred payment or valuable consideration. The expression 'total turn-over' means the aggregate turn-over in all goods of a dealer at all places and the expression 'taxable turn-over' means turn-over on which the dealer is liable to pay tax under the Act. Item 11A of Schedule 2 as it stood during the relevant period, required the petitioner to pay tax on the purchase turn-over of sugar-cane as it was the last dealer in the State liable to tax under the said Act. While it. is admitted by the petitioner that Khodki charges had been paid to the persons who had supplied sugar-cane, it is not shown by it that the said amount was paid to the suppliers independently of any contract of purchase of sugar-cane. The petitioner has not placed before us any resolution passed by the members of its Managing Committee or any other bye-law or rules authorising it to pay any amount by way of Khodki charges to the suppliers of sugar-cane. Even the agreements entered into between the suppliers and the petitioner, are not made available to the Court. In this state of evidence, the Tribunal below was not wrong in holding that the amount in question though called as Khodki charges, had been in fact paid as part of the consideration for the sugar-cane supplied to it by the grower. The point of time at which such payment was made or the purpose for which the amount has been used by the seller would be immaterial, as long as the amount is paid in lieu of the sugar-cane supplied by the seller to the petitioner. We are of the view that the amount paid by way of Khodki charges during the several assessment years, in fact, forms part of the price paid by the petitioner to the suppliers and it has been rightly included in the taxable turn-over under the provisions of the Karnataka Sales Tax Act.