DEPUTY COMMISSIONER OF COMMERCIAL TAXES TIRUCHIRAPALLI DIVISION Vs. NORTH ARCOT DISTRICT CO OPERATIVE SUGAR MILLS LIMITED

JUDGEMENT

(1.) THE respondent in both these cases is the North Arcot district Co-operative Sugar Mills Limited, hereinafter called the mills. THE first case relates to the assessment year 1965-66, while the second relates to the assessment year 1968-69. For the assessment year 1965-66, the mills were assessed under the Madras General Sales Tax Act, 1959, on their sales of fertilisers to cane-growers, amounting to Rs. 5, 13, 311. 36 and for the assessment year 1968-69 they were assessed not only on their sales of fertilisers amounting to Rs. 12, 94, 284. 46 but also on their sales of press-mud for Rs. 3, 135. 77. THE mills disputed their liability to pay sales tax on their sales of fertilisers and press-mud. THE assessing authority had overruled the objection of the mills. THE Appellate Assistant Commissioner on appeal upheld the levy of tax on the sales of fertilisers during the assessment year 1965-66. But for the assessment year 1968-69 he has set aside the assessment on the sale value of fertilisers but upheld the assessment so far as it related to sales of press-mud. When the assessments came up before the Tribunal, the State filed an application for enhancement of the assessment for the year 1968-69 as regards the sales of fertilisers. THE Tribunal considered that the assessments both in respect of the sales of fertilisers as also press-mud are invalid. THE reason given by the Tribunal is that though the mills have actually sold fertilisers and press-mud to the cane-growers, those sales cannot be brought to charge, as the mills are not dealers in fertilisers and press-mud and that, therefore, the transactions of sales of fertilisers and press-mud cannot be brought to charge. Aggrieved against the decision of the Tribunal, the revenue has come to this court. Before us the learned Government Pleader contends that though the tribunal came to the right conclusion when it said that there have been sales of fertilisers and press-mud to the cane-growers by the mills, it went wrong in holding that the mills were not "dealers" as defined in the Act in these articles and that, therefore, the sales are not liable to be taxed. It is pointed out by the revenue that once the impugned transactions of supplies of the fertilisers and press-mud by the mills to the cane-growers are treated as sales, then on the principle enunciated by the Supreme Court in State of Tamil nadu v. Burmah Shell Company Ltd. those sales have to be brought to charge as the sales of fertilisers and press-mud are in the course of the mills'main business of manufacturing sugar and that it is not necessary that the mills should carry on a separate business either in fertilisers or press-mud for making the transactions of sale taxable.

(2.) THE Tribunal has specifically found that the mills have regularly purchased fertilisers of different kinds such as ammonium sulphate, potash, urea, bone-meal, sulphur phosphate and deoiled cake, and manufactured a new manure mixture by mixing the various kinds of fertilisers purchased by them in a fixed proportion as advised by the Director of Agriculture and supplied the said mixture to the cane-growers who happen to be the members of the society, which runs the mills. THE said supplies made to the cane-growers had been shown in the mills'accounts as sales effected by the society. It is on these facts the Tribunal held that there were actual sales of the manure mixture by the mills to the cane-growers.