STATE OF MADRAS Vs. ITALY BAKERY

JUDGEMENT

(1.) THERE appears to be no substance in this petition. The assessees in this case claimed deduction of a turnover of Rs. 1, 62, 749 as relating to accommodation sales. Before the Tribunal, it was contended for the revenue that they were not entitled to deduction as the circumstances in which the supply of bread was made to hospitals other than the Egmore Hospital did not attract rule 6(c) of the Madras General Sales Tax Rules, 1959. The Tribunal declined to accept this contention but confirmed the deduction allowed by the Appellate Assistant Commissioner.

(2.) THE assessees entered into a contract with the Director of Medical Services for the supply of bread to the various Government hospitals in the City at the rate of Re. 0.57 per kilogram. THE Appellate Assistant Commissioner of Commercial Taxes has found that the assessees supplied bread only to the Egmore Hospital from their own stock but supplied bread to the other hospitals by using the stocks from sister concerns in the City and selling them at the same rate at which they had contracted to supply bread to the Government hospitals. In the accounts they showed these transactions as accommodation sales and recorded the names of the sister concerns which supplied bread to the various hospitals. It appears that instead of the assessees taking the bread from the stocks of the sister concerns and supplying the same to the various hospitals, they arranged with the sister concerns to supply bread directly. But that can make no difference to the position that the bread supplied to the various hospitals except the Egmore Hospital was not from the stock of the assessees but from the stocks of the sister concerns.

(3.) THE idea of an accommodation sale is further expanded by rule 6(c) which is as follows :