ANAND SWARUP MARESH KUMAR versus THE COMMISSIONER OF SALES TAX

Citation: [1981] 1 S.C.R. 707 · Decided: 15-09-1980 · Supreme Court of India · Bench: P.N. BHAGWATI · Disposal: Case Partly allowed

Cited by 1 judgment(s) · cites 1 · see the full citation network in Lexace

Judgment (excerpt)

-r 
ANAND SWARUP MARESH KUMAR 
v. 
THE COMMISSIONER OF SALES TAX 
September 15, 1980 
[P. N. BHAGWATI AND E. S. VENKATARAMIAH JJ.J 
U. P. Sales Tax Act,' 1948, Section 3D & U. P. Krishi Utpadan !lfandi Adlzi-
niyam 1964, Sections 10 and 17 (iii) (b). 
Market fee payable under the Adhiniyam-Cannot be included in the turn-
. over of purchases for assessment of sales tax under the Act. 
Commission (dami) paid by dealer to commission agent-Not being a tax 
or fee but reward for services rendered-To be included in turnover. 
Section 3D of the U. P. Sales Tax Act, 1948 provides for the levy of a 
tax ·On the turnover of purchase of goods by a dealer. Sub-section (4) provides 
that on the issue of a notification under sub-section (1), no tax shall be levied 
under any other section in respect of the goods included in the notification. 
In 1971 section 3F was included in the. Act providing for the levy of additional 
tax on certain dealers. 
The section provides that every dealer liable to pay 
tax under section 3D (among others) whose total turnover exceeds rupees two 
lakhs would in addition to the said tax be liable to pay for that assessment 
year an additional tax at the rates specified therein subject to the other provisions 
of the section. 
Section 10 of the U. P. Krishi Utpadan Adhiniyam, 1964 provides no levy 
or realisation of any trade charges other than those prescribed by rules or bye-
laws made ·under the Adhiniyam in respect of transactions of 5ale or purchase of 
specified agricultural produce. Section 17(iii)(b) empowers the market committee 
to levy market fees and to utilize such market fees collected by it under that 
section for purposes of the Adhiniyam. 
Before the amendment of the provi-
sion by U. P. Act No. 7 of 1978, it specifically provided that market fee payable 
on transactions of sale or purchase of specified agricultural produce in the 
market area should be paid by the purchaser. 
After the amendment which 
was brought into force with retrospective effect from June 12, 1973, market 
fees payable on transactions of sale or purchase of agricultural produce within 
the market area can be realized by the Market Committee from the Commission 
agent who is authorized to realize the same from the purchaser by virtue of 
section J 7(iii)(b)(I). The rules and bye-laws made under the Act also provide 
that a commission agent shall not realise any commission higher than that 
prescribed by law. 
The Sales Tax Officer included the market fee and commission (dami) pay-
able lo the commission agent operating within a market area established under 
A 
B 
c 
F 
the U. P. Krishi Utpadan Mandi Adhiniyam, 1964 in the turnover of purchases 
H 
708 
.D 
SUPREME COURT REPORTS 
[1981] 1 S.C.R. 
of the appellant for the purposes of levy of sales tax under s~ction 30 of 
the U. P. Sales Tax Act, 1948 : On appeal by the appellant the Assistant Com-
missioner (Judicial) Sales Tax upheld lhe order of the Sales Tax Officer. 
In 
an earlier case the High Court upheld the inclusion of the market fee and the 
commission (dami) in the purchases turnover for the purposes of levy of sales 
tax and therefore, the appellant was granted special leave to, appeal to this 
Court directly from the order of the Assistant Commissioner. 
Beforn this Court, it was contended that (i) it was not open to the Assessing 
Authority to demand any additional tax under section 3F in view of the provi-
sions contained in section 3D(4)(ii). 
The market fee paid on transactions of 
sale or purchase of specified agricultural produce in the market area could not 
under the Adhiniyam, be included in the turnover of purchases for the purposes 
of levy of tax under the Sales Tax Act. 
(iii) The commission (dami) payable 
by a purchaser of goods to the comm,ssion agent, being a trade charge could 
not also be included in the turnover o [ purchases. 
; 
HELD : 1. There is no substance in the contention that additional tax levied 
under section 3F could not be levied in respect of turnover of purchases of 
~ 
goods notified under section 3D(l) of the Sales Tax Act. Although, section ~D(4) 
says that in respect of turnover of ipurchases of goods notified under sec-
tion 3D(l), no tax can be levied unde::· any other provisions, section 3F intro-
duced in 1971 provides, that every dealer liable to pay tax under section 3D 
whose total turnover of sales or of purchases, or of both in any assessment 
year exceeds rupees two Jakhs would, ju addition to the said

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