LexD. PARRY (INDIA) LTD. versus ASSISTANT COMMISSIONER OF COMMERCIAL TAXES, CHENNAI
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A E.l.D. PARRY (INDIA) LTD. v. ASSISTANT COMMISSIONER OF COMMERCIAL TAXES, CHENNAI MAY 3, 2005 B [S.N. VARIAVA, DR. AR. LAKSHMANAN AND S.H. KAPADIA, JJ.] Sugarcane (Control) Order, 1966-Clause 5-A; Tamil Nadu ·General Sales Tax Act, 1959-Sections 13(2), 24(3)-lnterest on non-payment oftax- Sugar producers purchasing sugarcane required to pay a minimum price and C additional price under Clause 5-A which is determinable only at the end of sugar year-Assessee filing monthly return and paying tax on minimum price- After determination of Clause 5-A price, assessee filing revised return and paying tax-Assessing Officer demanding interest on the Clause 5-A price from the date of purchase of sugarcane till payment of tax-Sustainability D of-Held: Clause 5-A price is determinable only at the end of sugar year, thus could not be included in the monthly return-Therefore, monthly return not showing clause 5-A price would neither be incorrect nor incomplete-Interest becomes payable only when the tax demanded, is not paid-Since assessee paid tax even before the final assessment took place, the claim of interest u/ E s.24(3) is not sustainable. By virtue of Clause 3 of Sugarcane (Control) Order, 1966 the sugar producers were required to pay the minimum price of sugar immediately on purchase of sugarcane. In addition, by virtue of Clause 5-A, an additional price was also payable. The determination of additional price F was dependent on the amount (in rupees) of sugar produced during sugar year, which could only be determined at the end of the sugar year and not earlier. In view of this, State Government.advised the sugar producers to pay a price, which was higher than the minimum price. 'Appellants are the sugar producers. In their monthly return, they G showed their turnover on the basis of minimum price paid by them and paid tax thereon. They indicated the additional price, which they had paid as per the advice of the Government but did not include it as part of turnover and did not pay tax on such additional price. When the price under Clause 5-A was fixed the appellants filed a revised return and paid tax on that. Thereafter, assessment order was passed, demanding interest H 1144 - E.l.D. PARRY (INDIA) LTD. v. ASSIST. COMMR OF COMMER. TAXES 1145 under Section 24(3) of Tamil Nadu General Sales Tax Act, 1959 on the A price fixed under Clause 5-A from the date the sugarcane was purchased till the date payment of tax by the appellant. The demand was challenged before the Tribunal which dismissed the same. Writ Petition filed before the High Court was also dismissed. In appeal to this Court, the appellants contended that the price fixed B under Clause 5-A would only be known after it was determined and th~t till the Clause 5-A price was announced it would not be includible in th~ returns; that the advances given as per the advice of the Government are mere ad-hoc payments and that these advances do not constitute price and thus not includible in the monthly turnover of the Appellants; and on a C plain reading of Sections 13 and 24 of the Act, no interest can be levied unless and until an assessment has taken place and a notice of demand has been issued and tax had not been paid within the time specified in the notice of demand. Allowing the appeals, the Court HELD : 1. If the amounts are paid towards the Clause 5-A price, they would be payment towards price and therefore part of turnover even though they may be paid in advance. The Clause 5-A price can only be decided on the basis of a formula prescribed. It cannot be deCided at least D till the end of the s.ugar year. In practice it is however decided much later. E As the price would be unknown, neither the assessee nor the Assessing· Officer could predict what the price would be. Therefore till the price under Clause 5-A is fixed there would be no question of an assessee · including it in the monthly returns filed by him. A monthly return filed , not showing the price fixed under Clause 5-A would therefore, neither be incorrect nor incomplete. It is only after the price under Clause 5-A is , F fixed that the assessee would be required to file a revised return showing ' the price fixed under Clause 5-A as part of his turnover. 11151-D-H; 1152-A, Bl I State ofTamil Nadu v. Kothari Sugars & Chemicals ltd, 1199617 SCC 751, distinguished ,0 U.P. Cooperative Cane Unions Federations v. West U.P. Sugar Mills Associati
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