STATE OF PUNJAB versus M/S. GURANDITTA MAL SHANTI PRAKASH ETC.

Citation: [2004] SUPP. 2 S.C.R. 23 · Decided: 05-05-2004 · Supreme Court of India · Bench: S. RAJENDRA BABU · Disposal: Dismissed
Open in Lexace · Ask the AI about this case
Judgment (excerpt)

ST A TE OF PUNJAB 
A 
V. 
MIS. GURANDITTA MAL SHANTI PRAKASH ETC. 
MAY 5, 2004 
[RAJENDRA BABU, CJ. AND G.P. MATHUR, J.] 
B 
Punjab General Sales Tax Act : 
Levy of purchase tax on marketfee~hallenge to-Allowed by High 
Court-On appeal, Held : Buyer has to pay the marketjee-Seller is not C 
under legal obligation to pay marketjee as he is only required to deposit 
it on behalf of the buyer-Thus market fee could not be considered as part 
of the sale consideration-Hence, Seller has no liability to pay sales tax 
on the element pf market fee-State may amend the relevant provisions in 
f 
the Agricultural Produce Market Committee Act/Sales Tax Act to clarify D 
the law on the subject of levy of purchase tax on the market fee. 
\ 
\ ', 
Words & Phrases : 
'turn over'-Meaning of in the context of Punjab General Sales Tax E 
Act. 
\. 
The question which arose for consideration in these appeals was 
as to whether the purchase tax could be charged on the element of 
market fee on the basis that the same does not part of turnover. 
Dismissing the appeals, the Court 
F 
HELD : Once it held by the High Court that the buyer has an 
obligation to pay the market fee and it is the duty of the seller to deposit 
the market fee on behalf of.the buyer and, therefore, to realize the same G 
from the buyer, it is not the legal obligation of the seller to pay market 
fee on such a transaction and thus the amount of market fee cannot 
be treated as part of the sale consideration. The conclusion thereof by 
the High Court the seller has no liability to pay sales tax on the element 
of market fee is justified. If the law is not clear, it is open to the State H 
23 
/
24 
SUPREME COURT REPORTS [2004) SUPP. 2 S.C.R. 
A to amend the law either with reference to the Agricultural Produce 
Market Committee Act or the Sales Tax Act. 125-G-H; 26-A; C-DI 
B 
Anand Swarup Mahesh Kumar v. The Commissioner of Sales Tax, 
(1980) Vol. 46 Sales Tax Cases 477, referred to. 
CIVIL APPELLATE JURISDICTION : Civil Appeal Nos. 14790-
14803 of 1966. 
From the Judgment and Order dated 20.5.93 of the Punjab and 
Haryana High Court in C.W.P. Nos. 796, 987, 988, 1079, 2352, 2353, 
C 2654, 2917, 2925,. 2926, 2945, 3228, 3231 and 3672 of 1993. 
D 
E 
WITH 
C.A. Nos. 14736, 14810-14816 of 1996. 
A. Sharan, H.M. Singh, Kaushal Yadav, Anil Hooda and R.S. Suri 
for the Appellants. 
P.N. Puri and K.L. Goel for the Respondents. 
The Judgment oft.he Court was delivered by 
RAJENDRA BABU, CJ. : In this case the question raised for 
consideration is whether purchase tax can be charged on the element of 
F market fee on the basis that the same does not form part of the turnover. 
Writ petitions filed by Respondents in the High Court have ended in 
their favour. Hence these appeals by special leave. 
Under the Punjab General Sales Tax Act 'turnover' is defined to 
G include 'the aggregate of the amounts of sales and purchase and parts of 
sales and purchases actually made by any dealer during the given period 
less any sum allowed as cash discount and trade discount according to 
ordinary trade practice, but does not include any sum charged for anything 
dont by the dealer in respect of the goods at the tinfe or or before delivery 
H thereof'. 
\ 
STATE v. GURANDITTA MAL SHANTI PRAKASH [RAJENDRA BABU, CJ.] 25 
Interpreting this provision with reference to the Marketing Regulations, A 
the High Court noticed that the incidence of tax in the present cases is when 
the turnover exceeds the taxable quantum, the buyer has to pay market fee 
as the appellants are licensees within the market area; that such market fee 
is not paid by them to the sellers; that therefore such amount of the market 
fee cannot be part of the sale consideration; that the appellants were not B 
required to show in their turnover the amount of the market fee as part of 
the purchase price of such of the agricultural produce purchased by them 
locally; that such market fee is not to form part of the turnover for 
assessment or payment of purchase tax. 
This Court in Aliand Swarup Mahesh Kumar v. The Commissioner C 
of Sales Tax, 1980 Vol. 46 Sales Tax Cases 477, had occasion to consider 
whether additional tax on certain dealers levied on turnover of purchases 
mentioned in Sectio.n 3-0(1) of the U.P. Krishi Utpadan Mandi Adhiniyam, 
1964 collected from purchases by common agent can be included in the 
turnover of purchases. This Court explained that there are four circumstances D 
in which turnover could be i
Excerpt shown. Read the full judgment & AI analysis in Lexace.