TMI Blog1974 (4) TMI 80X X X X Extracts X X X X X X X X Extracts X X X X ..... f 1973 and that concerns the legality of the levy of sales tax on the turnover relating to the disposal by the Food Corporation of damaged foodgrains. 2. Even as early as in 1944 a scheme for ensuring fair and equitable distribution of fertilisers had been formulated and brought into force by the Government of India by letter No. F. 42-12/43-P dated 13th March, 1944. Subsequently, by a notification dated 29th March, 1957, issued by the Central Government in exercise of the power conferred by sub-clause (xi), clause (a), of section 2 of the Essential Commodities Act, 1955, fertilisers were declared to be an essential commodity for the purpose of the said Act. Thereafter, on 23rd April, 1957, the Fertiliser (Control) Order, 1957, was prom ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ale " and that hence the turnover in question was not liable to be taxed was rejected by the assessing authority. On appeals filed by the Food Corporation of India to the Appellate Assistant Commissioner of Agricultural Income-tax and Sales Tax, Ernakulam, the assessments were confirmed. The assessee thereupon filed four second appeals before the Kerala Sales Tax Appellate Tribunal and they were disposed of by the Tribunal under a common order dated 16th June, 1973, whereby the Tribunal after an elaborate consideration of the contentions put forward by the assessee held that the transactions in question clearly amounted to "sales" and were taxable as such under the Act. The Tribunal also held that there was no merit in the objection raised ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... supply or distribution of the goods need not be in the course of business and hence the existence or otherwise of a profit-motive is of no material relevance. The Tribunal was, therefore, right in holding that the petitioner was a "dealer" in respect of the transactions of distribution of fertilisers. 5.. That takes us to the more important question as to whether the supply and distribution of fertilisers effected by the petitioner to the State Government and their nominees constituted "sales" so as to attract liability to sales tax under the Act. It was argued on behalf of the petitioner that the Government of India in carrying out the distribution of fertilisers through the agency of the petitioner is only discharging a statutory oblig ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ed examination of the provisions of the Sugar and Sugar Products Control Order, 1946, it was found by the Supreme Court that, in complying with the allotment orders passed by the Controller, there was no scope at all for the exercise of any volition by the assessees and that the elements of offer and acceptance that are necessary for the formation of a contract were totally absent. It was in those circumstances that the Supreme Court held that the despatches of sugar by the assessees pursuant to the directions of the Sugar Controller were not the result of any contract of sale and that hence there was no sale in the eye of law. The question that arose for decision before the Supreme Court in Chillar Mal Narain Das v. Commissioner of Sales T ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... The facts of the present case are materially different from those which were before the Supreme Court In the two cases referred to above. Unlike in those cases, there is no provision in the Fertiliser (Control) Order, which completely excludes the exercise of volition or the freedom of contract. No doubt, under the provisions of the said Order the price of fertilisers is controlled, quality standard has been prescribed for mixture of fertilisers and persons carrying on the business of selling fertilisers are required to obtain licences. But there is no statutory compulsion in the matter of sale or purchase of fertilisers and parties are left free to enter into consensual contractual agreement in the exercise of their volition subject only ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... S.T.C. 210 (S.C.)., and Salar Jung Sugar Mills Ltd. v. State of Mysore and Others[1972] 29 S.T.C. 246 (S.C.). 8.. The Tribunal was, therefore, perfectly right in holding that the turnover of the petitioner relating to the supply and distribution of fertilisers is exigible to sales tax under the Act. 9.. We find no merit in the petitioner's contention that the sales tax was not leviable on the turnover relating to the sale of damaged foodgrains. The sale in question was effected in the course of the regular business of the petitioner and no valid ground has been shown as to why the said turnover should be treated as exempt from tax. 10.. In the result, we confirm the orders passed by the Tribunal and dismiss these four tax revision ca ..... X X X X Extracts X X X X X X X X Extracts X X X X
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