TMI Blog1985 (4) TMI 277X X X X Extracts X X X X X X X X Extracts X X X X ..... officer and the disclosed version of the assessee was accepted. It was taxed on the turnover of purchase as disclosed by it. 2.. Subsequently, however, a notice under section 21 of the U.P. Sales Tax Act (hereinafter referred to as the Act) was issued on 28th March, 1972, to the assessee which stated that a part of turnover had escaped assessment. The assessee put in appearance and on 26th March, 1972* the assessment order was passed. Against that order the assessee appealed to the Assistant Commissioner (Judicial), Sales Tax who remanded the case for assessment afresh. After remand the case was transferred to the Assistant Commissioner (Assessment) who fixed the taxable turnover under section 21 at Rs. 21,78,000 vide order dated 28th Fe ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ment is some times over-elaborated and over emphasised to the extent that it is argued that the material or ground maintaining such belief must also be recited in the order. This contention is untenable. Surely, a notice under section 21 of the Act would be invalid if it did not indicate that the assessing authority had reason to believe that the whole or any part of the turnover of a dealer for any assessment year or part thereof had escaped assessment and that a claim had wrongly been allowed. The belief of the assessing authority noted above and communication thereof to the person concerned are the very foundation of the exercise of jurisdiction under section 21 of the Act. The absence of such belief and its reflection in the notice woul ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... onist is that it does not pay any charges at the time of or before the purchase except the price of the grain fixed by the Government and the incidental charges are paid, if at all, to its agents as handling charges after the transaction of purchases of foodgrain is completed. In support of this plea a copy of the costing sheet prepared by the Government of India has been submitted and it was urged that it proved that the handling charges were paid to the agents for filling, making and weighing of bags and for transporting and stacking them in the godowns after the grain had been purchased by the assessee. 5.. Section 2(gg) of the Act defines "purchase price", as follows: "(gg) 'Purchase price' means the amount of valuable considerati ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ne the question as to whether such charges can be regarded as part of the purchase price and ultimately be included in the taxable turnover or should be treated as separate from the price. 6.. Learned standing counsel, however, raised a preliminary argument to meet the contention canvassed on behalf of the assessee. He referred me to the finding recorded by the Tribunal with respect to the concession made by the counsel for the assessee. The judgment of the Tribunal contained an observation: "It was conceded by the learned counsel for the assessee that arhat or administrative charges were paid by assessee to the agents, including the State Government." Analysing this observation, two inferences are sought to be drawn. Firstly, that ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... to whether it should be included in the turnover has to be decided. 7.. This point has arisen for judicial interpretation in some cases. In Durga Das Narain Das, Ghaziabad v. State of Uttar Pradesh 1979 UPTC 857 (Vol. II) the question arose as to whether on a proper construction of section 2(gg) of the Act "arhat" and "tulai" as trade charges and market fee paid under the U.P. Krishi Utpadan Mandi Adhiniyam, 1964, were includible in the taxable turnover. It was held by a Division Bench of this Court that the market fee and trading charges formed part of the purchase price and as such were includible in the turnover of purchases of the purchasing dealer. In other words; all the three items, i.e., "arhat", "tulai" and "market fee", accordin ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... a whole or part of the transaction unfolds a process which does necessarily involve the instrumentality of an agent who has to be paid, law becomes alive to such situation and makes a statutory provision for payment of such amount of fee. Where this is not so done and the services of an agent have to be employed for some purpose, it remains a purely private arrangement and if any commission is paid to such agent, it must be regarded as a part of the purchase price. Strictly speaking, the concession made on behalf of the assessee to which the Tribunal has adverted clinches the point against the assessee because the payment was acknowledged to be a commission paid to an agent and the State Government was admitted to be one of such agents. How ..... X X X X Extracts X X X X X X X X Extracts X X X X
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