TMI Blog1991 (3) TMI 342X X X X Extracts X X X X X X X X Extracts X X X X ..... stances, we have considered it appropriate to decide this controversy in the writ petition itself. We have heard the counsel for the petitioners in the various writ; petitions and the Government Pleader. This case being illustrative of the controversy we proceed to pronounce judgment in it. The petitioner is Fertiliser Corporation of India Ltd. and according to it for the assessment year 1983-84 the assessing authority, viz., Commercial Tax Officer has treated the aforesaid amount of subsidy amounting to Rs. 23,05,15,503 as liable to sales tax and raised the demand in dispute. The manufacture, sale and distribution of fertilizers in the country is regulated by the Fertilizer (Control) Order, 1957, issued by the Central Government in exercise of the powers conferred under section 3 of the Essential Commodities Act, 1955. Clause 3 of the said Order fixed maximum prices of fertilizers at which it can be sold by a manufacturer or a dealer. Sub-clause (3) of clause 3 reads as follows: "3.(3) No manufacturer or dealer shall sell or offer to sell any fertilizers at a price or rate exceeding the maximum price or rate fixed under this clause." Clause 4 of the said control order oblige ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... red by the assessee due to retention prices system by Government of India due to which the assessees cannot increase the price of their production i.e., fertilisers from time to time in proportion to their cost of production, freight incurred, etc. The difference in value that the assessees have foregone which is subsidised by Government of India is a value received, that would have been received from the purchasers only that would have constituted the sale price of fertilisers. The price support received from the Government of India is deemed to be a sale according to the provisions of the Act... " According to the petitioner this subsidy does not form part of the sales turnover and is not liable to sales tax. The scheme of the Andhra Pradesh General Sales Tax Act, 1957, discloses that sales tax is leviable under it on the sale turnover. Section 2(s) of the Act defines "turnover" and it has undergone a change after the Amendment Act 18 of 1985 with effect from July 1, 1985. It is useful to extract the definition prior to and after amendment as the controversy covers a period from 1981-82 onwards: The original clause read as under: "(s) 'Turnover' means the total amount set o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sale or purchase of goods by a dealer either directly or through another, on his own account or on account of others, whether such consideration be cash, deferred payment or any other thing of value and shall include, (a) the value of any goods as determined by the assessing authority; (i) to have been used or supplied by the dealer in the course of execution of the works contract; (ii) to have been delivered by the dealer on hire purchase or any other system of payment by instalments; (iii) to have been supplied or distributed by a society including a co-operative society, club, firm or association to its members, where the cost of such goods is not separately shown or indicated by the dealer and where the cost of such goods is separately shown or indicated by the dealer, the cost of such goods as shown or indicated; (b) any other sum charged by the dealer for anything done in respect of goods sold at the time of, or before, the delivery of the goods; (c) any other sum charged by the dealer, whatever be the description, name or object thereof; and (d) the aggregate of amounts charged under section 5C or realisable under section 5E: Provided that in the case of a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... mentioned in the bill of sale. After the Amendment Act 18 of 1985, the definition of "turnover" is split into three parts, viz., (1) the total amount set out in the bill of sale; (2) a situation where it is found that the bill of sale does not correctly set out the amount for which the goods were sold; and (3) a situation where there is no bill for sale. The various sub-clauses to the third limb of the definition are meant for a situation where there is no bill of sale or probably where the bill of sale is held to be not correct and rejected. The learned Government Pleader has laid stress on clause (iii) of section 2(s). As pointed out above, where a sale is covered by a bill of sale and in the absence of any finding that it does not set out correctly the amount for which goods are sold, only clause (i) will apply. In the present case the petitioners have not received any amount from the purchaser or on his behalf in connection with any sale transaction. The amount received by way of subsidy from the Central Government under the scheme is in the larger interest of industry as a whole. The subsidy has no relation to any single sale transaction and is determined on the basis of seve ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ntrol order the Supreme Court held that it should not form part of the turnover as defined by the Orissa Sales Tax Act. The said decision also does not help the respondents. The next decision is that of the Supreme Court reported in Hindustan Sugar Mills Ltd. v. State of Rajasthan [1979] 43 STC 13. In that case under the relevant control order the sale price of cement was mentioned as "free on rail destination railway station", and the assessee had collected amounts by way of deposit equal to sales tax on railway freight from the purchaser towards contingent liability. The purchasers actually paid the railway freight. In view of the definition of the sale price and the circumstances that purchasers paid the railway freight and the assessee had collected the amount though described it as a deposit, the court held that it forms part of turnover for the purpose of levy of tax under the Rajasthan Sales Tax Act. This case also does not help in resolving the controversy before us. Another decision of this Court reported in Sakti Engineering Co. v. State of Andhra Pradesh [1989] 75 STC 215 (AP), was cited but it is noticed that on review that judgment was set aside vide the decision r ..... X X X X Extracts X X X X X X X X Extracts X X X X
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