TMI Blog1993 (5) TMI 164X X X X Extracts X X X X X X X X Extracts X X X X ..... uce from other licensees in the area of the same market committee. They are liable to pay market fee on such transactions to the market committee. The authorities under the Punjab General Sales Tax Act intending to impose purchase tax on such transactions claim that the amount of the market fee paid by the petitioners would also be part of the turnover along with price of the agricultural produce and other necessary expenses incurred on such transactions. Thus the question for consideration is as to whether the purchase tax can be levied on the amount of market fee paid by the dealer. In the other set of writ petitions, apart from the above question, another question is for consideration which arises in the following circumstances. The writ petitioners who are registered dealers under the provisions of the Punjab General Sales Tax Act, apart from making purchase locally, they made purchases of agricultural produce from other places in the State of Punjab where they are not registered as licensees under the Markets Act. Since they are liable to pay market fee on such transactions as purchasers, their sellers on their behalf collect market fee from them and deposit the same in the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... hundred rupees; and (ii) also additional fees on the agricultural produce when sold by a producer to a licensee in the notified market area at a rate not exceeding one rupee for every one hundred rupees: Provided that (a) no fee shall be leviable in respect of any transaction in which delivery of the agricultural produce bought or sold is not actually made; and (b) a fee shall be leviable only on the parties to a transaction in which delivery is actually made." Rule 29(2) of the Rules framed under the aforesaid Act fixes the liability of the person for payment of the market fee. It reads as under: "(2) The responsibility of paying the fees prescribed under sub-rule (1) shall be of the buyer and if he is not a licensee then the seller who may realise the same from the buyer. Such fees shall be leviable as soon as an agricultural produce is bought or sold by a licensee." From the aforesaid provisions it is quite clear that liability to pay market fee is of the buyer (purchaser). If the buyer is a licensee in the same market area, it is he who is to deposit the market fee with the market committee concerned. If the buyer is not a licensee in that market committee area t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ax is provided under section 5 of the Act. The mode of payment of tax is provided under section 10 of the Act. The first question need not detain us for detailed discussion as it is the legal duty of the buyer (purchaser) to pay the market fee as the petitioners are licensees within the market area. Such market fee is not paid by them to the sellers. Obviously the amount of the market fee cannot be part of the sale consideration. The petitioners thus were not 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. Such market fee is not to form part of the turnover for assessment or payment of purchase tax. Reference hereinafter is being made to some of the judicial pronouncements particularly relating to the amount of market fee as to whether the same is to form part of the turnover or not in respect of the assessees, sellers. The answer was given in the negative and the same analogy would apply with more vigour to the purchaser. The Supreme Court in Anand Swarup Mahesh Kumar v. Commissioner of Sales Tax [1980] 46 STC 477, dealt with such a question concerning the U.P. Sales Ta ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... The aforesaid decision was relied upon by the Andhra Pradesh High Court in State of A.P. v. Tholasi Pandurangaiahchetty [1989] 75 STC 438, observing that the market fee collected by the dealer could not be said to form part of the taxable turnover of the dealer for the purposes of levy of sales tax. Likewise Anand Swarup's case [1980] 46 STC 477 (SC) was relied upon by the High Court of Rajasthan in Commercial Taxes Officer v. Trilok Chand Prem Prakash [1987] 67 STC 432. The first question posed is answered in the negative holding that the amount of the market fee paid by the petitioners to the respective market committees in respect of purchases made locally is not to be included in the turnover for the purposes of assessment of tax. The contention of the State counsel that market fee is to be included as part of the turnover for the purposes of assessment of purchase tax otherwise cannot be accepted. The market committees cannot allege that the moment sale transaction takes place within the market area some sales tax or purchase tax is leviable and that should also be treated as part of sale price and accordingly market fee assessed thereon. Likewise, it cannot be said that p ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ed. In para 4 of the judgment the following observations were made: "In holding that excise duty paid by the purchaser of tobacco was not part of the purchase price, the Mysore High Court in P.V. Beedies (Private) Ltd. v. State of Mysore [1963] 14 STC 139 observed: 'If, as it is well-settled, the consideration is a benefit which flows from the buyer to the seller, normally it would be impossible to suggest that the excise duty paid by the buyer in discharge of his own statutory liability involved any benefit to the seller, unless the duty was paid on behalf of the seller.' With respect, we agree with this observation. In the case before us, as we have already pointed out, the cess was paid by the assessees in compliance with the statutory liability which was on them. In fixing the price for the sugarcane, cess was not taken into account. There was also no stipulation between the assessees and the growers-sellers that the duty should, as between them, be borne by the seller and that when the buyer, on whom the liability was, paid the cess, it should be on behalf of the seller. The cess paid by the assessees in discharge of their own statutory liability and on their own account ..... 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