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2009 (3) TMI 944

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..... eferring to various terms and conditions contained in the agreement entered into between the petitioner and the procurement agency and also having regard to the manner in which the scheme is operated has held that the relationship between the petitioner and the procurement agency is that of principal and agent and that the purchases made by the procurement agency was for and on behalf of the petitioner. The procurement agency only gets a fixed amount of commission. The goods stored in the godowns are treated as stocks of the petitioner and the petitioner pays charges payable to the warehousing corporations. The goods are insured at the cost of the petitioner. Therefore, when the commodities procured are transferred to the petitioner, it .....

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..... s a Government of India undertaking. Whenever the market price of any agricultural commodity falls below certain limits, the Government of India fixes a price called minimum support price for such agricultural commodity and procures such commodity from the farmers to protect their interest. Ministry of agriculture, Government of India, issues directions to various Government organisations to execute the scheme. As the minimum support prices are fixed on a national-level basis, the Government nominates organisations at national as well as local level for implementation of the scheme. The organisation at the national level is referred as central nodal agency and at the local level they are referred as procurement agencies . The work of p .....

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..... services rendered by it. As per the scheme the procurement agency purchased copra and supplied them to the petitioner. In turn, the petitioner sold the same to the consumers through different agencies. In the returns submitted to the sales tax authorities for the assessment years 2000-01 and 001-02, the petitioner disclosed total and taxable turnovers in respect of its business by claiming the amount of turnover in respect of the sale of the procured commodity as exempted on the ground that such sales or second sales by the petitioner and that the necessary taxes have been collected from it by the procurement agency and the same has been credited to the Treasury and as such it is not liable to pay sales tax on such sales. However the assess .....

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..... er has presented these petitions. We have heard Sri C.G. Gopalaswamy, learned advocate for the petitioner and perused the orders under revision. The learned counsel contended that the assessing authority and the appellate authority have misled themselves in interpreting the relationship between the petitioner and the procurement agency as principal and agent. He contended that the authorities have committed error in holding that the purchases of the commodities by the procurement agency was for and on behalf of the petitioner and that there was no instance of sale between the procurement agency and the petitioner. He further contended that the authorities have failed to see that the petitioner has already paid the sales tax as claimed by .....

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..... to the petitioner, it cannot be said that there was an instance of sale. It is only when the petitioner sells the procured commodity to different organisations, it attracts payment of sales tax. Under the circumstances we see no error of law or facts in the orders of the Tribunal and other authorities. If the petitioner has paid sales tax to the procurement agencies when the procured commodities were transferred, as held by the appellate authority, the petitioner is entitled for set-off of such amount. Therefore, no prejudice is caused to the petitioner and its apprehension that it is made liable to pay the tax twice has no substance. In view of the above discussion, we see no merits in these petitions and therefore there are no grounds to .....

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