TMI Blog2018 (9) TMI 299X X X X Extracts X X X X X X X X Extracts X X X X ..... in case of M/s. Green India Farm Biotech and not akin to later determination order in case of M/s. King and Queen Seeds Corporation - the Tribunal committed a serious error. The revisional order of the Deputy Commissioner is restored. - R/SPECIAL CIVIL APPLICATION NO. 1889 of 2017 - - - Dated:- 30-8-2018 - MR. AKIL KURESHI AND MR. B. N. KARIA, JJ. For The Petitioner : Mr Pranav Trivedi, AGP For The Respondent : Rule Served (64) ORAL JUDGMENT ( PER : HONOURABLE MR.JUSTICE AKIL KURESHI) 1. This petition is filed by the State Government challenging the judgment dated 19.4.2016 passed by the Gujarat Value Added Tax Tribunal ('the Tribunal for short) in the following background. 2. The respondent is a limited company and is engaged in the business of selling various types of seeds of agriculture produce. In the year 2006-2007, respondent had shown purchases of such seeds from various farmers. Audit assessment was done by the Assessing Authority. However, in such assessment, the question of levying purchase tax on such purchases of the assessee did not come up for consideration. Aggrieved by the order of the Assessing Authority, the ass ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... udgment on the following grounds : i) When the original audit assessment order was passed by the Assessing Officer on 29.12.2010, the determination order in case of M/s. Green India Farm Biotech was already in existence, despite which, the Assessing Officer did not levy the purchase tax. ii) While the Deputy Commissioner disposed of the appeal, he could as well have revised the order on the basis of the determination order in case of M/s. Green India Farm Biotech. The fact that he did not do so would indicate that he did not find it proper to levy tax. iii) After the determination order in case of M/s. Green India Farm Biotech, another determination order came to be passed in case of M/s. King and Queen Seeds Corporation in which earlier determination order was noticed despite which, a different view was taken. Decision to levy tax in the present case would amount to change of opinion. iv) The assessee was not purchasing certified seeds from the farmers but got the seeds produced in the farms by providing basic seeds and other inputs. Farmers merely cultivate the seed on behalf of the assessee. Case of the assessee was therefore, akin to the facts arising in case of M/s ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Biotech or in the later order in case of M/s. King and Queen Seeds Corporation? To determine this question, we may take note of facts arising in each case and compare them with the facts of the present case. 10. In case of M/s. Green India Farm Biotech, the facts were that the dealer in the course of business would purchase seeds from the farmers, carry out detail process of coating them with pesticides, pack them in lots in different packings and then put in market for sale. Dealer applied to the authority to be advised whether on the purchases of such seeds made by him from the farmers, any tax would be payable. Determination authority observed that the seeds purchased by the dealer were not marketed in the same condition. Seeds when purchased were untreated. A detailed treatment process was undertaken before such seeds were sold. Thus what was purchased by the dealer and what was sold in the market were two different products. Dealer was therefore liable to pay the purchase tax on such purchases. 11. In case of M/s. King and Queen Seeds Corporation, the assessee had pointed out to the determination authority that they are in business of marketing seeds. For such purpose, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... compensation. (vii) He would transport the seeds to the place appointed by the company at his risk and cost. (viii) After the production of the seeds, he would accept the payment made by the company upon laboratory testing. (ix) If the seeds are rejected, he would remove the seeds from godown of the company at his cost. (x) After the produce is supplied to the company, the company would pay 80% or 90% of the price at the rate fixed by the market yard by way of part payment. Remaining payment would be made considering 10% to 15% premium over the price fixed by the market yard. 13. All these clauses unequivocally show that entire production of seeds was by the farmer himself. At all stages, farmer undertook the responsibility of production and risk of failure of production. It may be that the foundation seed may have been provided by the company and scientific guidelines and technical inputs may also have been provided by the company to the farmer in order to enhance the production, nevertheless, it was the farmer who was actually producing the seeds. It is not a case where the company merely used the land of the farmer and his caretaking during cultivation for which t ..... X X X X Extracts X X X X X X X X Extracts X X X X
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