ORDER
R. Jayasimha Babu, J.
1. The petitioner-dealer in all these petitions is a manufacturer of sugar. It purchased sugarcane from farmers. The minimum price payable for such purchase is statutorily fixed by the Sugarcane (Control) Order, 1966 made under the provisions of the Essential Commodities Act, 1955, it being open to the parties to agree on a higher price, if they so choose.
2. It is the case of the assessee that in all these years the assessee had not contracted to pay any higher price to the farmers who had supplied sugarcane and price which it had agreed to pay was the price fixed under the Sugarcane (Control) Order. Clause 3 of that Order provides for minimum price for sugarcane payable by the producer of sugar. That is a price which the Central Government is required to notify from time to time having regard to the factors set out in that clause.
3. In addition to the price fixed by the Central Government under Clause 3, producers are also required to pay an additional price for sugarcane purchased on or after October 1, 1974, by virtue of Clause 5-A of that order. Clause 5-A in Sub-clause (1) thereof mandates such additional payment, to the extent such additional payment may be found due in terms of the Sugarcane (Control) Order. The manner in which the additional price is to be calculated is set out in the Second Schedule in the shape of a formula. Most of the inputs required for making that calculation are the figures available with the producers, except the rate of return which is a figure to be recommended by an authority which the Central Government is required to specify. Formula given therein is :
R-L+2A+B
X = -----------
2C
wherein 'R' is the amount in rupees of sugar produced during the sugar year excluding the excise duty paid or payable to the factory by the purchaser. It is evident from the formula itself that the additional price is the amount which is incapable of determination at the time the sugarcane is supplied to the factory by the grower. The additional price can only be determined at the end of the sugar year and not earlier.
4. Sub-clause (2) of Clause 5-A requires that the price determined under that clause be intimated to the producers of sugar and to the growers of the sugarcane.
5. Sub-clause (4) provides that the additional price determined [under Sub-clause (2) or Sub-clause (3), as the case may be] shall be paid by the producer of sugar to the sugarcane grower, at such time and in such manner as the Central Government or the State Government, as the case may be, may from time to time, direct.
6. Sub-clause (5) exempts the producers who have paid a price higher than the cumulative price fixed under Clauses 3 and 5-A, from having to pay the additional price determined under Clause 5.
7. Sub-clause (6) of Clause 5-A provides--'where any extra price is paid by the producer of sugar to the sugarcane grower for the supply of sugarcane in addition to the minimum sugarcane price fixed under Clause 3, the extra price so paid shall be adjusted against the additional sugarcane price determined under Sub-clause (2) or Sub-clause (3), as the case may be, and the balance, if any, shall be paid to the sugarcane grower.'
8. This clause enables the producers to set-off against the additional price determined at the end of the sugar year, the amounts in excess of the price fixed under Clause 3 that the producer of sugar may have paid to the grower.
9. Till the year 1997 the State Government had the practice of writing to the sugar producers advising them to pay a price for the cane which was higher than the price fixed under Clause 3. The price so advised to be paid, was described by the State as 'State Advised Price'. For all the assessment years with which we are concerned in these writ petitions, the assessment years being 1985-86, 1986-87, 1987-88, 1988-89, 1989-90 and 1993-94, the State had advised the producers including the assessee, to pay the State Advised Price which was higher than the price fixed under Clause 3. A communication sent by the State to the mills advised them to pay not less than the price indicated against each mill for the crushing season and stated, inter alia, that the above price may be adjusted against the price to be fixed later under Clause 5-A(6) of the Sugarcane (Control) Order, 1966.
10. It is the case of the petitioner that pursuant to such letters which the assessee regards as containing coercive advice, the assessee as also the other sugar producers effected payment to the sugarcane growers in excess of the price fixed under Clause 3, and up to the amounts fixed as the State Advised Price in the communication sent by the State. The payments so effected were labelled by the assessee as advance. The amount of the advance was not included by the assessee in the returns filed by it under Section 13(2) of the Tamil Nadu General Sales Tax Act, 1959 but were, after the price was fixed under Clause 5-A and notified, included in revised returns filed by the assessee. The purchase tax payable on that price differential was also paid along with the revised return.
11. The assessing authorities having held that the assessee was liable to pay purchase tax on the amounts paid by the assessee to the sugarcane growers as advance, as in the view of the revenue, all such payments were in fact part payments of the price for the sugarcane, and further that the assessee was liable to pay interest under Section 24 of the Tamil Nadu General Sales Tax Act, for not having paid the purchase tax at the time it was due and payable, the petitioner challenged those orders up to the Tamil Nadu Taxation Special Tribunal*, with uniform lack of success. The orders of the Tribunal upholding the levy of tax as also interest, have now been challenged before us.
12. Learned Senior Counsel for the petitioner Mr. Natarajan submitted that the amount paid as advance can never be regarded as forming part of price and the advance paid by the assessee to the sugarcane growers at the time of payment were incapable of being regarded as part payment of price and therefore, the levy of purchase tax on those amounts was wholly beyond the jurisdiction of the authorities,
13. Counsel in this context relied upon the decision of this Court in the case of Thiru Arooran Sugars Ltd. v. Deputy Commercial Tax Officer, Mannargudi [1988] 71 STC 444, the decision of the Supreme Court in the case of State of Tamil Nadu v. Kothari Sugars & Chemicals Ltd. : the decision of the Supreme Court in the case of E.I.D. Parry (I) Ltd. v. Assistant Commissioner of Commercial Taxes [2000] 117 STC 457, the decision of the Supreme Court in the case of Shri Malaprabha Co-op. Sugar Factory Ltd. v. Union of India : and on review in : .
14. This Court in the case of Thiru Arooran Sugars Ltd. v. Deputy Commercial Tax Officer, Mannargudi [1988] 71 STC 444, considered the question as to whether the amounts paid by the sugar producers in excess of the additional price fixed in Clause 5-A of the Sugarcane (Control) Order being an amount paid under compulsion was capable of being regarded as forming part of the price of sugarcane and therefore exigible to purchase tax. That court held that the producers had not entered into any contracts with the sugarcane growers for payment of a price higher than the one which the Sugarcane (Control) Order required them to pay. The court in that judgment had noted the submission made by the counsel for the producers that the producers did not dispute their liability to pay tax on the additional price determined under Clause 5-A of the Sugarcane (Control) Order. The court held that up to the limit of the additional price determined by the authorities under Clause 5-A the payment made was one which formed part of the price and subject to purchase tax, but that the amount in excess of the additional price did not form part of the price.
15. In the case of State of Tamil Nadu v. Kothari Sugars & Chemicals Ltd. [1996] 101 STC 197, the Supreme Court upheld the decision of the division Bench of this Court in the case of Thiru Arooran Sugars Ltd. v. Deputy Commercial Tax Officer, Mannargudi [1988] 71 STC 444.
16. The apex Court held that for treating the entire amount paid by the producers as the price of sugarcane supplied, it must be found proved as a fact that the higher price including the excess amount was paid as the price of the sugarcane under the agreement between the growers and purchasers, irrespective of the lower amount being fixed as the aggregate of amounts fixed under Clauses 3 and 5-A of the Sugarcane (Control) Order.
17. In the case of E.I.D. Parry (I) Ltd. v. Assistant Commissioner of Commercial Taxes [2000] 117 STC 457 (SC) to which the assessee herein was a party, it was held after reviewing the earlier cases, that--
'....................the amounts paid by way of consideration by the purchaser to the seller of goods in pursuance of the contract of sale can legitimately be regarded as purchase price while calculating the turnover for the purposes of sales tax legislation. What can legitimately be brought to sales tax or purchase tax is the aggregation of the consideration for the transfer of property, .........But, if the sale price is fixed statutorily then the only obligation of the purchaser under the agreement would be to pay that price only and no other amount can be included in the purchase price even if the same is paid by the purchaser to the seller.'
18. In the case of Shri Malaprabha Co-op. Sugar Factory Ltd. v. Union of India : the court examined the background in which Clause 5-A came to be introduced into the Sugarcane (Control) Order. It referred to the Bhargava Commission report, a report which constituted the basis for the introduction of Clause 5-A, wherein it was stated that the extra realisation on the sale of sugar should be divided between the growers and the industry in the ratio 50 : 50. The additional price provided for in Clause 5-A is to enable the growers to share in the profits of the producers by sharing in the benefit of higher price at which non levy-free sugar is sold by purchaser.
19. The application filed by the Union for review of that judgment was considered in Shri Malaprabha Co-op, Sugar Factory Ltd. v. Union of India : wherein the court referred to the earlier judgment and observed thus referring to Clause 5-A :
'This Court construed Clause 5-A as introducing a new pricing policy which conferred a benefit on the producer by providing that he shall be entitled to retain 50 per cent of the extra realisation from sale of levy-free sugar. At the same time, it created a new liability for him by providing that he shall share the extra realisation from sale of levy-free sugar with the cane sugar on 50 : 50 basis.'
20. It is undisputed that what the petitioner here agreed to pay to the sugarcane grower was the price fixed under the Sugarcane (Control) Order which included the price notified in Clause 3 as also the additional price notified in Clause 5-A. The sugarcane grower who delivered sugarcane to the factory was therefore, entitled to receive that price. The fact that the payment of the full price was not effected at the time the sugarcane was delivered does not on that score alone enable the producer to contend that the payments made subsequently thereto under the title 'advance' did not form part of the price, even when those payments had been made to meet the liability which the producer was required to discharge, namely the payment of the additional price under Clause 5-A. Section 11 of the Sale of Goods Act, 1930 expressly provides that unless a different intention appears from the terms of the contract, stipulations as to time for payment is not deemed to be the essence of contract of sale. Here, it is the case of the petitioner that it had not agreed to pay any price other than the one provided for in the Sugarcane (Control) Order. The fact that a part of the price payable under Clause 5-A was paid even before the Government notified the amount payable under Clause 5-A does not, on that score, take away the character of a part payment of price in respect amounts paid by the assessee up to the limit of the amount notified as additional price.
21. Though the assessee has used the word 'advance' while making payment to the grower, the Sugarcane (Control) Order does not envisage the payment of any such advance. It, however, recognised payment being made by the producer to the grower even before the additional price is notified under Clause 5-A. Such payments are regarded by Sub-clause (6) of Clause 5-A as part payment of the price, and permits such part payments of the price to be set-off against the additional price notified under Clause 5-A. Thus the amounts paid by the assessee to the growers on the basis of the State Advised Price communicated to it by the State Government, to the extent such payments were up to or less than the additional price notified under Clause 5-A, have the character of being part payment of the price and thus forming part of the price for the sugarcane purchased by it attracting the levy of purchase tax.
22. It is well-settled that the true character of a transaction is not determined merely by the label given by the person engaging in the transaction. The true legal import has to be ascertained having regard to all the relevant factors. In the context in which these payments were made by the assessee these payments cannot properly be regarded as advance in the nature of loans or ex gratia payments. The so-called 'advances' are in fact, part payments of part of the total price for the sugarcane.
23. Notwithstanding this character of the payment being a part of the payment of the price, counsel submitted that even in such a case, the levy of interest under Section 24 was wholly unwarranted by the provisions of the Act.
24. Section 24(1) of the Tamil Nadu General Sales Tax Act, 1959, reads thus :
'24. Payment and recovery of tax.--(1) Save as otherwise provided for in Sub-section (2) of Section 13, the tax assessed or has become payable under this Act from a dealer or person and any other amount due from him under this Act shall be paid in such manner and in such instalments, if any and within such time as may be specified in the notice of assessment, not being less than twenty one days from the date of service of the notice. The tax under Subsection (2) of Section 13 shall be paid without any notice of demand. In default of such payment the whole of the amount outstanding on the date of default shall become immediately due and shall be a charge on the properties of the person or persons liable to pay the tax or interest under this Act.'
Section 13(2) referred to in Section 24(1) reads thus :
'Section 13. Advance payment of tax.--(1)........
(2) In lieu of the tax provisionally determined under Subsection (1), a dealer may, at his option, pay tax in advance during the year on the basis of his actual turnover for each month or for such other periods as may be prescribed. For this purpose, he may be required to furnish returns showing his actual turnover for each month or other periods as may be prescribed and to pay tax on the basis of such returns. The tax under this sub-section shall become due without any notice of demand to the dealer on the date of receipt of the return or on the last due date as prescribed, whichever is later.'
25. Rule 18 sets out the thing that the dealer is required to do when he exercises the option under Section 13(2).
26. Learned counsel submitted that the scheme of Section 24 permits levy of interest in all cases where the tax is not paid within 21 days from the notice of demand, and the only exception to that is in cases of self-assessment made under Section 13(2) in which case the tax becomes payable on the date of the receipt of the return or the last due date prescribed whichever is later.
27. Counsel submitted that even in cases where a dealer who has opted for self-assessment under Section 13(2), files a return which may later be found to be incorrect or incomplete, such a dealer would not be liable to pay interest for any amount in excess of what it had admitted to be the turnover exigible to tax.
28. Counsel in this context relied on the decision of the Constitution Bench of the Supreme Court in the case of J.K. Synthetics Ltd. v. CTO [1994] 94 STC 422 in which the majority decision of the Supreme Court in the case of Associated Cement Co. Ltd. v. Commercial Tax Officer [1981] 48 STC 466 was overruled and the minority view was approved. The court therein was concerned with certain provisions of the Rajasthan Sales Tax Act, 1954 which, inter alia, provided for levy of interest in cases where the tax was not paid in cases of self-assessment along with the return. In the case of Associated Cement Co. Ltd. : the majority therein had held with reference to return that the relevant provision meant a true and correct return, and therefore interest was leviable in respect of the turnover which had been omitted to be included in the return filed, but which was includible therein. The Constitution Bench upheld the minority view which stated that what must be looked at is only the return actually filed by the assessee. It approved the following passage from the minority decision :
'..........We must look at the return actually filed by the assessee in order to see what is the full amount of tax due on the basis of such return. It is not the assessed tax nor is it the tax due on the basis of a return which ought to have been filed by the assessee but it is the tax due according to the return actually filed that is payable under Sub-section (2) of Section 7.'
The minority view characterised the view of the majority in the case of Associated Cement Co. Ltd. : as 'torturing the word 'return' ' found in the relevant section of the Rajasthan Act, by reading into it requirements which had not been expressly spelt out in the section.
29. A Bench of two learned Judges of the Supreme Court in the case of Commissioner of Sales Tax v. Qureshi Crucible Centre : held that while considering the question of levy of interest the concept of mala fides was irrelevant. However, another Bench in the case of Calcutta Jute . : and held that the assessee before it was liable for interest as it had not disputed that it is liable to pay tax on the turnover under the relevant statutory provision, even though the constitutional validity of the provision had been challenged. The lack of bona fides on the part of the assessee therein was taken note of for upholding the levy of interest.
30. A three-Judge Bench of the apex Court in the case of Maruti Wire Industries Pvt. Ltd. v. Sales Tax Officer [2001] 122 STC 410, applied the law laid down in the case of J.K. Synthetics Ltd. : in a case arising under the Kerala General Sales Tax Act, It upheld the plea of the assessee that the legislation did not specifically provide for levy of penal interest for failure to file return of turnover. The court observed that--'A legislative casus omissus cannot be supplied by judicial interpretative process'.
31. Learned counsel submitted that the situation here is similar to the one which the apex Court considered in the case arising under the Rajasthan and Haryana General Sales Tax Acts. Counsel submitted that the language of Section 13(2) of the Tamil Nadu Act clearly indicates that the tax referred to therein is the tax which is payable on the basis of such return ; 'such' referring to the return which the assessee filed under Section 13(2) after exercising the option.
32. Attention was also invited to Sub-section (1) of Section 13 which enables the authority to provisionally determine the amount of tax on the basis of return which the authority may collect from the dealer. What is provided under Sub-section (2) is only an alternative to Sub-section (1). Sub-section (3) enables the authority in cases it finds the return to be incorrect or incomplete to make further enquiries and determine the tax payable to the best of its judgment, after giving notice to and hearing the dealer. Sub-section (4) conferred wide power and authority to enhance or reduce the tax assessed, if he finds for any period the turnover or the rate was determined at a too low a level, or at too high a level. Counsel submitted that having regard to the scheme of Section 13, the liability of the dealer to pay tax where he files return under Section 13(2) is confined to the tax payable on the basis of the return already filed, and nothing more.
33. Having regard to the law laid down by the apex Court, we are inclined to agree with counsel that such is the effect of Section 13(2).
34. However in this case we have an additional feature in the form of the revised return for the very same period filed by the assessee admitting a higher turnover and paying the tax thereon. The additional turnover admitted in the revised return is the amount paid to the sugarcane growers by way of additional price. The assessee admitted its liability to pay purchase tax thereon and also paid the tax along with revised return. Though the Act does not in any of it's provisions expressly refer to the filing of revised return, the filing of revised returns is apparently as well-established practice which has been taken note in the forms prescribed under the Tamil Nadu General Sales Tax Rules, 1959. Form A, for example, refers at the top as :
Return
--------------
Revised Return
Similar is the case in Form AA. Form A deals with the return of estimated turnover. The option given to the assessee to file a revised return is apparently to enable the assessee to correct the errors in the return already filed and thereby avoid imposition of penalty which may otherwise be attracted on a finding of addition of income, penalties provided for under the Act being quite substantial.
35. The revised return filed by the petitioner itself contains a clear admission by the assessee as to the extent of the turnover that is taxable and the amount of tax that is required to be paid thereon.
36. For the purpose of Section 13(2), the tax payable by the assessee is not an amount which is confined to the erroneous original returns filed by the assessee, but is an amount which is payable in terms of the revised corrected returns filed by the assessee. The returns being returns of self-assessments, the basis for calculating the tax is the figures set out in that return. It is wholly impermissible for an assessee to file a defective return, disclaim liability for payment of tax as also of any interest for delayed payment of tax on the basis of that incorrect return and thereafter file a revised return including therein the correct taxable turnover admitting the liability for payment of further amounts by way of tax, and then claim that it is not liable for payment of any interest for the delay in remitting the tax from the date of original return to the date of the revised return.
37. The levy of interest for the period between the date of filing the incorrect original return and the date on which the revised return was filed and the tax was paid, was lawful.
38. The writ petitions are dismissed.