ORDER
R. Jayasimha Babu, J.
1. The assessee is, inter alia, engaged in the manufacture of fertiliser. It had, during the assessment years 1980-81, 1981-82, 1983-84 and 1990-91, received subsidies from the Government under a scheme formulated by the Government, under which manufacturers of fertilisers were enabled to receive subsidy at the time the goods were cleared from the factory.
2. The subsidy so given was not given to the assessee by or on behalf of the purchaser of the fertiliser. It was not even payable at the time of the sale. The right to receive the subsidy was under the scheme formulated by the Government and not by reason of any act or omission on the part of the purchaser of the fertiliser.
3. The Supreme Court has now settled the law regarding the includibility of the subsidy in the taxable turnover of the manufacturer of fertiliser, in the case of Neyveli Lignite Corporation Ltd. v. Commercial Tax Officer, Cuddalore , a decision rendered by a Bench of three learned Judges of the apex Court on September 19, 2001. The court in that case has held thus :
“Subsidy is paid to the appellant not by or on behalf of the purchasers, but is paid by the Government of India for different reasons and under its own scheme and after a budgetary allocation. As we have already observed, the scheme of payment postulates the right of the appellant to receive the subsidy on its clearance from the factory and not necessarily after the sale of fertiliser. Even before the sale of fertiliser, the right to receive the subsidy arises and under the circumstances, it cannot be said that subsidy would form part of the sale price or turnover of the appellant.”
In that case, the Supreme Court set aside the judgment of the Tamil Nadu Taxation Special Tribunal and held that such subsidy was not includible in the turnover by treating the same as part of the sale price, though paid by the Government in the form of subsidy.
4. The assessee has in these petitions challenged the assessment orders in which the subsidy has been treated as turnover and tax has been levied thereon. Having regard to the law declared by the Supreme Court, the assessment orders cannot be sustained. They are accordingly set aside. The writ petitions are allowed. All the pending W.M.Ps are closed.
5. The assessee has, it is submitted, under the directions given by this Court, paid 50 per cent of the amount of the tax levied. The Revenue has no right to retain that amount. The same shall be refunded to the assessee forthwith.