Sales tax recovered from buyers forms part of sale price and is includible in turnover where dealer bears the tax burden.

Where the sales tax statute placed liability on the dealer and contained no provision authorising collection of tax as such from purchasers, amounts recovered from buyers by way of sales tax formed part of the sale consideration. Turnover, defined by reference to the aggregate of sale price, therefore included such recovered sums because they were part of the valuable consideration payable for the goods. The later insertion of section 7-A did not alter that position for the material years. The appeals were accordingly decided against the assessee and in favour of the Revenue.

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Issues: Whether sales tax recovered by a dealer from purchasers forms part of the sale price under section 2(o) of the Madhya Pradesh General Sales Tax Act, 1958 and is therefore includible in turnover.

Analysis: The charging provision cast the liability to pay tax on the dealer and did not impose any liability on the purchaser. On the statutory definitions, turnover comprised the aggregate of amounts received and receivable as sale price, and sale price meant the amount payable as valuable consideration for the goods. If the dealer passed on its tax burden to buyers, the amount so recovered was not a separate tax liability of the purchaser but an element of the overall consideration paid for the goods. In the absence of any provision authorising the dealer to collect sales tax as such from buyers, the amount collected merely formed part of the price. The later section 7-A did not alter this position for the material years in a manner relevant to the issue. Prior authorities were consistent that tax passed on by the seller becomes part of the price when the buyer agrees to pay it.

Conclusion: Sales tax recovered from purchasers formed part of the sale price and was includible in turnover. The issue was decided against the assessee and in favour of the Revenue.

Final Conclusion: The appeals failed because the amount recovered as sales tax was treated as part of the consideration for the sales and not as an amount outside turnover.

Ratio Decidendi: Where the statute places the tax burden on the dealer and contains no provision authorising collection of tax as such from purchasers, any amount recovered from buyers by way of sales tax forms part of the sale consideration and is includible in turnover.

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