Sale price and taxable turnover exclude independent government subsidy paid outside the contract of sale.

A governmental subsidy paid under an administrative retention price scheme, including the equated freight subsidy, was held to be outside taxable turnover because sales tax applies only to the aggregate amount payable by the purchaser for the goods. The statutory price fixed under the Fertiliser (Control) Order, 1985 was the only sale consideration, and the subsidy was not paid under the sale contract or by or on behalf of the purchaser. Amounts received independently of the contract of sale and from a source other than the purchaser cannot be treated as part of sale price or turnover; the subsidies were therefore not liable to sales tax.

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Issues: Whether subsidy received by a fertiliser manufacturer under the Government's retention price scheme and the equated freight subsidy formed part of its taxable turnover under the Tamil Nadu General Sales Tax Act, 1959.

Analysis: Sales tax is chargeable on the turnover of a dealer, and turnover comprises the aggregate amount for which goods are sold or supplied for valuable consideration. The price fixed under the Fertiliser (Control) Order, 1985 was the only amount payable by the purchaser under the statutory regime. The subsidy was paid by the Government under an administrative scheme, not under the sale contract and not by or on behalf of the purchaser. It arose on clearance from the factory and was intended to support the manufacturer and maintain reasonable consumer prices, so it was independent of the sale consideration. Amounts received de hors the contract of sale and from a source other than the purchaser cannot be treated as part of the sale price or turnover.

Conclusion: The subsidy and freight subsidy did not form part of the assessee's taxable turnover and were not liable to sales tax.

Ratio Decidendi: Only amounts payable by the purchaser under the contract of sale or under the controlling statutory price regime can enter taxable turnover; a separate governmental subsidy paid independently of the sale contract is not part of sale consideration.

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