Excise valuation fiction cannot be imported into sales tax; free-supplied mould amortisation was excluded from sale price.

Under the U.P. Trade Tax Act, 1948, the sale price is confined to the real consideration for goods sold, and a notional addition cannot be imported from excise valuation rules. The Central Excise Act, 1944 and the Central Excise Valuation Rules, 2000 allow apportionment of the value of free-supplied tools, dies and moulds as additional consideration for excise purposes because of the express deeming fiction in that regime. No comparable provision exists in the sales tax statute, so the amortisation cost of moulds supplied free by the customer could not be treated as part of the assessee's turnover or sale price. The contrary view was rejected and the addition failed.

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Issues: Whether the amortisation cost of moulds supplied free of charge by the customer was includible in the sale price of auto components under the U.P. Trade Tax Act, 1948, by borrowing the valuation concept contained in the Central Excise Act, 1944 and the Central Excise Valuation Rules, 2000.

Analysis: The basis of levy under the U.P. Trade Tax Act, 1948 is the aggregate amount for which goods are sold, namely the real sale price or turnover under sections 3 and 2(i), and not a notional addition imported from another fiscal statute. The excise regime is different: section 4 of the Central Excise Act, 1944 read with rule 6 of the Central Excise Valuation Rules, 2000 expressly permits addition of the apportioned value of tools, dies and moulds supplied free by the buyer as additional consideration for determining assessable value. That deeming fiction operates only for excise valuation because excise is a duty on manufacture and value addition. The sales tax statute contains no comparable provision, and notional additions created for excise purposes cannot be bodily lifted into sales tax valuation. The mould cost was incurred by the customer, not by the assessee, and therefore could not be treated as part of the assessee's sale consideration.

Conclusion: The amortisation cost of the moulds was not includible in the sale price under the U.P. Trade Tax Act, 1948, and the contrary view was ; the issue was answered in favour of the assessee.

Final Conclusion: The appeals succeeded, the High Court's view on includibility of amortised mould cost was set aside, and the tax demand based on that addition could not stand.

Ratio Decidendi: A valuation fiction created for excise duty purposes cannot be imported into a sales tax statute unless the latter expressly provides for inclusion of such notional consideration in turnover or sale price.

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