Octroi duty included in sale price for sales tax purposes when it merges into the sale consideration.

Octroi duty recovered by a dealer, even if separately shown at the point of sale, forms part of the sale price where it merges into the sale consideration. Following the earlier Division Bench view, the Orissa High Court held that such amount must be included while determining tax liability under the Orissa Sales Tax Act, 1947. The question was answered in the affirmative, in favour of the Revenue.

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Issues: Whether the amount paid by a dealer by way of octroi duty forms part of the sale price under the Orissa Sales Tax Act, 1947.

Analysis: The Court followed the earlier Division Bench view that octroi does not cease to be part of the sale consideration merely because it is separately charged at the point of sale. The amount merges into the sale price and must be taken into account while determining the tax liability.

Conclusion: The question was answered in the affirmative, and octroi duty was held to form part of the sale price under the Orissa Sales Tax Act, 1947, in favour of the Revenue.

Ratio Decidendi: An amount recovered as octroi duty, even if separately shown, forms part of the sale price for sales tax purposes when it merges into the consideration for the sale.

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