Market area cess collected from purchasers was excluded from sale price because the statutory burden fell on the purchaser.

Market area cess collected from purchasers and remitted to the market committee did not form part of the sale price where the statute placed the liability on the purchaser. Under the Rajasthan Agricultural Produce Markets Act, 1961 and the Rules, the dealer merely collected the cess on behalf of the committee, and Rule 59(2) treated the purchaser as liable except where the purchaser could not be identified. Because the levy was not part of the consideration for sale, it could not be included in taxable turnover. The Board of Revenue's finding was upheld.

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Issues: Whether market area cess collected by the assessee from purchasers and paid to the market committee formed part of the sale price for computing the assessee's taxable turnover.

Analysis: The decisive test is whether the statute places the liability to pay the levy on the seller or on the purchaser. Where the law authorises or requires the dealer to recover the levy from the purchaser, the amount does not become part of the consideration for sale. Under the Rajasthan Agricultural Produce Markets Act, 1961 and the Rajasthan Agricultural Produce Markets Rules, 1963, the market committee is to collect market fees in the prescribed manner, Rule 58 deals with collection of cess, and Rule 59(2) specifically places the burden of payment on the purchaser, subject to the proviso that the seller pays only if the purchaser cannot be identified. The assessee in such a case merely collects the amount on behalf of the market committee and passes it on.

Conclusion: The market area cess collected from the purchaser did not form part of the sale price and could not be included in the taxable turnover. The finding of the Board of Revenue was upheld.

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