Advance against future cane-price liability is not sale consideration or taxable turnover when paid over the statutory minimum price.

Excess payment by a sugar factory over the minimum cane price fixed under clause 3 of the Sugarcane (Control) Order, 1966, was treated as an advance against a possible future liability under clause 5-A, not as sale price. The minimum price at delivery was the contractual and statutory consideration, while the additional price had to be determined later on the basis of the statutory formula and seasonal results. Because the excess was separately recorded, subject to adjustment, and paid under State pressure rather than as a voluntary agreed price, it did not form part of the sale consideration or taxable turnover under the Tamil Nadu General Sales Tax Act, 1959.

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Issues: Whether the amount paid by the sugar factory over and above the minimum sugarcane price fixed under clause 3 of the Sugarcane (Control) Order, 1966, and described as an advance against probable additional price under clause 5-A, constituted price or turnover liable to purchase tax under the Tamil Nadu General Sales Tax Act, 1959.

Analysis: The minimum price under clause 3 was the statutory and contractual price payable at the time of delivery. The additional price under clause 5-A was not a provisional or interim figure; it had to be determined after the close of the sugar year on the basis of the Second Schedule formula and post-season working results. The State Government's directions to pay a higher amount had no statutory force, and the written agreements contemplated payment only at the Central Government rate. The excess amount was separately shown as advance and was intended to be adjusted against the future clause 5-A liability. Its character, mode, and manner of payment showed that it was not part of the sale consideration when paid, and the mere fact of payment did not convert it into price. The payment was also made under compulsion generated by the State directions and the threatened statutory consequences of non-payment, so it was not a voluntary agreed price. The authorities relied on by the revenue concerned variation of contract, novation, or extra payments that had become part of the agreed price, which was not the factual position here.

Conclusion: The excess paid over the clause 3 minimum price did not constitute price or turnover and was not exigible to sales tax or additional tax. The levy and assessments on that excess were unsustainable in favour of the assessee.

Ratio Decidendi: Where an excess payment is made only as an advance against a future statutory liability under clause 5-A, before that liability is finally determined, and the underlying contract and statutory scheme fix only the minimum price at delivery, the excess does not form part of the sale consideration or taxable turnover merely because it is paid and later adjusted.

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