Mining cess excluded from sale price where it is not part of sale consideration and no sham pricing is shown.

Cess paid for chrome ore extraction is not part of the sale price where it is incurred for mining operations and not as consideration for the sale itself. The sale price covers consideration for goods sold, including amounts directly connected with the sale or incurred before completion of sale for selling the goods, but not a separate levy on extraction absent evidence that the stated price is a sham or disguised consideration. Accordingly, such cess cannot be added to gross or taxable turnover for sales tax purposes.

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Issues: Whether the amount paid as cess for extraction of chrome ore could be included in the sale price and consequently in the gross and taxable turnovers for levy of sales tax.

Analysis: Sale price means the consideration for which goods are sold and may include amounts directly connected with the sale or done prior to completion of sale for the purpose of selling the goods. Cess paid for mining operations is not a payment made as a condition of sale; it is incurred for extracting the ore from the mines. In the absence of any finding that the apparent sale price was a sham or that the agreement between the parties was a subterfuge concealing the real consideration, the cess could not be treated as part of the sale price merely because it was computed with reference to the quantity of ore extracted or was collected earlier to the sale.

Conclusion: The cess could not be included in the sale price or taxable turnover, and the question was answered in the negative in favour of the assessee.

Ratio Decidendi: Amounts paid for mining or extraction operations, which are not part of the consideration for sale and are not shown to be a disguised component of the sale price, cannot be included in turnover merely because they are incurred before the sale and are linked to the quantity produced.

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