Controlled pricing compensation from a pool account is not sale consideration and cannot be treated as taxable turnover.

Amounts received by a refinery from the pool account under a government oil pricing scheme were not part of the sale price or taxable turnover for sales tax purposes. The statutory definitions covered only the money consideration paid by the purchaser for taxable goods, while the pool account payment operated as an adjustment to compensate the refinery for loss caused by controlled pricing and a retention price higher than the fixed sale price. Applying the distinction between sale consideration and compensatory receipt, the court held that such payment could not be included in turnover, and the assessment and revisional orders taxing that amount were without jurisdiction.

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Issues: Whether the amount received by the refinery from the pool account maintained under the oil pricing scheme formed part of the sale price and taxable turnover, so as to justify levy of sales tax under the relevant taxing statutes.

Analysis: The statutory scheme defined sale price as the money consideration for sale of taxable goods and turnover as the aggregate of sale prices or parts of sale prices. The price of petroleum products was fixed by the Government, and the pool account was created to compensate refineries whose retention price exceeded the controlled sale price. The amount received from the pool account was not an amount paid by the purchaser as consideration for the goods sold, but an adjustment or compensatory payment to offset loss arising from the controlled pricing mechanism. On the settled distinction between consideration for sale and subsidy or compensation, such receipt could not be treated as sale price or turnover. The assessment orders and revisional order therefore lacked jurisdiction to tax that amount.

Conclusion: The amount received from the pool account did not form part of sale price or turnover, and the levy of tax on that amount was unsustainable; the assessee succeeded.

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