Government subsidy to manufacturers is not part of turnover where it is not purchaser consideration under sales tax law.

Subsidy paid by the Government to fertilizer manufacturers was held not to form part of "turnover" under section 2(i) of the U.P. Sales Tax Act, 1948. The court reasoned that turnover covers the price paid by the purchaser in a bilateral sale transaction, whereas the government subsidy was not consideration from the buyer but support intended to keep fertilizer prices reasonable and ensure a fair return to manufacturers. The phrase "aggregate amount" in the Act was held not to alter this position, as it conveyed the same sense as the earlier statutory expression. The subsidy was therefore outside the sales tax net.

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Issues: Whether the subsidy paid by the Central Government to fertilizer manufacturers forms part of the "turnover" under section 2(i) of the U.P. Sales Tax Act, 1948 and is therefore liable to sales tax.

Analysis: The expression "turnover" was construed in the context of the statutory definition of sale and the nature of the transaction between seller and purchaser. The Court held that a sale is a bilateral transaction in which the price is the amount agreed between the parties and paid by the purchaser. The subsidy paid by the Government of India was not part of the price paid by the purchaser and was granted to keep fertilizer prices at a reasonable level and ensure a reasonable return to manufacturers. The Court rejected the contention that the words "aggregate amount" in the U.P. Act altered this position, holding that they conveyed the same sense as the relevant expression considered in earlier decisions.

Conclusion: The subsidy granted by the Government of India does not form part of turnover under section 2(i) of the U.P. Sales Tax Act, 1948, and cannot be subjected to sales tax.

Ratio Decidendi: Subsidy paid by the Government to a manufacturer, not being consideration received from the purchaser for the sale, does not constitute part of turnover under the sales tax law.

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