Price-equalisation pool receipts are not sale consideration and do not enter taxable turnover for sales tax purposes.

Amounts received from a price-equalisation pool, reflecting the difference between retention price and ex-refinery price, are not part of sale consideration where the refinery sells at the government-fixed ex-refinery price and title passes on payment of that price. The pool receipt is a compensatory adjustment under the pricing scheme, not a payment from the buyer under the bargain of sale. Its accounting treatment does not change its legal character. On that basis, such receipts do not form part of sale price or turnover and are not liable to sales tax.

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Issues: Whether the amount received by the refinery from the oil pool account, representing the difference between retention price and ex-refinery price, formed part of the sale price or turnover and was taxable under the Assam (Sales of Petroleum and Petroleum Products including Motor Spirit and Lubricants) Taxation Act, 1955 and the Central Sales Tax Act, 1956.

Analysis: The refinery sold its products to IOC at the ex-refinery price fixed by the Government, and title passed on payment of that price. The additional amount received from the oil pool account was not received from the purchaser as part of the bargain for sale, but was an adjustment under the pricing scheme to equalise realisation with the fixed retention price. The manner in which the amount was shown in the accounts did not alter its true legal character. The difference between retention price and ex-refinery price was treated as a compensatory payment under the pool mechanism and not as a component of sale consideration.

Conclusion: The amount received from OCC was not part of the sale price or turnover and was not liable to tax.

Final Conclusion: The appeals failed, and the tax authorities could not include the pool-account receipts in the taxable turnover of the refinery.

Ratio Decidendi: A payment received from a price-equalisation pool, being compensation or subsidy for shortfall in realisation and not consideration from the buyer, does not constitute sale price or turnover for sales tax purposes.

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