Taxable purchase price turns on actual consideration paid or payable, not a circular or subsidy label.

For sales tax purposes, the taxable purchase value of sugarcane depends on the actual consideration paid or payable on the facts found, not on a circular or subsidy label. The Karnataka High Court text notes that the authorities treated the alleged incentive payment as a post-purchase subsidy rather than a deductible element of purchase price, and applied the principle that the real transaction price governs tax computation. On that basis, the purchase price was determined at Rs. 390 per MT and upheld as the relevant tax base under the Karnataka Sales Tax Act, 1957.

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Issues: Whether the authorities were justified in determining the purchase price of sugarcane at Rs. 390 per MT for levy of tax under the Karnataka Sales Tax Act, 1957, notwithstanding the Government circular and the contention based on section 3-A of the Act.

Analysis: The assessment authority, appellate authority, and Tribunal all proceeded on the factual price actually paid or payable by the sugar factory to the cane growers, and treated the alleged Rs. 12 per ton incentive as a subsidy or post-purchase payment rather than a deductible component of the purchase price. The governing circular did not override the factual finding as to the real consideration for supply of sugarcane. The applicable principle, as reflected in the cited Supreme Court authority, is that the tax base depends on the actual price paid in the facts of the case, and a higher amount agreed or paid on the evidence can constitute the price for tax purposes.

Conclusion: The determination of purchase price at Rs. 390 per MT was upheld. The issue was decided against the assessee and in favour of the Revenue.

Ratio Decidendi: For sales tax purposes, the taxable purchase value is the actual consideration paid or payable on the facts found, and a Government subsidy or circular does not control that determination where the payment forms part of the real transaction price.

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