Purchase tax on mohua flowers includes only royalty paid to the owner, not labour payments to collectors.

For purchase tax on mohua flowers, the taxable purchase price was confined to the consideration paid to the owner of the goods. As the State Government was the owner, only the royalty paid to it for the right to collect and trade in mohua flowers could enter the purchase price. Payments made by the purchaser to collectors towards labour were not consideration paid to the owner and could not be included in the taxable turnover. On that basis, the revision orders were held unsustainable and were quashed, and the tax appeal succeeded.

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Issues: Whether, for levy of purchase tax on mohua flowers, the purchase price was to be confined to the royalty paid to the State Government or whether payments made to collectors of mohua flowers towards labour could also be included in the taxable consideration.

Analysis: The assessment and the suo motu revision proceeded on different bases for valuing the mohua flowers. The Court followed its earlier decision on the same subject and held that, for the purpose of purchase tax, the relevant consideration is the amount paid by the purchaser to the owner of the goods. Since the State Government was the owner and royalty was the only consideration paid to it for the right to collect and trade in mohua flowers, that royalty alone could form part of the purchase price. Amounts paid by the Corporation to the collectors towards labour did not represent consideration paid to the owner and therefore could not be added to the taxable turnover.

Conclusion: The revision orders were unsustainable and were quashed; the tax appeal was allowed in favour of the appellant.

Final Conclusion: Purchase tax on mohua flowers had to be computed only on the royalty paid to the State Government, excluding labour payments made to collectors from the purchase price.

Ratio Decidendi: For purchase tax, only the consideration paid to the owner of the goods constitutes the purchase price, and payments made to third parties for collection or labour do not form part of that consideration.

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