Government-controlled pricing defines taxable turnover by the final receivable sale price, not the provisional invoice amount.

Under a Government-controlled pricing mechanism for petroleum sales, the turnover and sale price were confined to the amount finally fixed and actually receivable, not the provisional invoiced figure. Because the seller could not realise anything beyond the quarterly price later determined by the Government and adjusted through credit or debit notes, the provisional invoice did not represent the true taxable sale price. The article rejects the view that the shortfall was merely unrealised consideration or an artificial discount, and states that tax cannot be levied on the higher provisional amount.

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Issues: Whether the amount finally fixed under the Government controlled pricing mechanism for sale of petroleum products to oil marketing companies alone formed the sale price and taxable turnover, or whether the original invoiced price could be treated as the turnover for levy of tax.

Analysis: The statutory scheme taxed the turnover of sales and defined sale price as the amount of valuable consideration received or receivable by the dealer. The pricing arrangement was not a case of a conventional trade discount granted after an agreed sale price, but of a provisional invoicing system operated under Government directions, where the final price for each quarter was later determined by the Government and adjusted by credit or debit notes. The seller had no liberty to realise any amount beyond the finally fixed price, and the provisional invoice was always subject to such adjustment. In these circumstances, the amount actually and finally receivable alone represented the sale price for purposes of turnover. The Tribunal's view that the reduced amount was merely unrealised sale consideration or an artificial discount was not accepted.

Conclusion: The final price fixed under the Government's pricing mechanism was the relevant sale price, and the demand on the higher provisional invoice amount was unsustainable. The question was answered in favour of the assessee and against the Revenue.

Final Conclusion: The appeals succeeded, the Tribunal's decision was reversed to the extent challenged, and the tax demand based on the provisional price could not stand.

Ratio Decidendi: Where a sale is made under a binding governmental price-control mechanism and the invoiced amount is only provisional pending quarterly finalisation, the turnover is confined to the finally determined and actually receivable price, not the provisional invoice figure.

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