Market fee recovered from purchaser does not form part of sale price when statute requires remittance to the authority.

Mandi Shulk recovered by a commission agent from the purchaser did not form part of sale price under the Uttarakhand Value Added Tax Act, 2005 because the statutory scheme under the market fee provisions authorised collection of the levy for remittance to the Market Committee, not as consideration accruing to the dealer. Applying the principle that a levy recoverable from the purchaser and payable to a statutory authority is excluded from turnover, the Court held the amount non-includible in sale price and rejected the earlier contrary view. The revision was allowed and the assessment and appellate orders were set aside.

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Issues: Whether Mandi Shulk collected by the commission agent from the purchaser formed part of the sale price under the Uttarakhand Value Added Tax Act, 2005.

Analysis: The definition of sale price under Section 2(42) of the Uttarakhand Value Added Tax Act, 2005 was read with the market fee mechanism under Section 17(iii)(b) of the Uttar Pradesh Krishi Utpadan Mandi Adhiniyam, 1964. The statutory scheme authorized the commission agent to realize the market fee from the purchaser and to remit it to the Market Committee, so the amount did not accrue to the dealer as part of its own consideration. The Court applied the principle that where a statute permits recovery of a levy from the purchaser, the recovered amount does not form part of turnover or sale price for sales tax purposes. The contrary view taken earlier was held not to be correct.

Conclusion: Mandi Shulk was held not includible in the sale price, and the revision was allowed by setting aside the assessment and appellate orders.

Ratio Decidendi: A statutory levy that a dealer or commission agent is authorized to recover from the purchaser and remit to the statutory authority does not constitute part of the sale price or taxable turnover.

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