Market fee and cess outside taxable turnover under sales tax law; amounts paid to market committee were not part of sale consideration.

Market fee or cess paid by the purchaser to a market committee under the Tamil Nadu Agricultural Produce Marketing Regulation Act, 1987 was held to be outside the sale consideration, as it was payable for services in the regulated market and not as part of the purchase price. As a result, it did not fall within taxable turnover under the Tamil Nadu General Sales Tax Act, 1959, and could not be added for sales tax purposes. The impugned notice was therefore unsustainable.

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Issues: Whether the market fee or cess paid by the purchaser to the market committee under the Tamil Nadu Agricultural Produce Marketing Regulation Act, 1987 could be included in the taxable turnover for levy of tax under the Tamil Nadu General Sales Tax Act, 1959.

Analysis: The fee or cess was payable by the buyer under the market law and was paid to the market committee for services rendered in the regulated market. It was not part of the sale consideration or purchase price and therefore did not answer the definition of taxable turnover under the sales tax law. The Court followed the principle that an amount paid as market fee or cess, being outside the consideration for the transaction, cannot be treated as part of turnover for taxation.

Conclusion: The market fee or cess could not be included in the taxable turnover and the impugned notice was unsustainable.

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