Inclusive levy rice price and embedded tax component barred separate recovery by an exempt rice miller.

The levy rice procurement price was fixed as inclusive of all taxes, and the costing sheet showed that the tax element was already embedded in the procurement price. On that basis, an exempt rice miller could not separately demand recovery of the deducted tax component from the buyer, because any tax collected by an exempt dealer would not be retainable and would attract unjust enrichment principles. The High Court distinguished authority dealing with a seller-fixed price, since here the buyer had fixed the price and tax was built into it. The challenge failed and the petitions were rejected.

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Issues: Whether the price fixed for levy rice included the tax component, and whether an exempted rice miller could recover from the buyer the amount deducted towards tax from the sale bills.

Analysis: The price communicated by the Government for levy rice expressly stated that it was inclusive of all taxes, including taxes leviable at the rice stage. The costing sheet also reflected that tax was built into the procurement price. The petitioner, though exempted from payment of sales tax, could not therefore claim that the buyer must pay an additional tax component to it. Any tax collected by an exempt dealer would in any event not be retainable by it and would attract the principle of unjust enrichment. The reliance on the decision concerning a seller-fixed price was distinguished because, here, the buyer had fixed the price and the tax element was already embedded in that price.

Conclusion: The petitioner was not entitled to recover the deducted amount from the buyer, and the challenge failed.

Final Conclusion: The levy rice procurement price was held to include the tax component, and the writ petitions were rejected.

Ratio Decidendi: Where the levy procurement price is fixed as inclusive of all taxes and the tax component is already embedded in that price, an exempted dealer cannot separately recover that component from the buyer.

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