SUPREME COURT OF INDIA

Before:- S.N. Variava and Dr. AR. Lakshmanan, S.H. Kapadia, JJ.

Civil Appeal Nos. 919-942 of 2000. D/d. 7.4.2005.

Comnr. of Taxes, Guwahati & Ors. - Appellants

Versus

Bongaigaon Refinery & Petrochemicals Ltd. - Respondent

Assam General Sales Tax Act, 1993, Sections 7,8 and 2(34) and 17 - Sales tax - Retention price - Is merely a compensation or a subsidy - Do not form part of the sales price - Not liable for taxes - Judgment of the High Court not interfered with.

[Paras 1 to 3]

Case Referred :-

Neyveli Lignite Corpn. Ltd. v. Commercial Tax Officer, (2001) 9 SCC 648.

JUDGMENT

S.N. Variava, J. - These Appeals are against the Judgment of the High Court dated 8th March, 1999. The question for consideration is whether the Appellants are entitled to charge sales tax on the retention price fixed by the Oil Co-ordination Committee. The High Court has held that sales tax is leviable on the price as fixed between the buyer and the seller as per their agreement. The High Court has held that though such price may be controlled by the Government that still remains the sales price. The High Court has held that the retention price is merely a compensation or a subsidy and that such compensation/subsidies do not form part of the sales price and are therefore not liable for taxes. The view of the High Court is fully supported by a decision of this Court in the case of Neyveli Lignite Corpn. Ltd. v. Commercial Tax Officer reported in (2001) 9 SCC 648.

2. Strenuous efforts were made to differentiate this Judgment. It was submitted that the Judgment in Neyveli Lignite Corpn. Ltd.'s case (supra) deals with the subsidy which was paid de hors the actual sales made whereas the retention price, in the present case, is based on the actual sales made. In our view, there is no difference. The retention price remains a compensation or a subsidy as the Government is not permitting the Respondent Company to sell beyond the price fixed by it. Therefore, the principles laid down by this Court in the afore-mentioned case fully apply.

3. We thus see no infirmity in the Judgment of the High Court. We see no reason to interfere.

4. The Civil Appeals are dismissed. There will be no order as to costs.

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