1973 (1) TMI 74 - SC - VAT and Sales Tax

Whether the respondent cannot invoke the benefit of clause (c) of sub-section (3) of section 8 of the Act? Held that - Appeal dismissed. As the tin sheets and tin plates purchased by the respondent were intended to be used for packing of vegetable products sold by the respondent, the respondent, in our opinion, was entitled to invoke the benefit of clause (c) of sub-section (3) of section 8 of the Central Sales Tax Act, 1956 reproduced above.

Summary

Issues:
- Interpretation of clause (c) of sub-section (3) of section 8 of the Central Sales Tax Act, 1956 regarding registration certificate for packing materials.
- Whether tin sheets and tin plates qualify as materials intended for packing of goods for sale under the Act.

Analysis:
The case involved an appeal to the Supreme Court against a judgment of the Delhi High Court regarding the respondent-company's application for amending its registration certificate under the Central Sales Tax Act, 1956. The respondent sought to include tin plates or tin sheets in the certificate for packing vegetable products. The Sales Tax Officer rejected the application, stating that the goods were declared goods and could only be purchased for resale in the same form. The Commissioner and Chief Commissioner upheld this decision, leading the respondent to approach the High Court under articles 226 and 227 of the Constitution of India.

The High Court accepted the petition, emphasizing that the intention of the dealer to use materials for packing goods for sale was sufficient, even if the materials needed to undergo changes for that purpose. The Court referred to clause (c) of sub-section (3) of section 8 of the Act, which includes containers or materials intended for packing of goods for sale. The appellant argued that tin sheets and tin plates did not qualify under this clause. However, the respondent contended that these materials fell under the category of materials intended for packing.

The Supreme Court agreed with the respondent's argument, stating that once the intention to use materials for packing goods for sale was established, the clause's requirements were met. The Court noted that the respondent purchased tin sheets and tin plates to convert them into containers for filling with vegetable oil products for sale. The process of cutting and molding these materials into containers did not disqualify them as packing materials. The Court also recognized the necessity of packing materials for various types of products, including liquid and semi-liquid items.

Citing the functions and evolution of packaging materials, the Court concluded that as the tin sheets and tin plates were intended for packing vegetable products, the respondent was entitled to benefit from clause (c) of sub-section (3) of section 8 of the Act. Consequently, the appeal was dismissed, affirming the High Court's decision in favor of the respondent.

In summary, the judgment clarified the interpretation of the Act regarding materials intended for packing of goods for sale, specifically addressing the inclusion of tin sheets and tin plates as packing materials. The Court emphasized the importance of the dealer's intention to use materials for packing purposes, regardless of any modifications required, and upheld the respondent's right to amend its registration certificate accordingly.