2004 (12) TMI 363 - SC - VAT and Sales Tax

Whether card-board box is covered by the entry card board ? Whether item carton appearing at serial No. 12 of the notification would include card board box ? Held that - There cannot be universal application of any rigid standard for determining the question and has to be decided on the factual background of each case. This has not been done. The type of card board box which was used for packing the product of the appellant has to be seen. Therefore, we think it appropriate to direct the Deputy Commissioner of Sales Tax to consider the question whether the card board box used by the appellant fits in with the definition of carton taking into account the product which is packed. For this purpose, the appellant shall be granted opportunity to substantiate its plea that the card board boxes used by it are not factually covered by the entry cartons .

Issues Involved:
1. Applicability of Notification No. S.O. 154, dated January 28, 1985, under section 13(1) of the Bihar Finance Act, 1981.
2. Inclusion of packing materials made out of paper in the registration certificate.
3. Distinction between "cardboard" and "cardboard boxes."
4. Legislative intent and interpretation of statutory notifications.
5. Whether "carton" includes "cardboard box."

Detailed Analysis:

1. Applicability of Notification No. S.O. 154, dated January 28, 1985, under section 13(1) of the Bihar Finance Act, 1981.
The appellant, a registered dealer under the Bihar Finance Act, 1981, and the Central Sales Tax Act, 1956, challenged the applicability of Notification No. S.O. 154, dated January 28, 1985, which excluded paper and paper products from the operation of section 13(1) of the Act. The notification was issued under the proviso to section 13(1) of the Act, which allows the State Government to exclude any goods from the concessional rate of tax. The High Court held that the notification remained applicable even after the insertion of section 13(1)(e) by the Bihar Finance (Amendment) Act, 1985, effective from August 1, 1985.

2. Inclusion of Packing Materials Made Out of Paper in the Registration Certificate.
The appellant sought to include packing materials made out of paper in the registration certificate under column 13, which was denied by the Deputy Commissioner. The Deputy Commissioner allowed the inclusion of other packing materials like plastics, polybags, gunny bags, etc., but rejected the inclusion of paper-based packing materials. The appellant argued that its predecessor had been granted such concessions and that the notification should not override section 13(1)(e).

3. Distinction Between "Cardboard" and "Cardboard Boxes."
The appellant argued that "cardboard boxes" are different from "cardboard," citing a previous High Court decision in Card Board Products v. State of Bihar [1989] 73 STC 438 (Patna). The High Court had previously held that "cardboard boxes" are distinct from "cardboard" and should not be excluded under the notification. The appellant contended that the term "carton" used in the notification also does not include "cardboard boxes."

4. Legislative Intent and Interpretation of Statutory Notifications.
The State argued that the notification intended to exclude all paper products to protect trees and forests, promoting the use of substitutes for paper as packing materials. The appellant countered that the legislative intent should be derived from the clear wording of the notification and the statute. The Supreme Court emphasized that in a taxing statute, there is no room for intendment, and the language of the notification must be clear and unambiguous.

5. Whether "Carton" Includes "Cardboard Box."
The Supreme Court noted that the term "carton" needs to be understood in its common parlance and commercial sense. Various dictionary definitions were considered to determine the meaning of "carton." The Court found that the term "carton" generally refers to a light container made of cardboard or similar material. However, the specific type of cardboard box used by the appellant for packing biscuits needed to be examined to determine if it falls under the definition of "carton."

Conclusion:
The Supreme Court directed the Deputy Commissioner of Sales Tax to re-examine whether the cardboard boxes used by the appellant fit the definition of "carton" based on the product being packed. The appeal was disposed of with no costs, and the matter was remanded for further factual determination.

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