1960 (11) TMI 92 - HC - VAT and Sales Tax

Summary

Issues:
- Whether gunny bags sold along with rice attract sales tax under the General Sales Tax Act, 1125.

Analysis:
The judgment pertains to petitions under section 15-B of the General Sales Tax Act, 1125, seeking a revision of orders by the Sales Tax Appellate Tribunal. The central issue in both cases is whether the gunny bags sold along with rice are subject to sales tax under the Act. The Tribunal held that the tax is applicable, which is being challenged. It is established that the rice itself is exempt from taxation under Section 5(vi) of the Act. The petitioners did not charge separately for the gunny bags but the bags' value was not indicated to be given for free. The Tribunal concluded that the price per bag of rice includes both the rice and the bags, justifying the tax imposition.

The definition of "dealer" under section 2(d) of the Act includes persons engaged in buying or selling goods, encompassing the petitioners. The term "goods" under section 2(e) covers all movable property, including rice and gunny bags. As the petitioners sell rice in gunny bags with a composite price, they are considered dealers in both rice and bags. The Act imposes tax on a dealer's turnover, defined in section 2(k) as the total amount for which goods are bought or sold. The transactions involving the sale of rice and gunny bags qualify as sales under section 2(j) of the Act, subjecting the turnover to sales tax.

The judgment references various cases from the Sales Tax Cases, emphasizing the applicability of the Act's provisions to the present scenario. The petitioners argued for an integrated commodity concept, suggesting the exemption for foodgrains should extend to the bags. However, the court held that the bags do not lose their identity when packed with foodgrains, rejecting the extension of the exemption. Consequently, the petitions were dismissed with costs, upholding the imposition of sales tax on the turnover involving the sale of gunny bags along with rice.