1966 (8) TMI 58 - HC - VAT and Sales Tax

Summary

Issues:
- Deduction of value of tins from total turnover under rule 9 of Kerala General Sales Tax Rules, 1963.
- Interpretation of rule 9 regarding charges for packing and delivery.
- Applicability of charges for packing and delivery to sales of kerosene in sealed tins.
- Availability of remedies under Kerala General Sales Tax Act, 1963.

Analysis:
The case involved an appeal regarding the deduction of the value of tins from the total turnover under rule 9 of the Kerala General Sales Tax Rules, 1963. The appellant, a firm trading in kerosene, claimed a deduction of Rs. 1,80,000 for the value of tins sold along with kerosene. The Sales Tax Officer and the Appellate Assistant Commissioner rejected the claim, leading to the appeal. The central issue was the interpretation of rule 9 concerning charges for packing and delivery in the context of sales of kerosene in sealed tins.

The relevant portion of rule 9 specified deductions that could be made from the total turnover of a dealer, subject to certain conditions. The appellant contended that the value of the tins should be considered a charge for packing and delivery, eligible for deduction. However, the department argued that the value of the tins in this case did not fall under charges for packing and delivery. The court emphasized the need to determine whether the amount charged was for packing and delivering the item sold, in this case, kerosene.

The court analyzed the nature of the goods sold, distinguishing between selling kerosene in sealed tins and selling packaged articles. It concluded that when sealed tins of kerosene were sold, the articles were already packaged, and no further packing in a container was necessary. Therefore, the value of packing for packaged articles like sealed tins of kerosene did not qualify as charges for packing and delivery under rule 9.

The judgment referred to the Central Sales Tax Act, 1956, defining "sale price" and considering charges for packing materials in determining the sale price. It highlighted that the nature of the contract would determine whether charges for packing materials formed part of the sale price, emphasizing the distinction based on the type of goods sold.

Additionally, the court noted that the appellant had remedies available under the Kerala General Sales Tax Act, 1963, such as appeal to the Appellate Tribunal and revision to the High Court. Since the appellant did not pursue these remedies, the petition under Article 226 of the Constitution was considered unsustainable. Consequently, the appeal was dismissed without any order as to costs.