1966 (7) TMI 72 - HC - VAT and Sales Tax

Summary

Issues:
1. Inclusion of packing materials as raw materials in the registration certificate under the Madhya Pradesh General Sales Tax Act, 1958.

Analysis:
The petitioner, a manufacturer of boot polish, sought to include tin-plates, labels, aluminium-foils, box-board, and grayboard as raw materials in the registration certificate under the Sales Tax Act. The petitioner claimed these materials were utilized in the manufacturing process. However, the Sales Tax Officer denied the inclusion, leading the petitioner to file a writ petition under Articles 226 and 227 of the Constitution seeking a mandamus to direct the authorities to include the mentioned articles in the registration certificate.

Section 8 of the Sales Tax Act provides for the taxation on the sale or purchase of raw materials for manufacturing goods. The Act defines "manufacture" and "raw material" explicitly. The court noted that the packing materials in question, such as tin-dibbies and cartons, were used for packing the boot polish and not in the actual manufacturing process of the polish. The court referenced a previous judgment to emphasize that goods used in the manufacturing process are considered raw materials, and packing materials do not fall under this category. The court concurred with this interpretation, stating that packing materials are not ingredients in the manufacture of goods nor consumed in the manufacturing process.

The court concluded that the petitioner's contention that the packing materials were used in the manufacture of boot polish could not be sustained based on the definition of raw material under the Act. As a result, the petition was dismissed with costs imposed on the petitioner. The court ordered the refund of any outstanding security deposit after deducting the costs.

In summary, the court held that packing materials like tin-plates, labels, and cartons do not qualify as raw materials under the Sales Tax Act for inclusion in the registration certificate of a manufacturer, as they are not used as ingredients in the manufacturing process or consumed during manufacturing.