1991 (7) TMI 334 - HC - VAT and Sales Tax

Summary

Issues:
1. Assessment of taxable turnover for two different assessment years.
2. Dispute regarding packing charges and freight rebate.
3. Interpretation of relevant legal provisions and case laws.
4. Claim for exemption of packing charges from taxable turnover.
5. Argument on whether packing materials can be taxed separately.

Analysis:
1. The judgment pertains to two revision cases concerning the same assessee for different assessment years. The taxable turnover for the years 1974-75 and 1976-77 was under dispute, with specific amounts related to packing charges and freight rebate being contested. The Appellate Assistant Commissioner had directed a remand for a fresh assessment to ascertain the correct turnovers based on the values of the containers involved.

2. The primary argument presented was that packing charges should not be included in the taxable turnover, especially when the packing materials are not of significant value compared to the contents being sold. The Full Bench judgment in a relevant case was cited to support the contention that no deduction for packing charges could be made as the sale was for the goods in containers. The Tribunal focused on the issue of packing charges taxable at 25 per cent, as the dispute regarding freight rebate was withdrawn by the petitioners.

3. The legal argument revolved around the interpretation of the State Sales Tax Rules and relevant case laws. The counsel for the petitioners sought to rely on a passage from a case to claim relief regarding the taxation of packing materials as an independent commodity. However, the Court found that the conditions set by the Supreme Court for treating packing materials as a separate taxable entity were not met in this case. The apex Court's requirement of separate classification of packing materials in the Schedule was not fulfilled, leading to the dismissal of the argument.

4. Ultimately, the Court rejected the contention that the sale of packing materials could be considered an independent commodity for taxation purposes. The argument that packing materials should be taxed as multi-point goods under the Act was not accepted, as the description of goods in the invoices was consistently in terms of the number of cases or crates. Consequently, the tax revision cases were dismissed, and the petitions were rejected.