1995 (3) TMI 448 - HC - VAT and Sales Tax

Summary

Issues:
Interpretation of entry 15, Part IV of Schedule II of the M.P. General Sales Tax Act, 1958 regarding classification of bamboo crates as packing materials before October 1, 1978.

Detailed Analysis:

1. Question of Law: The Appellate Tribunal referred the question of law to the High Court regarding the classification of bamboo crates under entry 15, Part IV of Schedule II of the M.P. General Sales Tax Act, 1958, before October 1, 1978.

2. Facts of the Case: The assessee, a registered dealer, purchased bamboos, made crates, and sold them. The dispute arose regarding the applicable sales tax rate, either 5% under entry 15 or 10% under the residuary entry in Part VI of Schedule II. The assessing authority and appellate authority levied tax at 10%, while the Tribunal ruled in favor of the assessee for tax at 5% until October 1, 1978.

3. Legal Provisions: Entry 6 of Part IV of Schedule II, prior to 1978, listed goods for use as containers and packing material. The definition of "packing material" was introduced in 1978, specifying containers or materials used in packing goods as per entry 15. The entry was amended, and the definition was renumbered as entry 15, expanding the list of goods considered as packing materials.

4. Interpretation of Entry 15: Post-October 1, 1978, entry 15 specified goods for use as containers and packing materials, intending to be exhaustive. The authority had the power to notify additional goods as packing materials. The Supreme Court's decision emphasized the exhaustive nature of entry 15, limiting the goods falling within its scope.

5. Pre-October 1, 1978 Position: Before the 1978 amendment, entry 6 did not specify bamboo crates as packing material. Hence, the residuary entry applied. The use of "that is to say" in entry 6 indicated the limited scope of goods considered as packing materials.

6. Effect of Notification: A notification on October 1, 1978, included bamboo khanchas (bamboo crates) as packing materials under entry 15. This addition was not merely clarificatory but added bamboo crates as a distinct category of packing material.

7. Judgment: The High Court ruled in favor of the Revenue and against the assessee, considering bamboo crates as packing materials under entry 15 from October 1, 1978, attracting a 5% tax rate. The question posed was answered in the negative, supporting the Revenue's position.

8. Conclusion: The High Court's decision was forwarded to the Board of Revenue, resolving the reference in favor of the Revenue. The judgment clarified the classification of bamboo crates as packing materials for sales tax purposes under the M.P. General Sales Tax Act, 1958.