2001 (9) TMI 1101 - HC - VAT and Sales Tax

Summary

Issues involved:
Interpretation of section 3(7) of the Tamil Nadu General Sales Tax Act, 1959 regarding turnover of bottles containing intravenous fluids.
Applicability of section 7-A(1)(a) in relation to purchase tax on goods used in manufacturing.

Interpretation of section 3(7):
The judgment discusses the inclusion of turnover of bottles containing intravenous fluids in the total turnover as per section 3(7) of the Act. It deems the container to be part of the contents for tax purposes and subjects the entire turnover to tax at the rate applicable to the goods contained.

Applicability of section 7-A(1)(a):
The judgment analyzes the demand for purchase tax on bottles used in manufacturing intravenous fluids. It delves into the interpretation of section 7-A(1)(a) which creates a liability on dealers for goods not taxed due to specific circumstances. The court examines the legislative intent behind the provision and concludes that the bottles used in manufacturing are subject to purchase tax under this section.

Key Points:
- The Supreme Court precedent in Premier Breweries v. State of Kerala is cited to support the taxation of packing materials along with the goods contained.
- The judgment highlights the necessity of containers like bottles in the manufacturing process, drawing on legal principles from J.K. Cotton Spinning & Weaving Mills Co. Ltd. v. Sales Tax Officer, Kanpur.
- The court dismisses the argument that the assessee would face double taxation, emphasizing that the inclusion of bottle turnover is not an additional burden but a standard practice to prevent revenue loss.

Conclusion:
The court dismisses the writ petition, affirming the application of purchase tax on bottles used in manufacturing intravenous fluids under section 7-A(1)(a) and upholding the interpretation of section 3(7) regarding turnover calculation.