2016 (7) TMI 882 - HC - VAT and Sales Tax

Classification - sales of printed laminated paper rolls along with ploythelene strip bobbins - whether falls within the entry cardboard boxes and cartons falling within Entry 12(iv) Schedule IIA of the Gujarat Sales Tax Act, 1969 - Held that - In the case of Lt. Governor, Delhi and others v. Messrs. Ganesh Flour Mills Co. Ltd. 1973 (1) TMI 74 - SUPREME COURT OF INDIA it was observed that, Packing materials are necessary not only for solid articles but also for those in liquid and semiliquid form. As the Tinsheets and Tinplates were intended to be used for packing of vegetable products, the respondent was entitled to the benefit of clause (c) of Section 8(3). - Learned AGP was not in a position to differentiate the aforesaid proposition of law, as may warrant us to take a different view.

Summary

Issues:
Interpretation of sales tax entry for printed laminated paper rolls and polythene strip bobbins.

Analysis:
The Gujarat Sales Tax Tribunal referred a question of law regarding the classification of sales of "printed laminated paper rolls along with polythene strip bobbins" under the Gujarat Sales Tax Act. The respondent, a unit of the Indian Dairy Corporation, supplied packaging materials for aseptic packaging of milk. The Sales Tax Officer levied tax for the relevant assessment years, which was challenged by the assessee through appeals to the Commissioner of Sales tax and subsequently to the Tribunal. The Tribunal allowed the appeals, leading the State to file Reference Applications, which were rejected by the Tribunal. The State then filed Sales Tax Applications before the High Court, which directed the Tribunal to refer the question of law to the Court.

The assessee argued that the issue was settled by a judgment of the Delhi High Court in a similar case involving packing materials for vegetable products. The Delhi High Court held that materials intended for packing of goods for sale, even if they require further processing before use as containers, fall under the category of packing materials. The High Court concurred with the Delhi High Court's decision, stating that the process of cutting and molding materials for packing does not change their nature as intended for packing goods for sale. As the printed laminated paper rolls were intended for packing milk products, they fell within the relevant sales tax entry.

In conclusion, the High Court answered the question in favor of the assessee and against the Revenue, disposing of the reference accordingly. The judgment relied on the interpretation of packing materials for sale established in a previous Delhi High Court case to classify the printed laminated paper rolls correctly under the applicable sales tax entry.