1976 (2) TMI 88 - AT - VAT and Sales Tax

Summary

Issues:
1. Exemption on turnover of Nirodh advertisement and publicity materials.
2. Exemption on turnover of reading books.
3. Taxability of packing charges.

Analysis:

Exemption on Nirodh Advertisement and Publicity Materials:
The appeal involved a dispute regarding the exemption on a turnover of Nirodh advertisement and publicity materials. The AAC had denied the exemption, stating that Nirodh containers did not qualify as publicity materials. However, upon examination in court, it was found that the Nirodh container itself contained symbols related to family planning advertisement, making it an integral part of the publicity materials. The Tribunal held that the container should be exempted as per the relevant notification, directing the exclusion of the sum from the taxable turnover.

Exemption on Reading Books:
Another issue pertained to the eligibility of a booklet published by T.T. Private Limited, related to Preett Prestige Cookers, for exemption as a reading book. The Tribunal referred to a judgment of the Kerala High Court, which defined reading books as those used for education, knowledge, enlightenment, or recreation. The booklet in question, primarily aimed at promoting sales of Prestige Cookers and not available for public sale, was deemed an advertisement pamphlet rather than a reading book. The Tribunal upheld the assessment disallowing exemption for this booklet and similar publications by other companies.

Taxability of Packing Charges:
The final issue revolved around the treatment of packing charges under the CST Act. The AAC had included packing charges in the taxable turnover, considering them as part of the sale price. The appellants argued that packing charges were for delivery and fell within the admissible charges under the Act. The Tribunal agreed with the appellants, noting that the relevant Government Order was in force during the assessment year, making the appellants eligible for the exemption on packing charges. Consequently, the Tribunal set aside the AAC's order on this point.

In conclusion, the Tribunal partly allowed the appeal, granting exemption on Nirodh advertisement and publicity materials, but upholding the taxability of certain booklets as they did not qualify as reading books. Additionally, the Tribunal ruled in favor of the appellants regarding the taxability of packing charges, considering them eligible for exemption under the CST Act.