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TMI Blog1971 (10) TMI 98X X X X Extracts X X X X X X X X Extracts X X X X ..... sh and was sold in the course of inter-State sale? (4) Whether, on the facts and circumstances of the case, hessian used in packing material did not fall in the category of 'cloth' for purposes of entry No. 6, Schedule I, to the State Act? (5) Whether, on the facts and circumstances of the case, the assessee could not be treated as a dealer in packing materials in respect of which there were only casual sales? (6) Whether, on the facts and circumstances of the case, sale of 1,300 cotton bales (1964-65 case under the Central Act) could be treated as complete on the date of despatch of the same from the State or after reaching destination, i.e., after 16th January, 1965, and taxable accordingly?" 2.. M/s. Patel Volkart Private Limited, Ujjain, and M/s. Patel Cotton Co. (Pvt.) Limited, Ujjain, are dealers and carrying on the business of purchase and sale of cotton bales. The finding of the Board of Revenue with respect to the agreement of sale of cotton bales by the assessee to various mills was to the following effect: "It is, however, admitted by the applicant that it was obligatory on his part to deliver the cotton to the purchaser fully pressed in the form of bales alo ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... siness of the assessee. When the packing material is also sold along with the bales, by no stretch of imagination can it be said that the sale of the packing material is casual. The answer to question No. (5), therefore, is that the sales of packing material were not casual sales. 6.. As to question No. (6), it may be observed that the finding of the Tribunal was that the contract by the assessee with the purchaser was to deliver the goods at the destination; hence the rate available on the date the goods were loaded in the railway wagons could not be availed of and that the rate which was in operation on the date the delivery was actually made at the destination was applicable, and the delivery having been made at the destination after 16th January, 1965, the rate applicable after that date was properly applied. It was urged on behalf of the assessee that the Central sales tax is imposed on the movement of the goods, and hence the date of the movement is the material date for deciding the rate at which the goods can be charged. This contention cannot be accepted. The tax is leviable on the sale of goods and not because of the movement of the goods. It must, therefore, be seen as ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... an integral part of the works contract or it was extraneous to it; and that if it was an integral part, then no agreement for sale can be inferred; but if it was not so, then an implied contract of sale could be inferred. It was further held that where the assessee, who carried on the business of ginning and pressing cotton, wrapped the ginned cotton in hessian cloth and then the bales were secured with iron hoops, there was an implied contract to sell the packing material and the sale was liable to tax. In the second Nimar Cotton Press case(2), reference was made to the decision in M.S. Chidambara Nadar Sons Co. v. State of Madras[1960] 11 S.T.C. 321., in which it was held that where under an agreement to purchase cotton to be delivered by the seller to the buyer it was implicit that the goods should be delivered packed, the contract to pay for and purchase the packing material may be implied and the turnover relating to the packing material would be liable to sales tax. It was also noted that the Madras case was quoted, with approval, by their Lordships of the Supreme Court in Government of Andhra Pradesh v. Guntur Tobaccos Ltd.[1965] 16 S.T.C. 240 (S.C.). It is thus clear that ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ement to sell the packing material as well. But where the contract specifically speaks of the cloth or the cotton being delivered packed in the manner prescribed, an inference can be legitimately drawn that there was also an implied agreement to transfer the packing material as well. We are, therefore, of the opinion that there is no conflict between the recent decision in M/s. Binod Mills case(1) and the previous decisions of this court. We are also of the opinion that on the facts and in the circumstances of the case the Tribunal has rightly come to the conclusion that there was an implied contract to sell the packing material as well. In our opinion, the dictum laid down by the Supreme Court in Government of Andhra Pradesh v. Guntur Tobaccos Ltd.[1965] 16 S.T.C. 240 (S.C.). has not been, in any way, modified by its subsequent decision in Hyderabad Deccan Cigarette Factory v. State of A.P.[1966] 17 S.T.C. 624 (S.C.).or (1) Miscellaneous Civil Case No. 198 of 1970 decided on 2nd August, 1971; since reported in [1972] 29 S.T.C. 413. the recent decision in State of Madras v. The Cement Allocation and Co-ordinating Organisation[1972] 29 S.T.C. 114 (S.C.); (1971) 2 S.C.C. 587. The law ..... X X X X Extracts X X X X X X X X Extracts X X X X
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