9911796707
TMI Blog1973 (6) TMI 65X X X X Extracts X X X X X X X X Extracts X X X X ..... ne, 1964, and March, 1965. On the basis of estimate representing the sale price of gunny bags, assessment was made and extra tax was demanded. 3. The assessees in their respective appeals to the first appellate authority contended that there was no agreement for sale of gunny bags, the estimate adopted was arbitrary and without any basis and at any rate in respect of gunny bags, there was no liability of tax. The first appellate authority negatived the contentions of the assessees and upheld the assessments. Thereupon each of the assessees appealed to the Tribunal. The Sales Tax Tribunal disposed of many of these appeals by a common judgment as in its view common questions of fact and law fell to be determined therein. As far as relevant for the present question, the Tribunal held: "........A copy of the bill which was produced by the appellant Laxmi Rice Mill (assessee in S.J.Cs. 205 to 207 of 1970) before the first appellate authority (referred to in his order), shows one head towards cost of rice and one head towards cost of gunny bags. Evidently that was under the contract either explicit or implied. Rather the contract was over a particular quality of gunny bags. Clause ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... mpetent and we should decline to answer the question. Indisputably, questions of fact are not referable and even if a question of fact is referred to us, we have no jurisdiction to entertain such reference. Strong reliance is placed by the learned standing counsel for the revenue on the decision of the Supreme Court In the case of Sree Meenakshi Mills Ltd. v. Income-tax Commissioner[1957] 31 I.T.R. 28 (S.C.); A.I.R. 1957 S.C. 49., where dealing with a reference made under section 66 of the Indian Income-tax Act of 1922, the court said: "...The point for decision is whether there arises out of the order of the Tribunal any question which can be the subject of reference under section 66(1) of the Act. Under that section, it is only a question of law that can be referred for decision of the court, and it is impossible to argue that the conclusion of the Tribunal is anything but one of fact. It has been held on the corresponding provisions in the English Income Tax statutes that a finding on a question of fact is open to attack as erroneous in law only if it is not supported by any evidence, or if it is unreasonable and perverse, but that where there is evidence to consider, the deci ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Officer to prove that a turnover is liable to tax. No doubt he can ask the assessee to produce the relevant material; and if he does not produce the same, he may draw adverse inference against him. But, he must decide the crucial question whether the packing materials were subject of the agreement of sale, express or implied. To ascertain the said fact he can rely upon oral statements, accounts and other documents, personal enquiry and other relevant circumstances such as the nature and the purpose of the packing materials used." The result of the analysis so ably indicated in Sree Meenakshi Mills' case[1957] 31 I.T.R. 28 (S.C.); A.I.R. 1957 S.C. 49. cannot at all be doubted. The observations made in the tobacco case, referred to above, however, cannot be taken to support the learned standing counsel on the preliminary question. In fact the Supreme Court after laying down the test in the following terms, "The learned Judges, though they differed on the facts, accepted the principle that to attract sales tax the packing material or the container, as the case may be, should have been the subject-matter of an agreement to sell.........." remanded the matter to the High Court for a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... aterials was exigible to tax. We do not think it at all necessary to refer to the catena of decisions in view of the agreed position that the test which we have referred to above is the proper one to be applied. We shall, however, in brief refer to a decision of this court in the case of Shamsuddin Akbar Khan Co. v. State of Orissa[1970] 26 S.T.C. 280., and a few recent decisions of other High Courts and of the Supreme Court. 7.. The last proviso to section 5(1) of the Act is to the following effect: "5. (1) The tax payable by a dealer under this Act shall be levied at the rate of 2 per cent on his taxable turnover............: Provided also that the sale of containers of taxable goods, when sold with such goods but not charged separately, shall be subject to payment of tax at the same rate as the goods contained therein." In the present case, as we have already indicated, the bill clearly shows two separate heads-one for the goods contained in the gunny bags and the other item relating to incidental charges including sewing, packing, etc. If it can be found as a fact that there was a stipulation for sale of gunny bags, either express or implied, in respect of the transac ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... to how much of it, if at all, is with reference to the gunny bag. Prima facie, there is no intrinsic evidence in the bill that the gunny has been separately charged for. The Tribunal in making an analysis of the bill stated: "This bill shows that incidental charges have been charged separately. Sewing and bagging presupposes supply of gunny bags and that read with total amount including price of gunny as mentioned in the Orissa Rice (Maximum Prices) Order of 1964, quoted above, hardly leaves any scope for the contention that gunny bags have not been paid for or that there was no agreement to sell gunnies as such or that gunny bags have only passed as mere containers and no price has been charged for the same." The conclusion which the Tribunal has reached does not flow out of the bill or, as we have already indicated, from the Orissa Rice (Maximum Prices) Order, 1964. What was necessary to be established was that there was a contractexpress or implied-of sale of the gunny bags by way of containers and as indicated by the Supreme Court in Hyderabad Deccan Cigarette Factory v. The State of Andhra Pradesh [1966] 17 S.T.C. 624 (S.C.)., the burden lay on the Sales Tax Officer to pr ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tte Factory v. The State of Andhra Pradesh[1966] 17 S.T.C. 624 (S.C.)., that merely because the bill separately showed expenses for the use of packing, it did not mean that there was any contract of sale-express or implied-in respect of gunny bags. The value of packing materials was so insignificant to the value of the contents that it is not possible to imply any separate contract of sale regarding the packing materials. He also relies upon a decision of the Kerala High Court in the case of Tushar Trading Co. v. State of Kerala[1971] 28 S.T.C. 214., where the law has been so laid down relying upon the decision of the Supreme Court. It is a matter for the Tribunal to take into consideration if an enquiry is ultimately to be undertaken by the Tribunal and we need not deal further with this aspect of the matter. 10.. A Bench of this Court in the case of Shamsuddin Akbar Khan Co. v. State of Orissa[1970] 26 S.T.C. 280., in paragraph 7 of the judgment has indicated: ".......The taxing authority must establish that there was an intention to sell either express or implied. Admittedly, there is no express agreement to sell containers. The question is whether there is any implied agree ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... missioner of Sales Tax, Bihar[1963] 14 S.T.C. 316 (S.C.)., and Chittar Mal Narain Das v. Commissioner of Sales Tax[1970] 26 S.T.C. 344 (S.C.). of their own court, the learned judges came to hold that with regard to cement there can be no sales exigible to sales tax. Then the learned judges dealt with the question of exigibility of sales tax over the turnover of the packing material. The Central Government's direction under the Cement Control Order of 1958 was extracted which ran thus: "Packing charges for cement for period commencing First April to Thirtieth June, Nineteen Fiftynine, will be Rupees Eleven Decimal Five Four (Rs. 11.54) per ton in New Gunny Bags." On 24th June, 1959, the packing charges were revised to Rs. 11.04 per ton in new gunny bags. This rate was subsequently revised again on the acceptance of the Tariff Commission's recommendations and the rate became Rs. 17 per ton from 20th February, till 31st March, 1961. The learned Judges stated: ".......From these orders, it is clear that the Government of India was purporting to fix the price of the gunny bags in which the producers were required to supply cement to the State Trading Corporation. The learned Advoc ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
