9911796707
TMI Blog1981 (6) TMI 112X X X X Extracts X X X X X X X X Extracts X X X X ..... ioner is exempt from tax under the Central Sales Tax Act. The tax under Kerala General Sales Tax Act was sought to be imposed in respect of the purchase turnover of the packing materials. It was so imposed by the order of the assessing authority despite the objection by the assessee that the turnover of the packing materials ought not to be taxed under section 5A of the Kerala General Sales Tax Act. Two reasons were urged by the assessee. The first was that under section 5(6) of the Kerala General Sales Tax Act if the commodity sold is exempt the container sold must also be exempt. The second contention was that section 5A(1)(c) operates to render the purchases not taxable in case the goods so purchased are despatched to any place outside t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tax, when such sale or purchase happens to be in circumstances in which no tax is payable under section 5. In such a case in the hands of the purchaser tax is levied under section 5A. That again would be only if the goods would not come back into the stream of trade in the State. If it is sold again in the State then of course there is no question of tax being avoided. The three instances mentioned in clauses (a), (b) and (c) are instances where goods are disposed of in a manner otherwise than by a taxable sale in the State. Where goods are consumed in the manufacture of' other goods the commodity which was purchased for such manufacture could no longer be sold as such; in such a case section 5A is attracted. Where otherwise than by sale t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... materials is as a result of sale or purchase in the course of inter-State trade or commerce. 5.. When parties enter into an agreement for sale or purchase and that requires despatch either by rail or by road normally goods requires to be packed and the nature of the packing will depend upon the commodity dealt with. In such cases parties normally contemplate the supply of the goods in the form in which they ought to move properly packed. There is no case for the department that the parties to the contract for sale of eggs contemplated sending the eggs without packing. In fact it is submitted by the Government Pleader himself that the bills show packing charges also. That indicates the intention of the parties that the goods should be desp ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e is levied in respect of packing materials. Unless there is a case that there is a specific contract it would normally be presumed that the property in the packing materials passes with the goods and the parties contemplate passing of such property under the terms of the agreement for sale. 7.. In the circumstances of the case we have no difficulty in holding that section 5A(1)(c) applies and consequently there is no liability to pay tax on the packing materials used for despatch of eggs in inter-State trade or commerce. 8.. We may notice that the party himself conceded that he is liable to pay tax on coir not because that stands differently from other goods used as packing materials but because he is liable to tax on coir not under se ..... X X X X Extracts X X X X X X X X Extracts X X X X
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