1980 (2) TMI 246

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..... as follows The assessee is a dealer in cotton bales and has been assessed to sales tax under the Central Sales Tax Act for the year 1966-67. During this period, the assessee sold 1,842 bales of cotton for Rs. 4,94,914. The assessee contended that the sale was in respect of cotton only and that no price was charged in respect of packing materials consisting of bardana and patti. It was also contended by the assessee that the price of cotton charged was for net weight of cotton. The assessee also produced certificates from the purchasers to prove its contention that it had sold cotton alone and that no payment was made for packing material. The assessing authority rejected the contention of the assessee and held that there was an implied sale .....

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..... r Sons Co. v. State of Madras[1960] 11 S.T.C. 321., the Madras High Court held that where there is an agreement to purchase cotton to be delivered by the seller to the buyer, it is implicit in the contract that the goods should be delivered as packed; and that in such a case a contract to pay for and purchase the packing materials can be implied and the turnover relating to the packing materials would be liable to sales tax. This decision of the Madras High Court was approved by the Supreme Court in Government of Andhra Pradesh v. Guntur Tobaccos Ltd.[1965] 16 S.T.C. 240 at 250 (S.C.). While noting the decision of the Madras High Court, the Supreme Court observed (at page 250): 'The sale price of packing material employed for effecting .....

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..... the conclusion that there was an implied sale of packing materials. The Full Bench decision of this Court in Nimar Cotton Press v. Sales Tax Officer[1961] 12 S.T.C. 313 (F.B.)., referred to by the Board, is distinguishable on facts because in that case there was a contract for pressing cotton and delivery of compressed cotton in bales covered with hessian cloth and fastened with iron hoops for a consolidated charge of pressing and packing. It was in these circumstances that it was held in that case that there was an implied sale of packing material. In the instant case, it has not been found that separate price was charged for the packing material or that a composite price for cotton and packing materials was charged by the assessee. The c .....

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