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TMI Blog1984 (11) TMI 308X X X X Extracts X X X X X X X X Extracts X X X X ..... uthority assessed the value of containers at 4% where the sale was covered by valid C forms, and at 10% where it was not supported by valid C forms. On appeal by the assessee, the Deputy Commissioner (Appeals) held that since the value of the contents, that is, coconut oil and oilcake, sold inter-State, was taxed only at 1%, the value of the respective containers was also taxable at 1% only. The Revenue and the assessee appear to have agreed before the Deputy Commissioner (Appeals) that there had been a transfer of containers along with the contents. The only point in issue was, whether the value of the containers (tins and gunnies) was to be taxed at 1% as in the case of the contents (coconut oil and oilcake), as held by the Deputy Commiss ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the containers or there was separate itemising in the bill made out for the goods, what its value in proportion to the goods is, etc. None of these factors by itself would be decisive of the question, though each one of them might be helpful to understand the nature of the transaction. 4.. Section 5A of the Act reads as follows: "5A. Levy of purchase tax.-(1) Every dealer who in the course of his business purchases from a registered dealer or from any other person any goods, the sale or purchase of which is liable to tax under this Act, in circumstances in which no tax is payable under section 5, and either- * * * * (c) despatches them to any place outside the State except as a direct result of sale or purchase in the course of inter- ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... only at the rate at which the contents were charged; not that the value of the containers should not be subjected to tax. Almost the same is the view taken by the Madhya Pradesh High Court in the decision reported in Govindram Ramprasad of Indore v. Assessing Authority [1957] 8 STC 407 wherein the question was whether the tins in which kerosene was sold would be exempt from sales tax when kerosene was an exempted commodity under the Madhya Bharat Sales Tax Act, 1950. The view taken was that unless there was specific exemption of the container from sales tax along with the commodity it contained, tax on the container could not be avoided. 7.. In Srinivasa Pai v. Sales Tax Appellate Tribunal, Trivandrum [1961] 12 STC 80, a Division Bench of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s in inter-State commerce was liable to be taxed only at the rate at which contents were to be charged. Speaking for the Bench, Subramonian Poti, (Ag.) C.J., in paragraph 5 of the judgment stated as follows: "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 t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... had not considered the question whether there was sale of the container in all its facets; on the other hand, the Tribunal was found to have proceeded on an alleged admission made by the Revenue that the value of the containers was substantial-an admission which was disowned by the Government Pleader, and which, the Court was inclined to think as inconceivable in the circumstances. What the Full Bench highlighted, as far as we could see, is the principle laid down by the Supreme Court in Hyderabad Deccan Cigarette Factory v. State of Andhra Pradesh [1966] 17 STC 624 (SC) which reads as follows: "Whether there was an agreement to sell the packing materials is a pure question of fact and that question cannot be decided on fictions or surmise ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ithout tins and gunnies. The seller used the tins and gunnies only as a vehicle of convenient transport of goods purchased. Thus, the transfer of the property in the packing material was an unavoidable concomitant of the sale of oil and oilcake and its transfer was without any intention even impliedly to sell tins and gunnies separately. What emerges from this discussion, therefore, is that, on the facts found, in the present case, the value of the containers could not have been subjected to sales tax at a rate higher than that was applicable to the value of the contents thereof. 12.. The result, therefore, is that we uphold the view taken by the Tribunal that on the facts and in the circumstances of the case, the value of tins and gunnies ..... X X X X Extracts X X X X X X X X Extracts X X X X
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