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TMI Blog1992 (2) TMI 333X X X X Extracts X X X X X X X X Extracts X X X X ..... pellant was sold, contending that the sale price was inclusive of the cost of the containers. The assessing authority did not dispute the purchase of the said bags by the appellant within the State and the payment of tax thereon by the first sellers who sold them to the appellant but denied the exemption because "nowhere in the sale bills they (the appellant) indicated that the sale price of B.H.C. 10 per cent was inclusive of the value of the containers", and went on to observe that "even if it were taken into consideration that there was implied contract between them and the purchasers, the value of gunny bags is insignificant when compared to the value of B.H.C. 10 per cent". Consequently, the appellant was assessed to tax on a net turnover of Rs. 22,06,147.62 which includes the disputed turnover of Rs. 1,81,177.87 The appellant preferred an appeal before the Assistant Commissioner (C.T.), Appeals, Guntur, who by his order dated January 29, 1981, allowed the appeal with the following short discussion: "Naturally sale value of insecticides is inclusive of containers purchased from other registered dealers in the State. As per the ratio fixed by the Tribunal in T.A. Nos. 270 and ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... jute gunny. It is also stated that the H.P.A. container in which the B.H.C. 10 per cent dust was sold will retain its physical or commercial identity after the removal of the said insecticide and that it will have a longer life than an ordinary gunny bag and that there will be no wastage or dust pollution either in transit or in loading and unloading and that customers prefer H.P.A. containers in view of their long life and multi-purpose uses. The appellant states that even though the sale price of B.H.C. 10 per cent dust was inclusive of the value of the containers the cost of the container was not insignificant when compared with the cost of B.H.C. 10 per cent dust and that the customer was conscious of the transaction that the containers were of substantial value. On this basis, the appellant contends that there was an implied contract for the sale and purchase of the containers. The appellant further states that in its reply to the notice issued by the Commissioner proposing to revise the order of the Assistant Commissioner (C.T.), Appeals, all these facts were stated and the correspondence with various dealers which go to show that there was contract for sale of containers wa ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... given case. The appellant has all the time been asserting that the H.P.A. containers used by him did not lose their identity and that they were reusable and were costlier than the ordinary gunnies and that their cost was 10 per cent of the cost of insecticides, and that the mere fact that their rate was not separately shown or that they were not separately billed did not militate against the factum of implied agreement for their sale. These facts asserted by the appellant before the Commissioner were not rejected by the Commissioner in his order dated January 26, 1985 nor were their correctness doubted or disputed. The learned Government Pleader relied on a decision of this Court in Chittoor Co-operative Sugars Limited v. State of Andhra Pradesh [1983] 53 STC 249 wherein it was held, relying on the decision of the Supreme Court in Hyderabad Deccan Cigarette Factory v. Slate of Andhra Pradesh [1966] 17 STC 624, that the "gunny bag" was the most convenient and cheap vehicle of delivery and transport, and having regard to the value of the gunny bag as compared to the value of its contents (sugar), it cannot be said that there was an implied contract to sell the gunny bags. The learn ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ...............In every case, the assessing authority is obliged to ascertain the true nature and character of the transaction upon a consideration of all the facts and circumstances pertaining to the transaction. That the problem almost always requires factual investigation into the nature and ingredients of the transaction has been repeatedly emphasised by this Court. .............. It is, therefore, perfectly plain that the issue as to whether the packing material has been sold or merely transferred without consideration depends on the contract between the parties. The fact that the packing is of insignificant value in relation to the value of the contents may imply that there was no intention to sell the packing, but where any packing material is of significant value it may imply an intention to sell the packing material. In a case where the packing material is an independent commodity and the packing material as well as the contents are sold independently, the packing material is liable to tax on its own footing. Whether a transaction for sale of packing material is an independent transaction will depend upon several factors, some of them being: 1.. The packing material i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... elating to gunnies in which cement was packed, is being disputed. The petitioner's case is that, though there is a sale of gunnies, the same constitutes a separate transaction and, therefore, ought to be taxed at the rate applicable to gunnies and not at the rate applicable to cement. Having regard to the decision of the Supreme Court in Raj Sheel v. State of Andhra Pradesh [1989] 74 STC 379, this has become a factual question, and the matter has to be decided without taking into account section 6-C of the Andhra Pradesh General Sales Tax Act. The assessment year herein is one earlier to introduction of section 6-C. Accordingly, the T.R.C., is allowed, the order of the Tribunal in so far as it relates to the turnover relating to gunnies is concerned, is set aside, and the matter is remitted to the Tribunal to re-examine the said aspect in the light of the decision of the Supreme Court, and pass appropriate orders." In the circumstances, we are of the view that the order of the Commissioner dated January 26, 1985 in his proceedings CCT's Ref. L. III(1)/1916/84 will have to be set aside and is accordingly set aside, with a direction that he should consider the matter afresh taking i ..... X X X X Extracts X X X X X X X X Extracts X X X X
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