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TMI Blog2005 (11) TMI 450X X X X Extracts X X X X X X X X Extracts X X X X ..... the strength of certificate of registration under that Act and which were used as packing material for packing of snuff manufactured and sold by the respondent and which was a tax-free item? (2) Whether, on the facts and circumstances of the case, the Tribunal was justified in holding that there was sale of the goods in question, viz., containers and bardana, etc.?" This reference pertains to the year 1972-73. The assessee-M/s. Khetu Ram Bishambar Dass was in the business of manufacture and sale of "snuff" which was a tax-free item (being a tobacco product) by virtue of entry No. 46 of Schedule II of the Bengal Finance (Sales Tax) Act, 1941, as extended to Delhi (hereinafter referred to as "the said Act"). The as ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t they were not resold but used as packing material for sale of snuff, therefore, the value of these materials which were indicated for resale, having not being so utilised, in view of the provisions of the second proviso to section 5(2)(a)(ii) of the said Act, were liable to be added to the taxable turnover of the assessee. Accordingly, the Sales Tax Officer added the purchases of packing material amounting to Rs. 6,25,619.59 to the taxable turnover of the assessee and a tax demand of Rs. 31,149 was therefore, raised. This view was upheld in an appeal by the Additional Commissioner. Being aggrieved of these two decisions, the assessee preferred an appeal before the Tribunal which held that the same could not be so added and that the secon ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... signed by the registered dealer to whom the goods are sold and containing the prescribed particulars on a prescribed form obtainable from the prescribed authority is furnished in the prescribed manner by the dealer who sells the goods: Provided further that where any goods specified in the certificate of registration are purchased by a registered dealer as being intended for resale by him or for use by him as raw materials in the manufacture of goods for sale, but are utilised by him for any other purpose, the price of the goods so purchased shall be allowed to be deducted from the gross turnover of the selling dealer but shall be included in the taxable turnover of the purchasing dealer." It is pertinent to note that the Delhi Sal ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rtificate of registration of such dealer as being intended for resale by him in Delhi or for sale by him in the course of inter-State trade or commerce or in the course of export outside India in the manner specified in sub-item (2) or sub-item (3)(A), as the case may be; and (C) of containers or other materials, used for the packing of goods, of the class or classes specified in the certificate of registration of such dealer, other than goods specified in the Third Schedule, intended for sale or resale;" Section 5(2) of the said Act defines the "taxable turnover" as that part of the dealer's gross turnover during any period which remains after deducting, inter alia, sales to a registered dealer of containers or other m ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... were liable to be deducted from the gross turnover to arrive at the dealer's taxable turnover. Undoubtedly, under the new Act, the present assessee would not have been entitled to any deduction on containers and packing materials used in the sale of snuff. What is to be examined by us is whether the second proviso of section 5(2)(a)(ii) of the said Act would come into play and, therefore, the price of the packing material would be liable to be added to the taxable turnover of the assessee. Mr. Batra, the learned counsel who appeared for the Revenue submitted that the registration certificate issued under the said Act clearly indicated these materials under the column for resale. According to him, these items were, in point of fact, no ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... and were to be deducted from the gross turnover, then there should have been a column providing for the same under the local registration certificate. We are in agreement with the submission made by Mr. Chawla that these items have been entered under the head "for resale" in the local registration certificate not because they were meant for resale but because the appropriate authority did not provide for a column in the registration certificate. This, however, would not enable us to detract from the position that the assessee had claimed deduction on account of containers and other materials for packing of goods and the same ought to have been shown in the certificate as such. That being the case, these goods were not entered for ..... X X X X Extracts X X X X X X X X Extracts X X X X
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