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TMI Blog2008 (6) TMI 558X X X X Extracts X X X X X X X X Extracts X X X X ..... upplier of ready-made garments made of hosiery cloth and other materials to Pantaloon, a readymade garment dealer of high repute. While supplying, garments are tucked in hangers. The applicant purchases plastic hanger on payment of VAT at 12.5 per cent, the item being a residuary item falling under Schedule CA to the VAT Act. It has been claimed by the petitioner that since those plastic hangers are being used by him as packaging materials, these should be taxed at four per cent at the time of sales made by him. Alternatively, the contention of the respondent-authorities is that since nothing can be packed in a hanger, these cannot be treated as packing material for the purpose of levy of tax under the VAT Act. The question to be answered, therefore, is whether hangers can be considered as packing materials. Sri S. Chakrabarty, Advocate, appearing on behalf of the applicant, contended that concept of packing has drastically changed and it now includes any material used to keep the object intact and also to make it look attractive. It was claimed by the learned Advocate that in the showroom, the ready-made garments are tucked in hangers so that these garments could retain its ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ibunal that wooden pallet is used as a platform on which a number of cement bags are kept in a particular manner and then the whole thing is fitted with iron straps or hoops so as to make a bundle of it. This bundle in turn is wrapped in a big polythene sheet and the entire thing, namely, platform along with the cement bags wrapped in polythene sheet is lifted and put on board of a ship for its transhipment abroad. It is in this context that we will have to decide whether wooden pallet can be said to be 'wooden frame' in the sense of specified packing material. It is not in dispute that the word 'frame' means anything fitted together according to a design. It was faintly argued by the learned Assistant Government Pleader that the wooden pallets manufactured by the assessee cannot be regarded as wooden frames, as ordinarily understood. But this submission cannot be accepted as wooden pallets are prepared by putting together or by joining wooden planks in a definite manner so as to give them a desired shape or design. Only reason given by the learned Assistant Government Pleader for holding that the wooden planks sold by the assessee cannot be said to be wooden fra ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Admittedly, the wooden pallets manufactured and sold by the assessee are used for the purpose of packing cement bags so as to prepare a bundle of a certain number of cement bags which can be lifted as a bundle and put in a ship for transhipment for the purpose of their transport and sale. We are, therefore, of the view that the Tribunal was right in considering the wooden pallets as wooden frames falling within entry 12 of Schedule II, Part A to the Act. Relying on this decision, it was contended by the learned Advocate that at the hands of the applicants, the hangers purchased were being used as packing materials and it was further stressed that Pantaloon were also selling the ready-made garments duly packed with said plastic hangers by treating them as packaging materials. In support of his submission, learned Advocate also relied on decision of the honourable Supreme Court in the case of Trutuf Safety Glass Industries v. Commissioner of Sales Tax [2007] 8 VST 661; [2007] 50 STA 163. In that case, the honourable apex court held that (page 666 of STC) it is settled position in law that while interpreting the entry for the purpose of taxation recourse should not be made to the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... as packing material. The honourable Gujarat High Court while delivering the judgment in the case of State of Gujarat v. Kishor Timber [1991] 83 STC 370, as relied upon strongly by the learned Advocate for the petitioner, considered definition of packing as given in various dictionaries and observed (page 374) . . . when things are put together in a compact manner so as to facilitate their transport or sale, then it can be said that they have been packed. . . Therefore, materials which can be used for this purpose will have to be regarded as packing materials. In that case, certain categories of item were specified as packing materials as per entry 12 of Schedule II, Part A to the Gujarat Sales Tax Act, 1969 which included wooden frames . The honourable High Court was to decide whether wooden pallets fall within the category of wooden frames an item already specified as packing material. It was not considering whether wooden pallets as such would be packing materials. From the facts of the case, it further appears that those wooden pallets were capable of holding something a basic requirement for being treated as packing material and could also act as a protection against p ..... X X X X Extracts X X X X X X X X Extracts X X X X
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