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TMI Blog2010 (2) TMI 1089X X X X Extracts X X X X X X X X Extracts X X X X ..... that:- In view of the provisions of section 8(2A) of the Act, 1956 and section 2(o) of the Act, 1958, we are of the opinion that the Board was justified in holding that the gunny bags sold along with exempted bidi is also exempted from the payment of Central sales tax under section 8(2A) of the Act, 1956 read with the Explanation annexed to the definition of "sale price" under section 2(o) of the Act, 1958. We answer the questions of law referred to us by the board in affirmative, i.e., in favour of the assessee and against the Revenue, Commercial Tax Department. - 2 of 2003 - - - Dated:- 5-2-2010 - DHIRENDRA MISHRA AND CHANDRAKAR R.N. , JJ. ORDER:- The order of the court was made by DHIRENDRA MISHRA J. The Board of Rev ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... hat in view of the Explanation to section 2(o) of the Act, 1958 since the bidi is a tax-free commodity, therefore, gunny bags is also tax-free. However, the instant reference has been made at the instance of the Revenue for our opinion on the questions of law referred above. Mr. Deo, learned Government Advocate, submitted that definition of sale price given in section 2(o) of the Act, 1958 is to be considered in the light of section 2(g) of the Central Sales Tax Act, 1956 (for short, the Act, 1956 ) keeping in view the liability to tax for inter-State sale, as provided under sections 6(1A) and 8(2A) of the Act, 1956. Section 6(1A) of the Act, 1956 clearly stipulates that the dealer shall be liable to pay tax in the course of inter-Sta ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... visions of section 6(1A), the tax payable under this Act by a dealer with respect to his turnover, which relates to the sale of any goods, is exempt from tax, generally or subject to tax generally at a rate which is lower than four per cent under the sales tax law of that State, shall be nil or calculated at the lower rate. Bidi was exempted from the payment of sales tax during the period under consideration. In view of the Explanation to section 2(o) of the Act, 1958, packing material, i.e., gunny bags, becomes part of the goods sold, i.e., bidi and thus tax-free. Therefore, in view of section 8(2A), no sales tax was leviable for the turnover of inter-State trade of packing material, gunny bags, with the goods bidi. We have heard lea ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... goods: Section 6(1A) of the Act, 1956 Liability to tax on inter-State sales: 6(1) . . . (1A) A dealer shall be liable to pay tax under this Act on a sale of any goods effected by him in the course of inter-State trade or commerce notwithstanding that no tax would have been leviable (whether on the seller or the purchaser) under the sales tax law of the appropriate State if that sale had taken place inside that State. Section 8(2A) of the Act, 1956 8.. Rate of tax on sales in the course of inter-State trade or commerce. (1) to (2) . . . (2A) Notwithstanding anything contained in sub-section (1A) of section 6 or sub-section (1) (or clause (b) of sub-section (2) of this section, the tax payable under this Act by a dealer on ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e tax will be leviable on such deemed sale of packing material at the rate of tax applicable to the sale of the goods themselves. Section 6(1A) of the Act, 1956 provides that in the event of inter-State trade or commerce of any goods by the dealer, he is liable to pay tax under the Act, 1956 notwithstanding that no tax would have been leviable if that sale had taken place inside that State under the sales tax law of that State. However, section 8(2A) of the Act, 1956 clearly provides that notwithstanding anything contained in section 6(1A) or sub-section (1) or clause (b) of subsection (2) of that section, tax payable under this Act shall be nil or as the case may be, shall be calculated at the lower rate where the turnover relates to ..... X X X X Extracts X X X X X X X X Extracts X X X X
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