Packing material classification turns on use, not form, for polythene sheets sold for packing goods.

Polythene sheets or film sold for conversion into covers and for packing goods were treated as "packing material" under Entry 102 of the Kerala General Sales Tax Act, 1963. The court noted that the entry is of ordinary and inclusive import, and that classification depends on the function and use of the article in packing, not merely its form at the time of sale. Because the sheets were used for packing milk and other goods, they fell within the entry and attracted tax at the concessional rate of 4%. The reassessment applying a higher rate was therefore unsustainable.

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Issues: Whether polythene sheets or film sold for conversion into covers for packing goods fall within the expression "packing material" under Entry 102 of the First Schedule to the Kerala General Sales Tax Act, 1963, so as to attract tax at 4%.

Analysis: Entry 102 covers packing cases and packing materials, and the words used in the entry are of ordinary and inclusive import. The authority to notify additional materials enlarges the scope of the entry and is meant to bring within the concessional rate items not otherwise falling within the ordinary meaning of packing cases or packing materials. Where a product by its nature is used for packing goods, no separate notification is necessary. Polythene sheets supplied for making covers and packing milk and other goods are used as packing material and not merely as raw material outside the entry. The classification depends on the function and use of the article in packing, not on the form in which it is sold.

Conclusion: Polythene sheets used for packing were rightly treated as packing material under Entry 102 and taxable at 4%, and the reassessment at the higher rate was unsustainable.

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