Sales tax exemption for packing materials is not implied where only the packed goods are expressly exempt.

Exemption from sales tax was held to be strictly confined to the expressly exempted article, so exemption for salt did not extend by implication to gunny bags used for packing it. The gunny bags were separately bought and sold, and no specific exemption covered them, so turnover in those bags remained taxable and the refund claim failed. The assessee was also treated as a dealer in gunny bags because it carried on business in those goods within the meaning of the sales tax law; absence of profit on the bags did not affect liability, and the agency plea failed for want of evidence.

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Issues: Whether the price of gunny bags used to pack exempt salt was also exempt from sales tax and refundable to the assessee; whether the assessee could avoid tax on the footing that it was not a dealer in gunny bags or that it acted merely as an agent for customers; and whether the absence of profit or the possibility of double taxation altered liability.

Analysis: The Court held that exemption from sales tax must be strictly construed and confined to the article expressly exempted. Salt being exempt did not carry with it an implied exemption for gunny bags in which it was packed, particularly where the bags were separately bought and sold and were not shown to have been covered by any specific exemption. The Court further held that the assessee carried on business in gunny bags as well as in salt, so it was a dealer in goods within the meaning of Section 2(b) of the General Sales Tax Act. The absence of profit on the gunny bags was held irrelevant to tax liability on turnover, and the plea of agency for customers failed for want of evidence.

Conclusion: The claim for refund failed and the assessee remained liable to sales tax on the gunny bags; the appeal was dismissed.

Ratio Decidendi: An exemption from sales tax cannot be extended by implication to packing materials unless they are expressly exempted, and dealer liability is determined by carrying on business in the goods and turnover, not by profit or alleged equity against double taxation.

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