Sale for sales tax purposes includes transfer of separately priced packing material with goods, and profit motive is irrelevant.

Supply of gunny bags containing wheat atta to depot-holders was treated as a sale because property in the bags passed for consideration under the contractual arrangement, and the absence of profit motive did not alter that character. The price recovered for gunny bags used as packing material was also includible in taxable turnover because the bags were separately priced and transferred as identifiable goods. Ex parte rejection of a revision petition under section 21(3) was not an adverse order, since notice was required only where the authority proposed to make an order prejudicial to rights. The reference was answered for the revenue on the substantive tax issues, and the revisional challenge failed.

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Issues: (i) Whether supply of gunny bags containing wheat atta to depot-holders under Government instructions constituted a sale under the East Punjab General Sales Tax Act, 1948; (ii) whether the price of gunny bags used as packing material for non-taxable commodities was includible in the taxable turnover; and (iii) whether ex parte rejection of a revision petition under section 21(3) of the East Punjab General Sales Tax Act, 1948, was an adverse order.

Issue (i): Whether supply of gunny bags containing wheat atta to depot-holders under Government instructions constituted a sale under the East Punjab General Sales Tax Act, 1948.

Analysis: A sale under the Act required transfer of property in goods for consideration. The contractual arrangement showed that the petitioners first purchased the bags from Government and thereafter transferred them to depot-holders at the fixed price. The motive of making profit, or the absence of it, was immaterial once the elements of transfer and price were present.

Conclusion: The transaction was a sale under the Act, against the assessee.

Issue (ii): Whether the price of gunny bags used as packing material for non-taxable commodities was includible in the taxable turnover.

Analysis: The bags were separately priced, remained identifiable property, and passed to depot-holders along with the goods. The turnover therefore included the price recovered for the bags as a distinct item of sale, and tax could validly be levied on that component.

Conclusion: The price of gunny bags was includible in the taxable turnover, against the assessee.

Issue (iii): Whether ex parte rejection of a revision petition under section 21(3) of the East Punjab General Sales Tax Act, 1948, was an adverse order.

Analysis: The statutory requirement of hearing arose only when the Financial Commissioner proposed to make an order adversely affecting rights. A refusal to exercise discretionary revisional jurisdiction without notice did not itself amount to an adverse order.

Conclusion: The ex parte rejection was not an adverse order, against the assessee.

Final Conclusion: The reference was answered in favour of the revenue on the substantive tax issues, and the challenge to the ex parte revisional rejection also failed.

Ratio Decidendi: Where a contract contemplates transfer of goods for a fixed price, the transaction is a sale for sales tax purposes if property passes for consideration, and packing material separately sold as part of the transaction forms part of the taxable turnover.

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