Container deposits for liquor supply treated as bailment, not sale, where bottles and casks remained returnable security.

Unrefunded deposits taken for liquor and beer containers were analysed as security for return of the containers, not as price for a sale. For wooden casks, the purchaser could return the casks and, if retained beyond the permitted period, was liable only to pay hire, which was inconsistent with a conditional sale and showed the casks remained the supplier's property. The country liquor bottle arrangement similarly allowed refund on return of bottles in sound condition, and the beer bottle arrangement was treated on the same factual basis. The deposits therefore represented security against loss of containers, and the unrefunded amounts could not be treated as turnover from sale; the transactions were bailments, not sales.

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Issues: Whether unrefunded deposits taken for bottles and wooden casks used to supply liquor and beer represented turnover from a sale of the containers, or whether the transaction was one of bailment.

Analysis: The arrangement for wooden casks showed that property in the casks was not intended to pass to the purchaser, since the purchaser was entitled to return them and, if retained beyond the stipulated period, was liable only to pay hire. The absence of a fixed time-limit for return and the continuing liability to hire were inconsistent with a conditional sale and indicated that the casks remained the assessee's property. The country liquor bottle arrangement under the excise rules was similar: the purchaser paid the cost of the bottles separately, was entitled to refund on returning them in sound condition, and the rules did not indicate any sale of the containers. The beer bottle arrangement was found on the facts to be substantially the same. The deposits were taken as security against loss of containers, not as price, and the containers were meant to be returned after use.

Conclusion: The unrefunded amounts could not be treated as turnover from sale of the containers; the transactions were bailments and not sales.

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