Packing charges separately shown in cement sales bills were held deductible from assessable turnover under the applicable turnover rules.

Packing charges separately shown in sale bills for cement sold under a controlled distribution system were treated as deductible from assessable turnover. The rule allowed deduction for packing-related charges, and the decisive factor was that cement was saleable in unpacked form, with packing undertaken only for delivery after sale. Because the packing cost was separately charged, it was attributable to post-sale service rather than the sale price of the commodity. The fact that gunny bags were sourced from outside the State did not, by itself, make their value part of the turnover.

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Issues: Whether the cost of packing materials and related labour charges, when separately shown in the sale bills of cement sold under a controlled distribution system, were includible in the assessable turnover.

Analysis: The relevant rule provided for deduction of amounts falling under the head charges for packing, including the cost of packing materials and labour, from the taxable turnover. The decisive consideration was that cement was saleable in naked form, and where packing was undertaken for delivery to the allottee after sale and the charges were separately shown, the expenditure was attributable to post-sale service rather than to the price of the commodity itself. The fact that gunny bags were obtained from outside the State did not, by itself, justify a presumption that they were purchased for resale or that their value formed part of the sale price. The reasoning followed the earlier view that separately charged packing expenses in cement transactions were excludible from turnover.

Conclusion: The packing charges were not includible in the assessable turnover, and the petitioners were entitled to relief.

Ratio Decidendi: Where packing of a commodity saleable in unpacked form is undertaken for delivery after sale and the packing cost is separately charged, such amounts are deductible from assessable turnover and cannot be treated as part of the sale price.

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