Container turnover under sales tax law turns on implied agreement, resale value, and the parties' intention in the sale.

Assessment of container turnover under the Kerala General Sales Tax Act depends on whether there is an express or implied agreement to sell the packing materials along with the contents. The discussion explains that the value of containers cannot be ignored merely because it is not separately fixed, and that the parties' intention is decisive. Gunny bags and tea-chests are treated as commercial commodities with resale value, so their value may enter taxable turnover. F.A.C.T. manure bags are distinguished on the basis of lacking resale value.

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Issues: (i) Whether the turnover attributable to gunny bags and tea-chests used for packing foodgrains was assessable to sales tax on the footing that the containers were sold along with the contents; (ii) Whether the turnover attributable to F.A.C.T. manure bags was similarly assessable.

Issue (i): Whether the turnover attributable to gunny bags and tea-chests used for packing foodgrains was assessable to sales tax on the footing that the containers were sold along with the contents.

Analysis: The relevant test was whether there was an express or implied agreement to sell the containers. The Court noted that the question depends on the facts and circumstances, and that where packing materials are of substantial value and remain separate commercial commodities with resale value, an implied agreement to sell them may legitimately be inferred even if no separate price is shown in the bill. Gunny bags and tea-chests were found to retain their physical and commercial identity and not to be mere wrapping materials.

Conclusion: The assessment on the turnover of gunny bags and tea-chests was upheld and was against the assessee.

Issue (ii): Whether the turnover attributable to F.A.C.T. manure bags was similarly assessable to sales tax.

Analysis: The Court accepted the Tribunal's finding that the manure bags had been spoiled by the corrosive action of their contents and had no substantial resale value. In such circumstances, no inference of an implied agreement to sell the bags could be drawn, and the bags could not be treated on the same footing as valuable containers capable of separate commercial sale.

Conclusion: The assessment on the turnover of F.A.C.T. manure bags was not sustainable and was in favour of the assessee.

Final Conclusion: The revisions failed in respect of gunny bags and tea-chests, but the assessment relating to F.A.C.T. manure bags was deleted; the revisions were nevertheless dismissed overall.

Ratio Decidendi: Packing materials are taxable only where the facts justify an express or implied agreement to sell them, and such an inference is readily drawn when the containers are separately identifiable commercial commodities of substantial resale value; no such inference arises where the containers have lost substantial commercial value.

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