Deeming fiction for packing materials cannot create a separate sale for set-off unless independently proved.

A statutory deeming fiction for sales with packing materials is confined to the purpose for which it was enacted and cannot be extended to treat packing materials as separately sold for set-off under rule 43 unless that separate sale is independently established. Here, the sale of de-oiled cakes included bardans only incidentally, and there was no pleading or evidence of a distinct sale of the bardans. Section 15A treated the goods and packing as one integrated sale for assessment, while section 3(5)(c) did not enlarge that fiction. The claim to set-off therefore failed, and the referred question was answered in the negative, in favour of the revenue.

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Issues: Whether the deeming provision relating to goods sold in packing materials could be extended so as to treat the bardans as separately sold for the purpose of claiming set-off under rule 43.

Analysis: Section 15A was enacted to ensure that where goods are sold along with packing materials, only one rate of tax is applied and the goods and packing materials are treated as one integrated sale for assessment purposes. The legal fiction created by that provision is confined to that purpose and cannot be extended beyond its legitimate field to satisfy the requirement of rule 43, which contemplates tax-paid goods being sold. In the present case, the assessee sold de-oiled cakes, and the passing of property in the bardans was only incidental. There was no pleading or evidence of any separate sale of the bardans. The provision in section 3(5)(c) did not alter this position, as it concerned goods on which no tax was leviable under section 15A and did not support a wider operation of the deeming fiction.

Conclusion: The bardans could not be treated as separately sold for the purpose of rule 43, and the claim to set-off failed. The answer to the referred question was in the negative, in favour of the revenue.

Ratio Decidendi: A statutory deeming fiction is confined to the purpose for which it is created and cannot be extended to create a separate sale of packing materials for set-off unless such separate sale is independently established.

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