Packing materials eligible for tax-free purchase cannot be excluded from registration without a reasoned hearing and lawful reconsideration.

Packing materials and containers used for goods manufactured for sale fall within the statutory category eligible for tax-free purchase, and a registration certificate cannot be read narrowly to deny that benefit. The statutory language treats packing materials as an independent category, so exclusion of such goods merely because they are not directly consumed in manufacture is inconsistent with the scheme. Any deletion of packing materials from the certificate must rest on a reasoned quasi-judicial determination after an effective hearing; a mechanical, unreasoned deletion made without fair opportunity is unsustainable. The notice and deletion order were quashed and the matter was remitted for reconsideration in accordance with law.

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Issues: (i) Whether packing materials and containers used for goods manufactured for sale could be treated as goods covered by the registration certificate for tax-free purchase under section 5(2)(a)(ii) of the Act. (ii) Whether the deletion of packing materials from the registration certificate was sustainable when made without a proper hearing and without recording reasons.

Issue (i): Whether packing materials and containers used for goods manufactured for sale could be treated as goods covered by the registration certificate for tax-free purchase under section 5(2)(a)(ii) of the Act.

Analysis: The statutory scheme treated goods purchased for resale, raw materials used in manufacture, and containers or other materials for packing as distinct categories. The expression relating to containers and packing materials was not confined to resale goods alone; it also applied to goods manufactured for sale. A registration certificate had to be read consistently with the section and not in a manner that curtailed the statutory benefit. Packing materials formed an independent category and could not be excluded merely because they were not directly consumed in manufacture.

Conclusion: The packing materials and containers used for the petitioner's manufactured goods were covered by the statutory benefit and could not be deleted on the footing that they were outside section 5(2)(a)(ii).

Issue (ii): Whether the deletion of packing materials from the registration certificate was sustainable when made without a proper hearing and without recording reasons.

Analysis: The impugned show cause notice and deletion order were on cyclostyled forms, the materials produced contradicted the claim that any real opportunity had been given, and no reasoned finding supported the deletion. A quasi-judicial determination affecting statutory rights could not be made mechanically or in purported obedience to a policy instruction without affording an effective opportunity to the dealer and recording a proper decision on the merits.

Conclusion: The deletion was unsustainable for breach of fair procedure and absence of a proper finding.

Final Conclusion: The notice and the deletion order were quashed, and the matter was directed to be reconsidered afresh in accordance with law after giving the petitioner an effective opportunity of hearing.

Ratio Decidendi: Where the statute expressly extends tax-free purchase to containers and other packing materials for goods intended for sale, that benefit cannot be denied by reading the registration certificate narrowly or inconsistently with the statutory language, and any deletion affecting that entitlement must be supported by a reasoned quasi-judicial decision after fair hearing.

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