Composite sale of packed goods excludes deemed disposal treatment where containers are sold with the contents

Section 7-A(b) of the Tamil Nadu General Sales Tax Act, 1959 did not apply to tins sold as containers with oil, because the tins were sold in the State as part of a composite sale of tinned oil. The price charged included the value of the tins, so the transaction was treated as a sale rather than a disposal otherwise than by way of sale. On those facts, the statutory condition for invoking section 7-A(b) was not satisfied, and the assessment against the dealer was upheld.

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Issues: Whether section 7-A(b) of the Tamil Nadu General Sales Tax Act, 1959 applied to the sale of tins used as containers for oil sold by the dealer.

Analysis: The dealer purchased empty tins and used them as containers for oil. While selling the tinned oil, the dealer also sold the tins, and the price charged included the price of the tins. Section 7-A(b) applies where goods are disposed of otherwise than by way of sale in the State. On these facts, the tins were sold in the State as part of the tinned oil, and the statutory condition for invoking section 7-A(b) was not satisfied.

Conclusion: Section 7-A(b) was not attracted, and the decision against the dealer was upheld.

Final Conclusion: The tax case failed, and the impugned assessment position stood undisturbed.

Ratio Decidendi: Where containers are sold in the State as part of the composite sale of the packed goods, the transaction is a sale and not a disposal otherwise than by way of sale for the purposes of section 7-A(b).

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