Implied sale of packing material for tax requires proof that buyer and seller intended the packaging to form part of the bargain.

Sales tax on packing material arises only where the facts show a consensual sale of the packing itself as part of the bargain. On these facts, the fertiliser bags were of insignificant value, were necessary to protect the contents, had no practical use after delivery, and functioned only as a cheap transport container. Because the bags were not intended to be bought and sold separately or as part of the sale price of the fertiliser, no implied sale of the packing material could be inferred. The packing material was therefore not taxable along with the fertiliser.

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Issues: Whether there was an implied sale of the packing material used for packing fertiliser, so as to attract sales tax.

Analysis: Sales tax on packing material can arise only if the seller intended to sell, and the buyer intended to buy, the packing material as part of the bargain. The question depends on the facts and circumstances of each case. Here, the bags were of insignificant value compared with the fertiliser, were necessary to protect the contents, had no practical utility after use, and served only as a cheap and convenient vehicle for transporting the fertiliser. On those facts, the material did not form part of the bargain for sale.

Conclusion: There was no implied sale of the packing material, and the answer to the referred question was in favour of the assessee.

Final Conclusion: The reference was answered by holding that the packing material was not sold along with the fertiliser for purposes of tax liability.

Ratio Decidendi: Liability to sales tax on packing material depends on proof of a consensual sale of that material, and where the packing serves only as a non-valuable, unusable transport container, no implied sale can be inferred.

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