Exempt goods and packing material: no separate sales tax on gunny bags without an independent sale or separate charge.

Where exempt salt was sold in gunny bags without any separate price for the bags, central sales tax was not leviable on the packing material for the relevant period because there was no independent sale transaction of the gunny bags. The proviso to section 5 of the Rajasthan Sales Tax Act, 1954, dealing with packing material charged separately, was held inapplicable on the facts found. On those findings, the tax demand on the gunny bags could not be sustained, and the reference treated as a revision failed.

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Issues: Whether central sales tax was leviable on gunny bags used as packing material for exempt salt when no separate price was charged for the bags.

Analysis: The assessment related to salt sold in gunny bags in the course of inter-State trade. Salt was exempt from sales tax, and the proviso to section 5 of the Rajasthan Sales Tax Act, 1954, which later dealt with tax on packing material when separately charged for, was held inapplicable to the relevant period. The Board had found as a fact that there was no separate sale transaction of the gunny bags and that no separate price had been charged for them. On those findings, and treating the sale of the packing material as not independent of the exempt sale of salt, separate tax on the gunny bags could not be sustained.

Conclusion: Central sales tax was not leviable on the gunny bags, and the reference treated as a revision failed.

Final Conclusion: The decision affirmed that where exempt goods are sold without a separate sale of the packing material, no separate tax can be imposed on the packing material for the relevant period.

Ratio Decidendi: In the absence of a separate sale of packing material and where the principal goods are exempt, the packing material does not attract separate sales tax for the relevant transaction.

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