Separate sale of packing material attracts packing-rate tax, not the higher rate on the goods contained in it.

Empty tins used to pack vegetable oil were treated as a separate commodity because they were separately charged in the bills and the assessee carried on a distinct business of selling tins. Applying the rule that packing material sold separately, expressly or by implied agreement, is taxable at the rate applicable to packing material, the tins attracted the concessional rate for packing material rather than the higher rate applicable to the oil contained in them. The freight issue was remitted for fresh determination.

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Issues: Whether empty tins used as packing material for vegetable oil were taxable at the concessional rate applicable to packing material or at the higher rate applicable to the goods contained therein.

Analysis: The relevant notification prescribed a 3 per cent rate for packing material, including empty tins, while the proviso to section 5(1) of the Rajasthan Sales Tax Act, 1954 applied the goods' rate only where packing material was not separately charged. On the facts, the tins were shown separately in the bills and the assessee was also registered for the separate business of selling empty tins. Applying the principle that an implied agreement to sell packing material as a distinct commodity makes that sale taxable at the packing material rate, the tins could not be treated as part of the vegetable oil transaction for the higher rate.

Conclusion: The empty tins were liable to tax at 3 per cent under the notification and not at 7 per cent as part of the vegetable oil.

Final Conclusion: The assessee succeeded on the packing material issue, and the matter concerning freight was sent back for fresh determination.

Ratio Decidendi: Where packing material is separately charged and sold, expressly or by implied agreement, it is taxable as a separate commodity at the rate applicable to packing material, and not at the rate applicable to the goods packed in it.

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