Meaning of "disposed of" under sales tax law excludes mere use of packing and transport materials.

Use of baskets, ice and other consumable stores as packing and transport materials did not amount to disposal otherwise than by way of sale. The expression "disposed of" in section 5A(1)(b) requires a transfer, relinquishment, abandonment or other disposition that ends title or possession, or destroys the goods wholly or partly. Where the goods are merely used in stocking and transporting prawns and remain under the dealer's control, without sale or transfer of ownership, the charging provision is not attracted.

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Issues: Whether the use of baskets, ice, and other consumable stores purchased from unregistered dealers for stocking and transporting prawns amounted to disposal of such goods otherwise than by way of sale in the State under section 5A(1)(b) of the Kerala General Sales Tax Act.

Analysis: The expression "disposed of" in section 5A(1)(b) requires more than mere user of the goods. It connotes a transfer, relinquishment, abandonment, or forsaking of title or possession, or some disposition that destroys the goods in whole or in part. Where the articles are only used as packing or transport materials and title and possession remain with the dealer, there is no disposal within the meaning of the provision. The absence of sale or transfer of ownership, coupled with continued control over the goods, takes the transaction outside the charging provision.

Conclusion: Mere use of the consumable stores for packing and transport did not amount to disposal otherwise than by way of sale in the State. The revision by the Revenue failed and the assessee succeeded.

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