Tax-paid packing material remains deductible from turnover when sold with packed goods under the sales tax framework.

Tax-paid packing material purchased from registered dealers and sold along with the packed goods was held deductible from turnover under section 2(r)(ii) of the M.P. General Sales Tax Act, 1958, read with the explanation to section 2(o). The Court followed earlier authority that a sale of packed goods includes a sale of the packing material itself, so the price, cost, or value of tax-paid packing material is allowable as a deduction when computing turnover. Applying that interpretation to the references before it, the Court answered the question in the negative and in favour of the assessee.

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Issues: Whether tax-paid packing material purchased from registered dealers and sold along with goods packed therein was deductible from turnover under section 2(r)(ii) of the M.P. General Sales Tax Act, 1958 in view of the explanation to section 2(o) of the Act.

Analysis: The packing material was purchased after payment of full tax and the goods were thereafter sold in that packing. Earlier decisions held that a sale of goods duly packed also amounts to a sale of the packing material, and that the price, cost, or value of such packing material is deductible if it is tax-paid. The Court found no reason to depart from that view and applied the same interpretation to the references before it.

Conclusion: The assessee was entitled to deduction from turnover under section 2(r)(ii) of the M.P. General Sales Tax Act, 1958. The question was answered in the negative and in favour of the assessee.

Ratio Decidendi: Tax-paid packing material sold along with the packed goods is treated as part of the sale for the purpose of deduction, and its value is deductible from turnover under the Act.

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