Packing material sold separately and charged separately is taxed at its own rate, not the rate for the packed goods.

Where packing material is sold separately from the packed goods and separately charged in the bill, the tax rate applicable to the packing material governs that sale. Applying that principle, empty tins sold with hydrogenated vegetable oil or ghee were treated as packing material because there was an implied agreement to sell the tins with the contents and they were separately invoiced. The tins were therefore taxable at the packing-material rate, not at the higher rate applicable to goods not otherwise provided for, and the Board of Revenue's view was rejected.

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Issues: Whether empty tins sold along with hydrogenated vegetable oil or ghee, but charged separately in the bills, were taxable at the rate applicable to packing material or at the higher rate applicable to goods not otherwise provided for.

Analysis: The question was already answered in an earlier decision between the same parties. It was held that where packing material is sold separately from the goods packed and charged separately, the rate applicable to the packing material governs the sale of that packing material. On the facts, there was an implied agreement to sell the empty tins along with the contents, and the tins were separately charged in the bills. The applicable notification therefore required the tins to be assessed at the rate applicable to packing material and not at the higher rate applicable to the contents.

Conclusion: The tins were liable to sales tax at 3 per cent as packing material and not at 7 per cent; the finding of the Board of Revenue was incorrect and the revision succeeded.

Ratio Decidendi: Where packing material is sold separately from the packed goods and separately charged, it is taxable at the rate applicable to the packing material itself, and not at the rate applicable to the goods contained therein.

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