Separate agreement determines tax treatment of bottles and packing material sold with liquor, requiring fresh factual examination.

Taxability of bottles and packing material sold with liquor depended on whether there was a separate express or implied agreement for their sale. For assessment years before section 6-C of the Andhra Pradesh General Sales Tax Act, 1957, the controlling issue was factual: if no distinct agreement existed, the bottles and packing material formed part of the liquor turnover and were taxable at the rate applicable to the contents; if a separate agreement existed, they could be taxed separately at the rate applicable to those goods. The Tribunal had not examined that factual question, so its orders were set aside and the matters were remitted for fresh disposal.

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Issues: Whether the turnover relating to bottles and packing material sold along with liquor was liable to be taxed separately at the rate applicable to bottles and packing material, or whether it formed part of the turnover of the liquor and was taxable at the rate applicable to the contents, depending on the existence of a separate agreement, express or implied, for their sale.

Analysis: The assessment years in question were prior to the introduction of section 6-C of the Andhra Pradesh General Sales Tax Act, 1957. The Tribunal had disposed of the matters by following an earlier decision, without examining the factual question whether there was a separate agreement for the sale of bottles and packing material. The controlling question was held to be one of fact, namely whether the bottles and packing material were sold under a distinct agreement or were merely incidental to the sale of liquor. If no separate agreement existed, the turnover relatable to bottles and packing material would assume the character of the liquor turnover and be taxed accordingly. If a separate agreement existed, the orders of the lower authorities could stand.

Conclusion: The revision cases were allowed, the Tribunal's orders were set aside, and the matters were remitted to the Tribunal for fresh disposal after verifying the existence or absence of a separate agreement for the sale of bottles and packing material.

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