Composite sale price governs sealed tin oil sales; container value is not deductible as packing charges or taxed separately.

When oil is sold in sealed tins as a composite commercial unit, the tin forms part of the bargain of sale and its value is not deductible as packing charges under rule 6(cc)(i) of the Tamil Nadu General Sales Tax Rules, 1959. Separate billing for oil and tin does not change the real nature of the transaction or justify treating the container as later packing. For the same reason, the oil and tin cannot be taxed separately at different rates; the turnover must be assessed on the composite sale price of the sealed tins of oil. The court therefore upheld taxation on the full composite value.

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Issues: (i) Whether the cost of tin containers in which oil is sold can be deducted as packing charges under rule 6(cc)(i) of the Tamil Nadu General Sales Tax Rules, 1959; (ii) Whether, when oil is sold in sealed tins, the value of the tin and the oil can be taxed separately at different rates.

Issue (i): Whether the cost of tin containers in which oil is sold can be deducted as packing charges under rule 6(cc)(i) of the Tamil Nadu General Sales Tax Rules, 1959.

Analysis: The rule permits deduction only of packing charges that answer the statutory description. On the facts, what is sold is not oil alone but a composite commercial unit, namely tin of oil. The container is not a later or independent packing added after the sale of oil; it forms part of the goods sold. Separate billing for oil and tin does not alter the real nature of the bargain or convert the container value into deductible packing charges.

Conclusion: The cost of the tin container is not deductible as packing charges, and the assessee's contention fails on this issue.

Issue (ii): Whether, when oil is sold in sealed tins, the value of the tin and the oil can be taxed separately at different rates.

Analysis: The transaction is one of sale of sealed tins of oil as a single commercial article. The price paid is the price of the goods sold in that form, and the statute does not warrant splitting the transaction into separate sales of oil and tin merely because separate amounts are shown in the invoice. The separate taxation of the oil content and the tin container would disregard the real nature of the sale.

Conclusion: The value of the tin and the oil cannot be taxed separately at different rates; the turnover must be assessed on the composite sale price.

Final Conclusion: The references were answered in favour of the Revenue, the Tribunal's order was set aside, and the assessment order restoring taxation on the composite sale price stood revived.

Ratio Decidendi: Where goods are sold as a composite commercial unit with the container forming part of the bargain of sale, the container value is part of the sale price and is not deductible as packing charges merely because it is separately shown in the bill.

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