Sales tax on packed goods turns on the real nature of the transaction, not separate billing or labels.

Sales promotion expenses were held to fall outside the limited scope of section 62(1)(e) of the Gujarat Sales Tax Act because the provision concerns determination of tax on a sale, not recharacterisation of a separate charge as part of sale price. Packing materials supplied with goods were treated as part of an integrated sale on the factual finding that the goods were sold only in packed condition and no real separate purchase option existed. Separate bills and correspondence were insufficient to establish two distinct sales. Tax on the packing materials therefore followed the rate applicable to the goods sold, and the Revenue's view was upheld.

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Issues: (i) Whether a question as to whether sales promotion expenses formed part of the sale price fell within the scope of section 62(1)(e) of the Gujarat Sales Tax Act, 1969; and (ii) whether the packing materials supplied with the goods constituted a separate sale or formed part of an integrated sale so as to be taxable at the rate applicable to the goods sold.

Issue (i): Whether a question as to whether sales promotion expenses formed part of the sale price fell within the scope of section 62(1)(e) of the Gujarat Sales Tax Act, 1969.

Analysis: Section 62(1)(e) enables determination of whether tax is payable in respect of a particular sale. The controversy raised before the Deputy Commissioner was not limited to whether tax was payable on a specific sale or at what rate, but concerned whether a separate charge described as sales promotion expenses formed part of the sale price. Reading the definition provisions of sale and sale price along with section 62(1)(e), the question was held to fall outside that provision.

Conclusion: The question was beyond the scope of section 62(1)(e) and the view of the Tribunal was upheld in favour of the Revenue.

Issue (ii): Whether the packing materials supplied with the goods constituted a separate sale or formed part of an integrated sale so as to be taxable at the rate applicable to the goods sold.

Analysis: The nature and ingredients of the transaction had to be examined as a question of fact. The separate bills and correspondence were insufficient to establish two distinct sales where the factual finding showed that the goods were sold only in packed condition and there was no real option to purchase them otherwise. On that factual basis, the transaction was treated as one integrated sale. The packing material, therefore, attracted tax at the rate applicable to the goods packed.

Conclusion: The packing materials were correctly treated as part of the integrated sale and were taxable at the rate applicable to the goods sold, in favour of the Revenue.

Final Conclusion: Both questions were answered against the assessee and the reference was disposed of by affirming the Revenue's position on the scope of the determination provision and on the tax treatment of packing materials in the integrated transaction.

Ratio Decidendi: For sales tax purposes, the character of a transaction involving goods and packing material depends on the real nature and ingredients of the sale as found on facts, and a charge outside the limited statutory scope for determination cannot be recast as such merely by separate billing or labelling.

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