Packing material resale test: wooden boxes used for transport and protection were not treated as independent resale goods.

Wooden boxes used to pack manufactured goods were held not to amount to goods resold as independent articles. Their treatment depended on the contract and surrounding facts, and the Tribunal's finding that the boxes were used for packing, transport and protection of finished goods was upheld as a factual conclusion. On that basis, the boxes were treated as consumable stores used in the course of manufacture and not as subject-matter of a separate resale under section 15 of the Gujarat Sales Tax Act, 1969. Purchase tax liability therefore remained payable.

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Issues: Whether wooden boxes used in packing manufactured goods could be treated as goods resold so as to attract the benefit of section 15 of the Gujarat Sales Tax Act, 1969, or whether the Tribunal was right in holding that there was no resale and the purchase tax was exigible.

Analysis: The reference turned on the true nature of the transaction relating to the wooden boxes. The Court noted that whether packing material is sold as a separate article or merely transferred without separate consideration depends on the contract and the surrounding facts, and is essentially a question of fact. The Tribunal had relied on the dealer's own admission that the wooden boxes were used to pack finished goods for transport and protection in the course of marketing. On that material, the Tribunal concluded that the boxes were consumable stores used in the manufacture of taxable goods and that there was no independent resale of the boxes attracting section 15. The Court found no infirmity in that factual conclusion.

Conclusion: The Tribunal was correct in holding that the wooden boxes were not resold as independent goods and that the purchase tax liability survived; the question was answered in the affirmative, in favour of the Revenue and against the assessee.

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