Composite sale of first-aid boxes excludes purchase tax on containers and supports multi-point taxation classification.

Purchase tax was not attracted on wooden boxes bought from non-dealers and later varnished and used as first-aid boxes, because the boxes were sold as part of a composite transaction with their contents and the sale price included the container value. First-aid boxes were also held not to fall within entry 95 of the First Schedule, since in common parlance they were composite containers of medicines and dressing materials rather than the goods described in that entry. The Board's circular treating them as liable only to multi-point tax at 4 per cent supported that classification.

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Issues: (i) Whether the purchase of wooden boxes, subsequently varnished, polished and used as first-aid boxes, attracted purchase tax under section 7-A(1)(b) of the Tamil Nadu General Sales Tax Act, 1959. (ii) Whether first-aid boxes fell under entry 95 of the First Schedule or were liable only to multi-point tax at 4 per cent under the Board's circular.

Issue (i): Whether the purchase of wooden boxes, subsequently varnished, polished and used as first-aid boxes, attracted purchase tax under section 7-A(1)(b) of the Tamil Nadu General Sales Tax Act, 1959.

Analysis: The wooden boxes were purchased from persons other than dealers, then improved and used as containers for first-aid materials and sold as first-aid boxes. The decisive consideration was that the containers themselves were sold along with the contents and the sale price included the value of the container. In that situation, the statutory condition for levy of purchase tax on disposal otherwise than by way of sale was not satisfied.

Conclusion: The purchase of the wooden boxes did not attract purchase tax under section 7-A(1)(b) of the Tamil Nadu General Sales Tax Act, 1959.

Issue (ii): Whether first-aid boxes fell under entry 95 of the First Schedule or were liable only to multi-point tax at 4 per cent under the Board's circular.

Analysis: The first-aid boxes contained patent medicines, cotton and dressing materials, and the sale price included the cost of the box as well as the contents. On a common parlance understanding, the product could not be brought within entry 95 of the First Schedule. The Board's circular also clarified that first-aid boxes were liable to multi-point tax at 4 per cent, supporting the classification adopted by the Tribunal.

Conclusion: First-aid boxes were not taxable under entry 95 of the First Schedule and were liable to multi-point tax at 4 per cent.

Final Conclusion: The revision failed, and the Tribunal's view on both purchase tax and classification was left undisturbed.

Ratio Decidendi: Where a container is sold along with its contents as part of a composite sale price, purchase tax on the container is not attracted merely because the container was originally purchased from a non-dealer, and classification must be made according to common parlance when the article does not fit the proposed entry.

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