Deduction for tax-paid packing material stands despite a sale-price explanation, as separate turnover relief remains intact.

Tax-paid packing material used for packing agarbattis remained deductible from taxable turnover under section 2(r)(ii) of the M.P. General Sales Tax Act, 1958. Explanation I to section 2(o) only expanded the sale-price definition by treating goods sold with packing material as inclusive of packing cost; it did not override the separate deduction provision. The two provisions operated in distinct fields, so the non obstante language in the explanation could not be read to defeat the statutory benefit expressly granted for tax-paid goods. The assessee was therefore entitled to the claimed deduction.

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Issues: Whether deduction under section 2(r)(ii) of the M.P. General Sales Tax Act, 1958, is allowable to an assessee on tax-paid packing material purchased for use in packing agarbattis sold along with the packing material, notwithstanding Explanation I to section 2(o) of that Act.

Analysis: Section 2(o), as amended, treats the sale price of goods sold together with packing material as inclusive of the cost of such packing material for the purpose of determining sale price. Section 2(r)(ii), however, separately allows deduction from taxable turnover of the sale price of goods in Parts II to VI of Schedule II which are tax-paid goods in the hands of the dealer. The two provisions operate in different fields: one governs computation of sale price, while the other grants deduction in computing taxable turnover. The non obstante language in Explanation I to section 2(o) cannot be extended beyond the sale-price definition so as to nullify the deduction expressly conferred by section 2(r)(ii). The consistent view of the Court has been that the explanation should be harmoniously construed and not read so widely as to defeat the statutory benefit attached to tax-paid packing material.

Conclusion: The deduction under section 2(r)(ii) was allowable, and the assessee was entitled to the benefit claimed on the packing material used for packing agarbattis.

Ratio Decidendi: A definition clause with a non obstante explanation cannot be construed to override a separate deduction provision in the taxing statute where both operate in distinct fields, and tax-paid packing material remains deductible from taxable turnover if the statute so permits.

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