Implied sale of containers can attract purchase tax where container value is substantial and inclusion in sale price is unproven.

Purchase tax under section 7-A of the Tamil Nadu General Sales Tax Act, 1959, may be levied on gunny bags bought from unregistered dealers and used as containers for oil-cake consigned outside the State where the container value is substantial and the assessee does not prove that it formed part of the sale price of the contents. On those facts, the absence of proof of no separate sale of the containers can justify an inference of an implied sale of the gunny bags. The broad view that the sale of gunnies could not be separated from the sale of oil-cake was found unsustainable on the record, and the Revenue's challenge succeeded.

---

---

Issues: Whether purchase tax under section 7-A of the Tamil Nadu General Sales Tax Act, 1959, was leviable on the value of gunny bags purchased from unregistered dealers and used as containers for oil-cake consigned outside the State.

Analysis: The value of the gunny bags was substantial in relation to the value of the oil-cake, and the assessee did not establish that the value of the containers was included in the sale price of the contents. In such circumstances, the absence of proof by the assessee that there was no separate sale of the containers warranted an inference of an implied sale of the gunny bags also. The Tribunal's general approach that the sale of gunnies could not be separated from the sale of oil-cake was held unsustainable on the facts, especially where the container value was not insignificant.

Conclusion: Purchase tax was leviable on the value of the gunny bags, and the Revenue's challenge succeeded.

Ratio Decidendi: Where the value of the container is substantial and the assessee fails to prove that it was included in the sale price of the contents, an implied sale of the container may be inferred and purchase tax may be levied accordingly.

---