TaxTMI Login
AI Drafter - (New and Powerful) ✕
Generate professional replies, appeals, opinions to Show Cause Notices, assessment orders, audit objections, and other legal communications using TaxTMI's AI Drafter.
Just a moment...
AI Drafter - (New and Powerful) ✕ Generate professional replies, appeals, opinions to Show Cause Notices, assessment orders, audit objections, and other legal communications using TaxTMI's AI Drafter.
Press 'Enter' to add multiple search terms. Rules for Better Search
Use comma for multiple locations.
---------------- For section wise search only -----------------
Accuracy Level ~ 90%
of 
Press 'Enter' after typing page number.
of Press 'Enter' after typing page number.
No Folders have been created
Are you sure you want to delete "My most important" ?
NOTE:
of Press 'Enter' after typing page number.
of Press 'Enter' after typing page number.
All Case Laws
of Press 'Enter' after typing page number.
of Press 'Enter' after typing page number.
All Case Laws
Note
Bookmark
Share
Don't have an account? Register Here
of Press 'Enter' after typing page number.
Issues: (i) Whether purchase tax under section 7-A of the Tamil Nadu General Sales Tax Act, 1959 was attracted in respect of empty bottles used for packing I.V. fluids, notwithstanding section 3(7) of the Act; (ii) Whether the empty bottles were "used" in the manufacture of I.V. fluids within section 7-A(1)(a) of the Act.
Issue (i): Whether purchase tax under section 7-A of the Tamil Nadu General Sales Tax Act, 1959 was attracted in respect of empty bottles used for packing I.V. fluids, notwithstanding section 3(7) of the Act.
Analysis: Section 7-A is a charging provision and applies where the purchase is of taxable goods made in circumstances in which no tax is payable at the purchase stage, and the goods are later consumed or used in the relevant manner. Section 3(7) operates only to treat containers or packing materials as taxable along with the goods contained in them for the purpose of the sale turnover of the finished product. It does not prevent levy at the purchase point where the seller of the empty bottles has not suffered tax. The statutory schemes were held to be compatible.
Conclusion: Purchase tax under section 7-A was held to be attracted, and the assessee's contention based on section 3(7) failed.
Issue (ii): Whether the empty bottles were "used" in the manufacture of I.V. fluids within section 7-A(1)(a) of the Act.
Analysis: The word "uses" was introduced in section 7-A(1)(a) to broaden the earlier narrower approach requiring complete loss of identity of the purchased goods. For the purpose of manufacture, the relevant inquiry is whether the goods are required to bring the finished product to a marketable stage and are integrally connected with the manufacturing activity. Empty bottles were necessary for making the I.V. fluids marketable, and therefore their role fell within the enlarged statutory expression.
Conclusion: The empty bottles were held to have been used in the manufacture of I.V. fluids within section 7-A(1)(a).
Final Conclusion: The levy of purchase tax on the turnover of empty bottles was upheld, and the revision was dismissed.
Ratio Decidendi: Where packaging containers are indispensable to bringing the manufactured goods to a marketable stage, and the relevant statutory language has been broadened to include "use" in manufacture, purchase tax can be levied on the purchase of such containers even though the finished goods are separately taxed at sale under a packing-material provision.
TaxTMI 
