Packing materials form part of taxable turnover when goods are sold in packed form, despite separate pricing on labels.

Where goods are sold in packed form, the price, cost or value of the containers or packing materials forms part of the taxable turnover of the goods under section 3(7) of the Tamil Nadu General Sales Tax Act, 1959, and tax is levied at the rate applicable to the packed goods. Separate label pricing for the goods and packing material does not change the character of the sale. Prior tax paid on the containers at an earlier stage does not create an exemption when the packed goods remain taxable. The container value was therefore correctly included in turnover, and no exemption was available.

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Issues: Whether the value of containers or packing materials used for selling panjamirtham in packed form was liable to be included in the taxable turnover and taxed at the rate applicable to the goods contained therein, notwithstanding separate label pricing or prior tax on the containers.

Analysis: Section 3(7) of the Tamil Nadu General Sales Tax Act, 1959 provides that where goods are sold together with containers or packing materials, the turnover of the goods includes the price, cost or value of such containers or packing materials and tax is levied at the rate applicable to the goods packed therein. The sale in question was of panjamirtham in packed containers, and the separate mention of the price of the goods and packing material on the label did not alter the character of the sale. The earlier payment of tax on the containers at a prior stage did not create an exemption when the packed goods themselves were taxable. The rule governing such transactions is that packing materials form part of the turnover of the goods sold in packed form.

Conclusion: The container value was rightly included in the taxable turnover, and the assessee was not entitled to exemption.

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