Purchase tax on packing containers applies where bottles are essential to make intravenous fluids commercially marketable.

Containers used to pack and market intravenous fluids were held to be goods used in or for the manufacture of the fluids for purchase tax purposes under section 7-A(1)(a) of the Tamil Nadu General Sales Tax Act, 1959. The court reasoned that the deeming rule in section 3(7), which includes container turnover in the turnover of the contents, does not exclude liability under section 7-A where the purchased goods had not suffered tax and were later used by the dealer. Because the bottles were necessary to make the fluids commercially marketable, the purchase tax was rightly attracted.

---

---

Issues: Whether bottles used for packing and marketing intravenous fluids were goods used in or for the manufacture of the fluids so as to attract purchase tax under section 7-A(1)(a) of the Tamil Nadu General Sales Tax Act, 1959, notwithstanding that the turnover of the bottles was included in the turnover of the fluids under section 3(7) of that Act.

Analysis: Section 3(7) deems containers sold with goods to form part of the turnover of the goods contained therein and subjects the whole turnover to tax at the rate applicable to the contents. That deeming provision does not exclude the operation of section 7-A where the goods purchased had not suffered tax and were later used by the dealer. The bottles were not sold as independent articles but as part of a composite marketable product, namely intravenous fluids packed in bottles. Applying the principle that any process or material integrally connected with making the goods commercially marketable falls within the expression "in the manufacture of goods", the bottles were necessary for the sale of the fluids and therefore constituted goods used in or for the manufacture of the fluids.

Conclusion: The purchase tax under section 7-A(1)(a) was rightly attracted, and the challenge failed.

Final Conclusion: The inclusion of bottle turnover under section 3(7) did not take the assessee outside section 7-A, and the writ petition was liable to be dismissed.

Ratio Decidendi: Containers essential to make a manufactured product marketable may be treated as goods used in or for manufacture for the purpose of purchase tax, even if their turnover is separately deemed to form part of the turnover of the finished goods.

---