Implied sale of packing materials can include gunny-bag value in taxable turnover when commercial circumstances support it.

Where packing materials used with sold goods have a substantial and ascertainable value, the commercial setting may support an inference of an implied agreement to sell those materials along with the goods. On that basis, the value of gunny bags used to pack wheat products was treated as part of taxable turnover. The absence of an express invoice reference was not decisive because the surrounding circumstances, including the pricing and the nature of the transaction, justified the inference of sale of the bags. The Tribunal's refusal to draw that inference was held erroneous, and the assessment on the gunny-bag turnover was sustained.

---

---

Issues: Whether, on the facts, the value of gunny bags used for packing wheat products formed part of the taxable turnover on the basis of an implied agreement to sell the bags.

Analysis: The assessment proceedings proceeded on the footing that the sale price of wheat products included the value of the gunny bags and that the bags were separately estimable at a substantial value per bag. The existence of an express mention of the bags in the invoices was not treated as decisive, because the surrounding circumstances, the nature of the transactions, the magnitude of the bag value, and the commercial setting could justify an inference that the bags themselves were intended to be sold along with the goods. The earlier authority requiring remand for inquiry into an implied contract was held inapplicable on these facts, while the reasoning supporting inference of sale of packing materials was treated as applicable.

Conclusion: The Tribunal erred in rejecting the inference of an implied agreement to sell the gunny bags, and the levy on the value of the bags was upheld.

Final Conclusion: The revisions succeeded and the assessment made by the Revenue on the gunny-bag turnover was sustained without remand.

Ratio Decidendi: Where packing materials used in the course of sale have a substantial and ascertainable value and the surrounding circumstances support the commercial inference, an implied agreement to sell the packing materials may be inferred and their value included in taxable turnover.

---