Concessional turnover tax for packing material applies where prior taxation makes the later sale a second or subsequent sale.

Packing material used for selling cement was held eligible for the concessional one per cent turnover tax rate under the notification dated 30 March 1994 if it had already suffered tax in an earlier transaction, because it would then constitute a second or subsequent sale within the scope of the reduced-rate scheme under the Karnataka Sales Tax Act. The Court, however, found that the existing record did not conclusively establish whether prior taxation had in fact occurred, so the matter required fresh factual examination by the assessing officer. The legal question was answered in favour of the assessee, and the matter was remanded for verification of the factual position.

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Issues: Whether packing material used for selling cement, if it had suffered tax at an earlier point, was liable to turnover tax at the reduced rate of one per cent under the notification dated 30 March 1994, and whether the matter required fresh factual examination by the assessing officer.

Analysis: The notification issued under section 8A of the Karnataka Sales Tax Act, 1957 reduced the tax payable under section 6B on turnovers relating to second and subsequent sales or purchases in the State to one per cent. The disputed question was whether the packing material purchased by the assessee and used for packing cement was a second or subsequent sale, in which event the concessional rate would apply. The Court held that if the packing material had already suffered tax and was then used for selling the cement, it would fall within the category of second or subsequent sale and attract only one per cent turnover tax. At the same time, the Court found that the existing record did not conclusively establish whether the packing material had in fact suffered tax at an earlier point, which was a factual issue for the assessing officer.

Conclusion: The question of law was answered in favour of the assessee, and the lower order was set aside with a remand for fresh consideration to determine the factual position regarding prior taxation of the packing material.

Ratio Decidendi: Where packing material used in the sale of goods has already suffered tax in an earlier transaction, its later sale is to be treated as a second or subsequent sale and is eligible for the concessional turnover tax rate prescribed by the notification.

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