TaxTMI 
TaxTMI 
1974 (6) TMI 56
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....he purchases of oil-cakes? (3) Whether, on the facts and in the circumstances of the case, the Tribunal was justified in holding that the applicant should not be allowed to plead an agreement either express or implied for sale of bardans at the stage of second appeal and to adduce a fresh evidence before the Tribunal to support such agreement?" 2.. Out of these three questions, questions Nos. (1) and (3) now do not survive to be considered because they are not pressed by the petitionerassessee. We are, therefore, left only with question No. (2) and in the following portion of this judgment, we shall refer only to those facts which are relevant to this question. 3.. The facts of the case are that the petitioner-assessee is running a solvent extraction plant and for the purpose of that plant, it makes the purchases of oil-cakes from registered dealers on payment of tax. It is stated that it is usual for the petitioner to make the purchases of oil-cakes and the bardans (containers) separately. After the oil-cakes so purchased go through the process of solvent extraction, the petitioner gets the resultant products in the form of oil and de-oiled cakes. It is found that thereaf....
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....ously paid because when the goods are sold packed in packing materials the sale is the sale of goods only and the property in the packing materials passes only incidentally. In reply to the petitioner's contentions regarding section 15A the revenue has contended that the fiction contemplated by this section is only for the purpose of fixing the rate of tax and hence it cannot be carried further for the purpose of showing that there was the sale of bardans within the meaning of rule 43. 6.. In order to appreciate the respective contentions of the parties, it would first be necessary to refer to the relevant provisions in the Act as well as the Rules. Section 15A was introduced in the Act by Act No. 25 of 1962. It is found in the following terms: "15A. Notwithstanding anything contained in sections 7, 8, 9, 10, 10B, 13 and 14, where goods packed in any materials are sold or purchased, the materials in which the goods are so packed shall be deemed to have been sold or purchased along with the goods and the tax shall be leviable on such sale or purchase of the materials at the rate of tax, if any, as applicable to the sales, or as the case may be, purchases of the goods themselve....
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....ally sold in this case. Admitted facts show that what was sold by the assessee in the course of export trade was de-oiled cakes. The passing of property in the bardans in which these de-oiled cakes were packed was only incidental to the sale of de-oiled cakes. The assessee has neither pleaded nor has it led any evidence to show that the transactions in question involved the separate sale of bardans. But to bring its case of sale under rule 43, the assessee puts reliance on the deeming fiction contemplated by section 15A. 8.. The first question which, therefore, arises for determination is what is the purpose and function of the fiction created by section 15A of the Act. The consideration of this question would also involve the question whether this fiction is enacted by the legislature only for the purpose of determining the rate of tax in cases where the goods are sold along with the containers, or whether it is enacted for a comprehensive purpose including the purpose of settling the claims of draw-back and set-off under rule 43. A bare perusal of section 15A shows that it was enacted with a view to obviate the necessity of applying two rates of tax under the Act when certain ....
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.... are sold along with the packing materials involves two types of sales, viz., the sale of goods and the sale of packing materials, both the sales are to be treated as one integrated sale. It is in the background of these two conclusions, which could legitimately be drawn from the provisions of subsection (1) of section 15A, that we should appreciate the contentions raised by Shri Modi on behalf of the petitioner. 10.. Since for showing the sale of bardans, Shri Modi puts reliance on the fiction created by section 15A, the question which immediately arises for our consideration is whether this fiction can be carried beyond the purpose for which it was created. Though it is true that every legal fiction should be carried to its legal consequences, it is equally true and well-settled that logical fictions are created only for definite purposes and they are limited only to the purposes for which they are created and, therefore, could not be extended beyond their legitimate field. We have already noted above the purpose for which the fiction contemplated by section 15A was created. That purpose was to fix one rate of tax in cases where goods are sold in packing materials. If that be ....
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....e been to increase the value of total turnover by inclusion of the value of packing materials which are deemed to have been sold. We find no justification for such a view because clause (c) of section 3(5) has no connection with sub-section (1) of section 15A, as it would come into play only in cases wherein "no tax is leviable under section 15A". If tax is leviable under section 15A, one of the main requirements of clause (c) would remain unsatisfied. That being the position clause (c) cannot be linked with sub-section (1) of section 15A. In fact, clause (c) was to give full protection to the goods specified in Schedule A which are altogether exempt from sales tax. This becomes more evident from the provisions of sub-section (2) of section 15A because it contemplates tax on packing materials even in cases wherein tax-free goods are packed therein, provided that the packing materials are purchased for resale on a certificate under section 12. It follows from a reading of clause (c) of section 3(5) along with sub-section (2) of section 15A that if packing materials are purchased for resale under a certificate contemplated by section 12, then even if tax-free goods are packed therein....