TaxTMI 
TaxTMI 
1978 (3) TMI 200
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.... these factories and sell full pressed bales within the State and outside. 3.. The petitioner-firm has been assessed to pay sales tax both under the State Act and the Central Act for the period commencing from 18th October, 1963, to 4th November, 1964. For the aforesaid period, respondent No. 4, who is the assessing officer, determined the gross turnover at Rs. 1,43,84,771.00 and the tax has been levied on the break-up as below: (1) Sales of fully pressed cotton bales without C form taxable at 1 per cent Rs. 1,42,45,896.00 (2) Sales of hessian without C form and hoops taxable at 10 per cent-tax Rs. 13,887.50 Rs. 1,38,875.00 ------------------ Rs. 1,43,84,771.00 ------------------ The petitioners have by this petition challenged the levy of sales tax on item No. (2) above. 4.. It is alleged by the petitioners that when the petitioners purchase raw cotton and get it ginned and pressed, they pay the ginning and pressing charges per khandi of cotton but do not pay anything for the bardana, hessian and hoops, which the pressing factory uses for pressing the bales. It is also alleged that the petitioners receive orders for supply of specified number of fully press....
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....oking to the petition and the return, it is clear that it is not the case of either party that the price of cotton bales fully pressed was quoted as price per bale and it was not determined on the basis of the weight of cotton but determined only on the number of bales or the weight of bales as they were. 9.. It was contended on behalf of the petitioners that, in view of these facts which emerge from the petition and the return, it is not disputed that the price quoted in the contracts is the price of cotton per khandi and, while determining the price, the standard weight of packing material is deducted from the weight of each bale, and it is only on that basis that the price of cotton sold is calculated. This, according to the learned counsel, clearly indicates that there is no contract of sale of the packing material either express or implied and, in the absence of that, it could not be said that the packing material also is sold and the assessment made on that basis is not justified. The learned counsel for the petitioner in support of his contention placed reliance on the decision reported in Binod Mills Co. Ltd. v. Commissioner of Sales Tax, M.P.[1972] 29 S.T.C. 413. In the....
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.... arrived at by the Tribunal that the last three conditions have been satisfied in the present case. The question then is, whether there has been an agreement between the parties for the purpose of transferring title in the packing materials. When there is an agreement to purchase cotton to be delivered by the seller to the buyers, it is implicit in the contract that the goods should be delivered as packed. We can, therefore, imply that there is a contract to pay for and purchase the packing materials as well." 12.. It is therefore clear that in this decision the facts found led to an inference that the sale of cotton included the sale of the packing material as well. The decisions of this Court reported in Nimar Cotton Press v. Sales Tax Officer[1961] 12 S.T.C. 313 (F.B.). and Vimalchand v. Commissioner of Sales Tax, M.P.[1968] 22 S.T.C. 22., and the decision in Bhagwandas v. Commissioner of Sales Tax, M.P.[1978] 41 S.T.C. 387. (Misc. Civil Case No. 147 of 1972), referred to above, are cases where an inference has been drawn of an implied contract of sale of the packing material and, in none of these cases, it was found as a fact that the price of cotton was quoted per khandi an....
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....ment succeeded in discharging that burden. Reference in this connection may be made to Shamsuddin Akbar Khan and Co. v. State of Orissa[1970] 26 S.T.C. 280. , where the Orissa High Court took similar view in relation to the containers used for transporting tax-free gudaku. Similar view was expressed by the Allahabad High Court in Burhwal Sugar Mills Co. Ltd. v. Sales Tax Officer[1969] 23 S.T.C. 241., where the question related to gunny bags in which sugar was sold." It was on these special facts of that case, their Lordships held that there was no implied sale of the packing material. 14.. It is thus clear that, on the facts that emerge in this petition, no inference could be drawn of an implied contract of sale of the packing material. Admittedly, there is no express contract of sale of the packing material and, therefore, the assessment made, in item No. (2) quoted above, on the sale of the packing material could not be justified. 15.. The alternative contention advanced by the learned counsel for the petitioner, in our opinion, is not material for the decision of the present case. That question may arise when, admittedly, the cotton is sold in bales and the price is det....