TaxTMI 
TaxTMI 
1985 (3) TMI 251
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....r, after October, 1971, the assessee started showing the price of the tins separately and charged sales tax at the rate of 3 per cent. The sales tax on vanaspati ghee was at the rate of 10 per cent. The Commercial Taxes Officer issued a notice to show cause to the assessee as to why sales tax at the rate of 10 per cent may not be charged on the sale of tins also and why a penalty should not be imposed for evading tax at the rate of 7 per cent. The assessee in reply to the show cause notice submitted that he had realised the tax in accordance with law. It was submitted that under proviso (v) to section 5 of the Rajasthan Sales Tax Act, 1954 (hereinafter referred to as "the Act"), the sales tax was payable at the rate which was applicable to packing material, when such packing material is separately charged. The rate of 10 per cent applicable to the sale of vanaspati ghee could only be charged on the sale of tins when not separately charged for but not in a case where price of the packing material was separately charged. It was submitted by the assessee that there could be 3 types of transactions. In the first kind of transaction, the purchasers used to supply the tins and the assess....
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.... of the assessee that he was manufacturing tins also and the inference drawn in this regard by the assessing authority was wrong. The assessee had applied on August 16, 1971, for entering tin plates in its registration certificate as raw material to be used by him. The impugned assessment was done after August 16, 1971 as the period of assessment was September, 1, 1971, to October 31, 1971, and as such he was entitled to get an advantage of the notification dated March 27, 1971. The learned Deputy Commissioner held that although the appellantassessee had applied for getting tin plates entered in his registration certificate but no evidence had been produced to show that he actually purchased tin plates and manufactured empty tins. It was further observed by the Deputy Commissioner that if this was so why the assessee reverted back to charging 10 per cent on the combined sale of the empty tins and the vanaspati ghee sold by him after the inspection of the Assistant Commercial Taxes Officer. It was thus clear that the assessee was not manufacturing empty tins and cannot, therefore, get the benefit of the Notification dated March 27, 1971. In this view of the matter the a....
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....arged for) at the same rate (if any) as is applicable to the sale of the goods themselves." It may also be mentioned that by Notification No. F. 5(21) FD (T)/71-3 dated March 27, 1971, a rate of 3 per cent was made leviable on the sale of empty tins. The assessee had started preparing the bills in the following manner, a copy of bill dated October 16, 1971 (annexure 4), is reproduced for illustration: R.S.T. No. 232/90 C.S.T. No. 14/Central/11/JP RAMNUGGER CANE & SUGAR CO. LTD. (VANASPATI DIVISION) Vanaspati Soap & Allied Products 164/181 Industrial Area, Jaipur-6 Bill No. 71-72/R/72 Dated 16-10-1971 M/s. Sethi Ludha Ram Relumal Subzi Mandi, Kota. C.S.T. No. 159 R.S.T. No. 23667 ----------------------------------------------------------------------- G.R. No. 21367 Dated: 14-10-1971 Documents through Bharat Goods Transport Co. Truck No. RJR 7311. ----------------------------------------------------------------------Quantity Particulars Rate Amount 100 Tins 'Maharaja' brand Vanaspati each containing 16.5 Kg. nett. 72.40 7,240.00 Excise duty as per G.P.I. No. 106 384.50 -------- Total 7,624.50 Sales tax 10% 762.45 -------- Total 8,386.95 Cost of 100....
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....s of the Supreme Court that: "Whether there was an agreement to sell the packing materials was a pure question of fact and that question could not be decided on fictions or surmises. The burden lay upon the Commercial Tax Officer to prove that a turnover was liable to tax and he could ask the assessee to produce relevant material. If the assessee did not produce the same, he could draw adverse inferences against the assessee; but he had to decide the crucial question whether the packing materials were the subject of the agreement of sale, express or implied. To ascertain these facts he could rely upon oral statements, accounts and other documents, personal inquiry and other relevant circumstances such as the nature and purpose of the packing materials used. " The Supreme Court remanded the case to the High Court with a direction to consider afresh the question whether the packing materials were subject-matter of the agreement of sale having regard to the relevant material and in the light of the observations made in the judgment. A perusal of the above case clearly shows that the question whether there was an agreement to sell the packing materials, is a pure question o....
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....lue of the containers was not assessable to sales tax unless separate price had been charged for the containers. On appeal the Supreme Court held that the value of the containers was assessable to sales tax under the Act if there was an express or implied agreement for the sale of such containers and the mere fact that the price of the containers was not separately fixed made no difference to the assessment of sales tax. It was further observed that the question as to whether there is an agreement to sell packing material is a pure question of fact depending upon the circumstances found in each case. In Hyderabad Asbestos Cement Products Ltd. v. State of Andhra Pradesh [1969] 24 STC 487 (SC), Hyderabad Asbestos Cement Products Ltd. (in short company) sent goods to outstation customers by rail under railway receipts with freight to pay. It made out an invoice at the catalogue rate and the customers paid the amount of the invoice less the freight. The result was that net price received by the company was the catalogue rate less the railway freight charged in respect of the goods transported to the destination. In a sample invoice relied upon by the State the company had made out t....
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.... the consumers. The price at which the State Trading Corporation could sell cement was fixed and it was f.o.r. destination, i.e., inclusive of railway freight. This case is of no relevance to the case in hand before us. In Patel Volkart Private Ltd. v. Commissioner of Sales Tax, M.P. [1972] 29 STC 515, another case of the Madhya Pradesh High Court, it was held that on the facts and circumstances of the case, the Tribunal was correct in holding that there was an implied contract of sale of packing materials, i.e., bardana and patti, along with the sale of cotton bales. It was also held that when different articles are transferred under a composite contract the rate available for either of the two cannot be charged. The different items will have to be charged at the different rates. The Tribunal was, therefore, justified in holding that the packing material cannot be charged at the rate prescribed for cotton. This case also does not render any assistance to the assessee as in this case it was also found as a matter of fact that the assessee was a dealer in packing material as well. Apart from that, there was no provision like proviso (v) to section 5(1) of the Act which laid down ....
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....ramount; it had overriding effect and if it stipulated that the freight was payable by the producer, such stipulation must prevail, notwithstanding any term or condition of the contract to the contrary. This case is totally distinguishable and lends no assistance for deciding the controversy raised in the present case before us. In State of Karnataka v. Shaw Wallace and Co. Ltd. [1981] 48 STC 169, a Division Bench of the High Court of Karnataka held that from the facts found by the Tribunal, it was clear that there was an agreement to sell the bottles and crates in which liquor was conveyed and there was also an agreement in regard to the price of those containers. Therefore, the turnover in regard to those items had to be determined and the appropriate rate of sales tax could be charged as provided in the Act. It was held that the value of glass bottles should be taxed under item 109 of the Second Schedule of the Karnataka Sales Tax Act, 1957, and the crates which were of wooden material should be taxed under section 5(1) of the Act. This case is based on the provisions contained in the Karnataka Sales Tax Act and can give no assistance for interpreting the provisions of provis....