TaxTMI 
TaxTMI 
1990 (1) TMI 277
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.... negative, whether in the facts and circumstances of the case, the Tribunal was right in confirming the levy of purchase tax under section 14 of the Act?" 2.. It is evident that the real question of law to be answered is the first question, the second question being consequential. The assessee is an exporter of footwear. Its purchases are from registered dealers to whom it furnishes undertaking in form 14. The certificate in form 14 is also given when the assessee purchases packing material which is used for packing the footwear for export. The departmental authorities took the view that the packing material for which the assessee had given undertaking in form 14 in terms of section 12 of the Bombay Sales Tax Act, 1959 (for short "the Ac....
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....gly the assessee, it was held, had violated the undertaking given by it in form 14 and was liable to pay the difference between fall purchase tax payable and concessional purchase tax paid by it on its purchases of packing material. 4.. Shri Jetley, the learned counsel for the department, stated that the first, i.e., the main question of law referred to this Court in this case involved a finding of fact and that this Court, therefore, should not answer the question. For this purpose he placed reliance on the following observations of the Supreme Court in its decision in Hyderabad Deccan Cigarette Factory v. State of Andhra Pradesh [1966] 17 STC 624: "........Whether there was an agreement to sell the. packing materials is a pure quest....
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....ion which throws light on the subject is that of the Supreme Court in the case of Hyderabad Deccan Cigarette Factory [1966] 17 STC 624. It was held: "(i) 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 state....
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....C 277. The ratio of the aforesaid decisions appears us to be that in a case where there is no formal contract of sale of packing materials, the contract of sale will be implied provided that the packing material used is not of a routine type and is also not of insignificant value. The packing material which is merely a cheap and convenient vehicle for transporting the goods sold will not imply a contract of sale. This will be the test for deciding whether in a given case there is an implied contract of sale of packing materials. A number of decisions of different High Courts were cited before us by the two sides. Each case was and had to be decided on its own facts. Obviously there could not be any hard and fast rule. As regards the pres....
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.... against about 9 per cent in the present case. In our judgment, the question whether the packing instructions are more detailed or less detailed is not of much consequence. What is pertinent is whether packing had to be done according to the specific instructions given by the buyer and whether the cost of that packing was so insignificant that the packing could be treated as a cheap and convenient-vehicle for transport of goods. Having regard to the above discussion, we are of the view that the conclusion of the Tribunal that there was no implied contract of sale as regards packing material was not correct. Amongst the decisions relied upon by Shri Jetley, the main decision was that of Orissa High Court in Shamsuddin Akbar Khan & Co. v. ....