1997 (2) TMI 527

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.... officer rejected the accounts and made the best judgment assessment. On appeal before the Appellate Assistant Commissioner, the assessee contended that the tax levied on the sales turnover of gunnies used as packing materials sold along with coconuts is not justified. Coconut is a commodity liable for exemption. If the content is exempt, the container is equally eligible for exemption and the container is taxable at the rates applicable to the contents. Relying upon the provisions of section 3(7) of the Tamil Nadu General Sales Tax Act, 1959, as it stood prior to the amendment, the department contended that inasmuch as the packing materials were charged separately, tax is leviable on the container. However, the Appellate Assistant Co....

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....nt Commissioner are rendered with regard to the subject-matter arising prior to the amendment, and therefore those decisions are not applicable to the facts of this case. 4.. On the other hand, the learned Additional Government Pleader (Taxes), while supporting the order passed by the Joint Commissioner, submitted that inasmuch as the price for the gunny bags was charged separately, the packing charges and the value of the container are not exempted under the provisions of section 3(7) of the Tamil Nadu General Sales Tax Act, 1959. 5.. We have heard both the learned counsel appearing for the assessee/ appellant as well as the learned Additional Government Pleader (Taxes). The fact remains that the assessee sold during the year 1986-87....

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....ges will have to be put on a rational basis with no scope for evasion, and at the same time, avoid harassment to dealers. The Government have, therefore, decided to amend section 3 of the Tamil Nadu General Sales Tax Act, 1959 (Tamil Nadu Act 1 of 1959), so as to tax packing materials at the same rate as the contents, if the contents are taxable at the hands of the dealer and to exempt the packing materials, if the contents are exempt from tax at the hands of the dealer. Therefore, a combined effect of sub-sections (7) and (8) is that the price of the container or packing materials and the packing charges will be taxable or not, depending on the fact whether the goods contained in the container or packet are liable to, or exempt from tax in....