TaxTMI 
TaxTMI 
2005 (11) TMI 450
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....e assessee-M/s. Khetu Ram Bishambar Dass was in the business of manufacture and sale of "snuff" which was a tax-free item (being a tobacco product) by virtue of entry No. 46 of Schedule II of the Bengal Finance (Sales Tax) Act, 1941, as extended to Delhi (hereinafter referred to as "the said Act"). The assessee was a registered dealer both, under the local (viz., the said Act) and the Central Sales Tax Act, 1956. The assessee, in its application seeking registration under both these enactments, had mentioned tin containers, wrapping paper, waste paper, labels, wooden cases, patti, nails, bardana, carton boxes, etc., as meant for packing of the snuff manufactured and sold by it. It is pertinent to note that in the certificate issued under the Central Act these items were duly specified under the head for use in the packing of goods for sale/resale. In the certificate under the said Act they were, however, entered in the column "for resale". This difference in treatment is of material importance. According to the assessee, it had been shown under the column "for resale" in the registration certificate under the local Act (i.e., the said Act) because there was no separate column print....
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....e occasioning the movement of such goods from Delhi, or a sale ffected by transfer of documents of title of such goods effected during the movement of such goods from Delhi, to a place outside India and after the goods have crossed the customs frontiers of India; and] of containers or other materials for the packing of goods of the class or classes so specified for sale: Provided that in the case of such sales a declaration duly filled up and signed by the registered dealer to whom the goods are sold and containing the prescribed particulars on a prescribed form obtainable from the prescribed authority is furnished in the prescribed manner by the dealer who sells the goods: Provided further that where any goods specified in the certificate of registration are purchased by a registered dealer as being intended for resale by him or for use by him as raw materials in the manufacture of goods for sale, but are utilised by him for any other purpose, the price of the goods so purchased shall be allowed to be deducted from the gross turnover of the selling dealer but shall be included in the taxable turnover of the purchasing dealer." It is pertinent to note that the Delhi....
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....he certificate of registration are purchased by a registered dealer as being intended for resale by him or for use by him as raw materials in the manufacture of goods for sale, but are utilised by him for any other purpose, the price of the goods so purchased shall be allowed to be deducted from the gross turnover of the selling dealer but shall be included in the taxable turnover of the purchasing dealer. In other words, sales to a registered dealer of containers or other materials for the packing of goods of the class or classes specified for sale would be required to be deducted from the gross turnover of such dealer to arrive at his taxable turnover. At the same time if the certificate of registration under which the goods are purchased and are shown therein to be intended inter alia for resale by him but are not so utilised then insofar as this dealer, i.e., the purchasing dealer, is concerned, the said amount shall be included in his taxable turnover. After the introduction of the new Act, which was after the period in consideration in the present reference, the amendment introduced was that the containers or materials used for packing of goods of the class or classes spec....
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....ucted from the gross turnover, then there should have been a column providing for the same under the local registration certificate. We are in agreement with the submission made by Mr. Chawla that these items have been entered under the head "for resale" in the local registration certificate not because they were meant for resale but because the appropriate authority did not provide for a column in the registration certificate. This, however, would not enable us to detract from the position that the assessee had claimed deduction on account of containers and other materials for packing of goods and the same ought to have been shown in the certificate as such. That being the case, these goods were not entered for resale and, therefore, it could not be argued that because they were not resold, therefore, the second proviso came into play. The position was altered in 1975 but that would not apply for the period under consideration. Accordingly, our answer to question No. 1 would be that in the facts and circumstances of the present case, the Tribunal was right in holding that the second proviso to section 5(2)(a)(ii) did not come into play. The second question raised before us is base....