TaxTMI 
TaxTMI 
2010 (4) TMI 980
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.... exempted item was exempted. No trade tax was levied on the packing material of the country liquor, i.e., on poly pouches. Thereafter notices under section 21(2) of the U.P. Trade Tax Act, 1948 of dated 23rd of February, 2004 for the assessment years 1997-98 to 2000-01 were issued by the Deputy Commissioner (Assessment), Trade Tax, Pilibhit filed as annexure 8 to the petition to tax poly pouches (packing material) for reassessment on the ground that the country liquor has been sold in poly pouches on a fixed rate. The petitioner has added the price of the poly pouches/packing material in the price of the liquor and directly realised its price from purchasers. This has been termed as "capsuling charges" in the account books. The Department has sought to levy trade tax on the sale of the said packing material, i.e., poly pouches charges as "capsuling charges" by issuing reassessment notices impugned in the present petition. A counter-affidavit on behalf of the respondents has been filed by Shri Vijai Kumar, Deputy Commissioner (Assessment), Trade Tax. It is accepted that the country liquor is an exempted item under the U.P. Trade Tax Act. The country liquor has been sold on the pric....
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....acking material in the bills. The question of determination of liability of the petitioner with respect to the sale of packing material, i.e., poly pouches which contain country liquor, an exempted item, is the question involved in the present writ petition. For the sake of convenience section 3AB of the U.P. Trade Tax Act, 1948 is reproduced below: "3AB. Rate of tax on packing material sold with goods.-Notwithstanding anything to the contrary in this Act, where goods are sold or purchased together with packing materials, the sale or purchase of the packing material shall- (a) be liable to tax at the rate applicable to the sale or purchase of the goods sold or purchased together with such packing material; (b) not be liable to any tax, if the sale or purchase of such goods is exempt from tax at the hands of the dealer." It is also not in dispute that the said provision was in operation during all the material time. The said section opens with an obstante clause and has an overriding effect over other provisions of the Act. Its clause (a) is not relevant for the present purpose. The present section 3AB was newly inserted with effect from 1st of August, 1990 by U.P. Act No. 28 of....
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....er observed that the mere fact that the containers and goods were sold separately or charged separately will not make any difference in the matter of computation of turnover of goods and determination of tax or the rate of tax and the point at which the tax will be levied under section 5(5) of the Kerala Act vide para 19 of the report (para 21 in STC). Ultimately, it has been held as follows (at page 607 of 108 STC): "The law is quite clear that when the goods contained in containers or packed in packing materials are sold the containers and the packing materials will have to be taxed at the same rate at which the goods are liable to be taxed. It will not make any difference if the price payable for the containers or packing materials are shown separately in the bills raised by the seller." The learned standing counsel, however, submits that on a plain reading of section 3AB, it is evident that it has no application in the present case for the simple reason that the petitioner has charged the price of poly pouches separately. There are two contracts of sale-one for sale of country liquor and another for sale of poly pouch, submits the learned standing counsel. Much emphas....
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....oherent whole. ME. 4 At the same time, simultaneously, ME. 5 Without interruption, continuously, consecutively. ME. 6 In concert; with unit of action; unitedly. ME. 7 One with another; mutually, reciprocally; to one another (freq. in belong together). ME. "Together with" along with; in combination with; as well as; at the same time as. B prep. Along with, with the addition of, with. rare. MI6-MI7. C adj. composed, well-organized, self-assured; free of emotional difficulties or inhibitions. colloq. M20. New Yorker a young lady. . has got to be a very together person to survive. Blitz Lively, together . . people only need apply. It is apt to notice at this stage the circular No. Vidhi-1 (1) L-2(19992000) 118/trade tax dated 12th of April, 2000 wherein the Commissioner of Trade Tax after obtaining the opinion from the Law Department has opined that no tax is payable on the packing material, i.e., pouches and bottles of country liquor when the country liquor is exempted from tax. If the price of packing material (pouch) is charged separately, the pouch shall be taxed at the same rate at which the contents of the pouch are taxable. But if the contents of pouch are exempted from tra....
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....question in every case will be a question of fact as to what are nature of ingredients of sale. It is not right in law to pick on one ingredient only to the exclusion of the others and deduce from it the character of the transaction. Whether a transaction for sale of packing material is an independent transaction will depend upon several factors, some of them being: 1.. The packing material is a commodity having its own identity and is separately classified in the Schedule; 2.. There is no change, chemical or physical, in the packing either at the time of packing or at the time of using the content; 3.. The packing is capable of being reused after the contents have been consumed; 4.. The packing is used for convenience of transport and the quantity of the goods as such is not dependent on packing; 5.. The mere fact that the consideration for the packing is merged with the consideration for the product would not make the sale of packing an integrated part of the sale of the product. It was held that section 6 of the Andhra Pradesh General Sales Tax Act merely clarifies and explains that the components which have entered into determining the price of the goods cannot be ....
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....rovides that the packing material even if charged separately will be liable to be taxed at the same rate as its contents or at the rate applicable to the goods housed therein. The reason is not too far to seek. Section 3AB has been inserted to deal with the situations 2 and 3 as envisaged by the apex court in the case of Raj Sheel [1989] 74 STC 379; AIR 1989 SC 1996. So far as the question where packing material is also sold along with the goods, as the case hereunder is, there would be no difficulty in taxing the packing material as per the relevant notification. The difficulty arises only when the packing material is sold along with the goods and then it is to be necessarily found out as to whether there was an implied contract to sell the packing material. To meet such situation and to cut short the enquiry as to whether there was an implied contract to sell the packing material or not, section 3AB has been enacted. A question now arises with regard to the interpretation of section 3AB of the Trade Tax Act. The said section was inserted in the statute book by U.P. Act No. 28 of 1991. It came into force with effect from 1st of August, 1990. To understand the real import of the s....
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.... Act." Keeping the above enunciation of law which existed prior to insertion of section 3AB has been inserted with a view to done away to find out as to whether there has been implied contract or not to sell the packing material along with the goods contained therein. To provide a uniform policy, it has been provided that where the packing material has been sold together with its contents, the packing material would be exigible to tax at the same rate as the contents. The dictionary meaning of words "together with" also supports the above view. One of the meanings of word "together" is adding two or more amounts or things to each other in order to consider a total amount or effect. A transaction of sale which consists of sale of the products and a separate sale of the container housing the product with respective sale considerations for the products and the container separately. Item No. 1 as pointed out by the honourable R.S. Pathak, C.J. in Raj Sheel v. State of Andhra Pradesh [1989] 74 STC 379 (SC); AIR 1989 SC 1996 section 3AB of the Act will have no role to play in such cases, the product or the goods and the packing material will be exigible to trade tax as per rate applica....