TaxTMI 
TaxTMI 
TaxTMI 
2010 (3) TMI 1018
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....the assessment, the assessing authority held that there was contravention of form No. 14, therefore, purchase tax was leviable under section 14 of the BST Act, 1959. Accordingly, assessment was done vide the assessment order dated March 31, 1992. Being aggrieved by the above assessment order dated March 31, 1992 passed by the Sales Tax Officer, Kalyan for the period January 1, 1988 to March 31, 1989, the respondents had preferred an appeal on May 7, 1992 under section 55(6)(a) and (b) of the BST Act, 1959 before the Assistant Commissioner of Sales Tax, Kalyan without any success. The said appeal came to be dismissed by the Assistant Commissioner of Sales Tax vide its order dated March 17, 1994. Against the aforesaid order dated March 17, 1994, the respondents preferred Second Appeal No. 457 of 1994 before the Maharashtra Sales Tax Tribunal, Mumbai. In the said second appeal, the respondents contended that the respondents made purchases of packing materials, namely, plastic drums and plastic bags on form No. 14 and used the same in packing the chemicals manufactured, supplied and exported by them. The said packing material along with packed chemical were also exported out of India....
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....e is no contravention of recitals of declaration in form 14 as there was an implied sale of the packing material namely, plastic drums and plastic bags, by the appellant to his vendees?" It is obvious from the above questions that the controversy involved in this reference is in narrow compass and determination of the same depends on construction of section 15A of the BST Act, 1959. For the relevant period, i.e., July 1, 1981 to March 31, 1989, section 15A of the BST Act, 1959 reads thus: "15A. Rate of tax on packing materials.-Where any goods are sold or purchased and such goods are packed in any materials, the tax shall be leviable on the sales or purchases of such packing materials (whether such materials are separately charged for or not) at the same rate of tax (if any) as is applicable to the sales or purchases, as the case may be, of the goods themselves." Though the respondents were duly served, however, they failed to file their appearance in the present matter. Therefore, this court appointed Mr. C. B. Thakar as amicus curiae. Mr. Sonpal, learned A panel counsel appearing for the applicant, submitted that the Tribunal erred in coming to the conclusion that the ....
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....itted that when packing material is an independent commodity and the packing material as well as the contents are sold independently, the packing material is liable to be taxed on its own footings. Mr. Sonpal further submitted that in the present case the respondents failed to disclose any invoice, bill of entry or any other document to show that they have also sold the packing material along with chemicals. He submitted that it is crystal clear from the documents produced by the respondents on record that the respondents sold the chemicals without disclosing the value of packing material and therefore, the respondents are liable to pay the purchase tax under section 14 of the BST Act, 1959 for contravention of the terms and conditions of form No. 14. Mr. Sonpal further submitted that plain reading of section 15A clearly shows that the sales tax is leviable on the sale or purchase of packing material. In the present case since the respondents failed to disclose the value of packing material in the invoices, they are liable to pay purchase tax. He further submitted that there was no implied sale of packing material, namely, plastic bags and plastic drums. Therefore, there was viol....
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.... container. (iii) The product may be sold with the transfer of the container without any consideration thereof. (iv) The buyer may agree to give deposit with the seller who may forfeit the deposit upon his not returning the container within the agreed period. (v) The seller may pay an agreed amount on return of the container and treat the transaction of resale of packing material. 2.. The statutory Act may provide expressly either by definition of 'sale' or 'turnover' to include the cost of packing material like section 6C of the Andhra Pradesh sales tax law referred to above, or 3.. By a separate provision the statute may provide for a deemed sale of packing material along with the goods. The transaction of sale of packing material along with the goods. In such case the transaction of sale of packing material along with the goods can be inferred. 4.. There may be separate or independent sale of packing material which can be inferred from the intention of the parties or from the terms of the agreement. 5.. Whether there was an agreement to sell packing material independently or not is always a pure question of fact and it cannot be decided on fiction or surmi....
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....ence as regards implied sale: 1.. There is sufficient material on record to show that the company has traded in packing material as a separate trading activity as revealed from: (i) Registration certificate; (ii) Trial balance showing separate account for sale of packing material and for sale of cement. (iii) One of the object of the company as reflected vide subclause (3) of clause 3 in memorandum of association. (iv) Packing monthly price circulars issued by the head. 2.. In the sale bills issued packing charges are separately shown. 3.. Prices of HDPE bags and cement are separately fixed depending upon demand and supply position during particular period and the competitors' price in the region. 4.. Type of packing material is used for which the stockists/ purchasers have preference, particularly in respect of Municipality, Semi Government when the orders are placed, the description of the packing material in which cement should be supplied is specifically mentioned. 5.. The percentage of cost of packing with the sale price is about 11 per cent. 6.. The sale price of cement is increased or reduced, the price of packing material remain constant. 7.. The packing mate....
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....even for packing the cement is quite possible and probable in greater degree. In this context, reliance has been placed by Shri Ghanekar, learned sales tax practitioner for the appellant, on unreported judgment of the Appellate Tribunal of Andhra Pradesh in the case of Priyadarshini Cements Ltd., Hyderabad v. State of Andhra Pradesh (T. A. No. 144 of 1995 dated September 29, 1995) which has been confirmed by the Supreme Court. Shri Samlo, learned advocate for the Revenue, relying on decision in the case of Kunhayammed v. State of Kerala [2000] 119 STC 505 (SC); [2000] 6 SCC 359 urged that dismissing the special leave petition assigning without any reason is not a declaration of law by the Supreme Court under article 141 of the Constitution. Shri Ghanekar, learned sales tax practitioner for the appellant, has also fairly conceded the said position but has rightly contended that such decision which has been confirmed up to the Supreme Court certainly carries weight for pursuing the point involved in such decision. Shri Samlo, learned advocate for the Revenue, while disputing the possibility of reuse of the bags has heavily placed reliance on the decision in the case of the appellant ....
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.... have to be taken into consideration for the purpose of arriving at the total turnover, but even for that purpose there has to be an element of ad idem of mind between the purchaser and seller. If by reason of express contract or implied contract, the containers are found to be sold then indisputably the same would be eligible to tax. On the abovementioned submissions, the learned counsel for the applicant submitted that the Tribunal failed to consider and rely on the judgment in the matter of Dhariwal Bottle Trading Company [1995] 99 STC 326 (Bom) at the time of deciding the appeal. On the other hand, Mr. Thakar, amicus curiae on behalf of the respondents, submitted that in the present case the Tribunal has rightly relied on the judgment in the matter of Raj Sheel [1989] 74 STC 379 (SC) and rightly held that the respondents were not liable to pay the sales tax on the packing material as there was implied sale of the packing material along with chemicals. He further submitted that in Raj Sheel's case [1989] 74 STC 379 (SC) it is observed that the transaction for sale of packing material is an independent transaction which will depend on several factors like (a) the packing ma....
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.... Paragraph 7 of the Tribunal's judgment reads thus: "7. At the outset, I may observe that the aforesaid tests are aptly satisfied in the present case. The packing material, namely, plastic drums and plastic bags are commodities having their own identity. These commodities are separately classified in Schedule amended to the Act. While using this packing material in the packing of chemicals, there is no change, chemical or physical, either at the time of packing or at the time of using the contents therein, namely, chemical. It would also appear that this packing material is capable of being reused after the chemicals have been consumed. The said packing material has been used by the appellant-dealer for convenience of transport and the quantity of transported goods was not dependent on the packing." It is to be noted that in the matter of Dhariwal Bottle Trading Company [1995] 99 STC 326, this court held that an implied sale can be inferred only where the container is of such an exceptional type and of unusually high value which, in the ordinary course of business, is not used for packing the goods in question. In the present case, the respondents exported the chemicals out ....