TMI Blog1997 (12) TMI 569X X X X Extracts X X X X X X X X Extracts X X X X ..... provides that the rate of tax and point of levy applicable to the containers shall be the same as those applicable to the goods sold. Therefore, even if the cartons have already been subjected to tax by virtue of specific provisions of section 5(5) they will be liable to tax at the same point and at the same rate as the goods contained therein.In calculating the turnover of the goods, packing materials will have to be taken into account. The packing materials will be taxed at the same rate and at the same point as the goods contained in the packing material. - Civil Appeal No. 4870-4874 of 1991, - - - Dated:- 18-12-1997 - VERMA J.S., BHARUCHA S.P. AND SUHAS CHANDRA SEN JJ. Civil Appeal No. 232 of 1992, Civil Appeal No. 6683, Civil Appeal No. 6684, Civil Appeal No. 6685 of 1995, Civil Appeal No. 6732, Civil Appeal No. 6733, Civil Appeal No. 6734, Civil Appeal No. 6735, Civil Appeal No. 6736 of 1995, S.L.P. (Civil) Nos. 6063, S.L.P. (Civil) Nos. 6064, S.L.P. (Civil) Nos. 6065 of 1991, Sunil Gupta and Mrs. A.K. Verama, Advocates (of J.B. Dadachanji Co., Advocates), for the appellant in C.A. Nos. 4870 to 4874 of 1991 and 232 of 1992. ------------------------------- ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... f 8 per cent on the containers. It was not open to the assessing authority to include the value of the containers in the value of the liquor for the purpose of calculating the assessee s turnover. Secondly, it has been contended that the cardboard cartons, in any event, are secondary containers provided for protection of the bottles in which the liquor was sold. The bottles were the primary containers of beer. The cartons were provided to ensure that the beer bottles were not broken in transit. Therefore, the turnover of the cartons could not in any way be included in the turnover of the beer sold by the appellant. Lastly, a point was taken that under the Kerala General Sales Tax Act, a single point duty is leviable on the cardboard cartons. This duty has already been paid on these cartons by the manufacturers. Further levy on these cartons at the point of item when beer was sold will be contrary to law. A large number of decisions were cited on behalf of the appellant as well as the respondents in support of their contentions. 5.. Before examining the decisions, it will be useful to refer to the relevant provisions of the Kerala General Sales Tax Act. Tax on sale or purchase of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... is that when the goods are exempted from tax, no tax is leviable on the containers. This will be the position even when the goods and the containers are sold and charged separately. 8.. Various rates of tax have been fixed by the Act for sale or purchase of various types of goods. If the goods are sold in packages or containers then for the purpose of imposition of tax, the turnover of goods will have to be calculated by including therein the turnover of the packages or the containers. The rate of tax applicable to the turnover so calculated will be the rate payable on the goods contained in the containers. It follows that if bottled beer is sold in containers, the tax payable on beer will be the appropriate rate of tax payable on the turnover calculated in the manner stated hereinabove. It has not been found by any of the authorities who heard the case that the cartons were specially provided for protection of the bottles and bottled beer usually was not delivered in cartons even in cases of bulk sales. The argument based on secondary packing is misconceived. 9.. On behalf of the appellants, it has been contended that sub-sections (5) and (6) of section 5 are based upon an in ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... what may yet be a third case, it may consist of a sale of the product with the transfer of the container without any sale consideration therefor. Dealing with the deeming provision of section 6-C, Pathak, C.J. observed: Turning to section 6-C of the Act, it seems to envisage a case where it is the goods which are sold and there is no actual sale of the packing material. The section provides by legal fiction that the packing material shall be deemed to have been sold along with the goods. In other words, although there is no sale of the packing material, it will be deemed that there is such a sale. In that event, the section declares, the tax will be leviable on such deemed sale of the packing material at the rate of tax applicable to the sale of the goods themselves. It is difficult to comprehend the need for such a provision. It can at best be regarded as a provision by way of clarification of an existing legal situation. Pathak, C.J., ultimately concluded: We find it difficult to accept the contention of the appellants that a rate applicable to the packing material in the Schedule should be applied to the sale of such packing material in a case under section 6-C, when in ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ng materials may not be taxed along with the goods contained or packed without further investigations into the facts to decide whether the two transactions were really one integrated transaction. 17.. This difficulty arising out of the restricted meaning given to the deeming clause in section 6-C of the Andhra Act has been obviated by specific provisions of section 5(5) of the Kerala Act by providing that the turnover of the goods will include the turnover in respect of the packing materials or the containers. The containers or the packing materials will be taxed at the same point and at the same rate at which the goods are to be taxed. This rule will apply whether the price of the containers or the packing materials is charged separately or not . Therefore, even in a case where the containers are separately sold, the turnover of the goods will include the turnover of the containers and the appropriate rate of tax on such turnover will be the rate of tax payable on the goods. 18.. Mr. Gupta next drew our attention to the case of Vasavadatta Cements v. State of Karnataka [1996] 101 STC 168 (SC); (1996) 2 SCC 88, where another Bench of this Court has followed the principle laid ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... in the containers were exempt from tax, then no tax can be levied on the containers under sub-section (3-D) of section 5 of the Karnataka Act. Section 6-C of the Andhra Act does not contain any such specific provisions. 20.. Mr. Gupta contended that in spite of these specific provisions of the Karnataka Act, this Court had no difficulty in Vasavadatta s case [1996] 101 STC 168; (1996) 2 SCC 88 in applying the principles laid down by Pathak, C.J., in the case of Raj Sheel [1989] 74 STC 379. Therefore, this present case, which is to be decided on similar provisions of the Kerala Act, must be decided on the same basis. We are of the view that in Vasavadatta s case [1996] 101 STC 168; (1996) 2 SCC 88 this Court overlooked the marked dissimilarity between section 6-C of the Andhra Act and section 5(3-D) of the Karnataka Sales Tax Act. We are also of the view that sub-sections (5) and (6) of the Kerala General Sales Tax Act will have to be construed uninfluenced by the decision of this Court in Raj Sheel s case [1989] 74 STC 379 where Pathak, C.J., construed the deeming provisions in section 6-C of the Andhra Act in a narrow sense. Section 6-C did not contain any specific provisions ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... arately in the bills raised by the seller. 22.. We shall now deal with another point urged on behalf of the appellant. It has been contended that the cardboard cartons have already borne tax under the entry paper, other than the newsprint, cardboard and their products in the First Schedule of the Act. It is a single point tax. The cardboard cartons cannot be taxed once again when sold along with the beer. 23.. There are two answers to this contention. Sub-section (5) of section 5 specifically provides that the rate of tax and point of levy applicable to the containers shall be the same as those applicable to the goods sold. Therefore, even if the cartons have already been subjected to tax by virtue of specific provisions of section 5(5) they will be liable to tax at the same point and at the same rate as the goods contained therein. 24.. Moreover, the packing materials as such are not being taxed under sub-section (5) of section 5 of the Act. The subject-matter of tax are the goods packed in the containers. In calculating the turnover of the goods, packing materials will have to be taken into account. The packing materials will be taxed at the same rate and at the same poin ..... X X X X Extracts X X X X X X X X Extracts X X X X
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