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TMI Blog1967 (4) TMI 174X X X X Extracts X X X X X X X X Extracts X X X X ..... udgment of the High Court of Judicature at Allahabad in Sales Tax Reference No. 267 of 1954. The Judge (Revisions) Sales Tax, U.P. had referred the following question under section 11 of the U.P. Sales Tax Act, 1948, hereinafter referred to as the Act: "Whether on the facts proved in this case the turnover in dispute can be held to be the turnover of confectionery sold in sealed containers." In order to appreciate the point arising in the case it is necessary to give a few facts. M/s. G.G. Industries, Belanganj, Agra, hereinafter referred to as the assessee, is a firm which carries on, inter alia, the business of manufacture and sale of confectionery such as chocolates, lollipops, lemon- drops etc. For the assessment year 1949-50, the Sal ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r for his examination. He observed: "The packet is wrapped in a cover of cellophane paper and label of the manufacturer is pasted on one side of it and not at the ends. The packet is closely sealed and the contents cannot be taken out unless the covering paper is torn and removed." He held: "If the packets were securely closed and gave an appearance of a sealed container they should not be taken out of that category merely because the label was pasted a little below the ends on one side.....In my mind the closing of the ends of a packet securely by paste or gum does amount to sealing the packet though no stamp of any kind may be affixed on it." Regarding lemon drops he held that they were sold in bags of cellophane paper which were not ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... use (2) reads thus: "2. Dealers in cooked food (other than cooked food sold in sealed containers), including sweetmeats and other confectionery on payment of a fee at the rate of four annas per Rs. 100 of the turnover, subject to a maximum of Rs. 500," Section 4 of the Act reads as under: "4. Exemption from tax.-(1) No tax shall be payable on- (a) the sale of water, milk, salt, newspapers and motor spirit as defined in the U.P. Sale of Motor Spirit (Taxation) Act, 1939, and of any other goods which the State Government may by notification in the official Gazette, exempt. (b) the sale of any goods by the All-India Spinners' Association or Gandhi Ashram, Meerut, and their branches or such other persons or class of persons as the State Go ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... done neither the retailer nor the purchaser would be sure whether the goods inside the container as to their quality and quantity are the same as represented and have not been otherwise adulterated or mixed up by extraneous elements. It is hardly necessary to mention that a dealer carrying on the business of selling sweetmeats and confectionery on a comparatively smaller scale would find it uneconomical commercially to put the stuff sold or to be sold in sealed containers; it is only a large scale manufacturer who manufacturers and exports the confectionery, who would need sealing the same in a container. In our opinion, therefore, it is only that class of dealers carrying on the business of sale of confectionery in sealed containers as ex ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... distinguish between sale in sealed tins and sale in sealed cardboxes. Once this conclusion is reached, it may be asked: how does one ordinarily seal a cardbox. Ordinarily the cardbox is wrapped in paper or other covering, cellophane paper is sometimes added and then labels pasted. Ordinarily no seal of wax is applied. We have already reproduced the description of the packet produced as a sample before the Judge (Appeals), Sales Tax. It seems to us that this packet would fall within the expression "sealed container" occurring in the notification. It may be, as observed by the High Court, that the idea underlying the notification was to benefit small dealers, but with respect, small dealers may also sell confectionery in sealed containers. It ..... X X X X Extracts X X X X X X X X Extracts X X X X
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