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TMI Blog1970 (12) TMI 75X X X X Extracts X X X X X X X X Extracts X X X X ..... law is involved in both these cases, they are being dealt with together and disposed of by this common order. 2.. The petitioner holds a licence for maintaining a warehouse for country liquor. His work is to take liquor from the distillery, to bottle it and then to supply the bottles to the retail sellers. Under the licence he is bound to keep a certain amount of liquor ready in his warehouse so that supply to retail dealers may not fall short. By clause 9 of the licence his duty is to "bottle" the liquor in bottles of different descriptions mentioned in that clause. By clause 10, when these empty bottles are received and before they are filled, they are checked by the officer in charge of the warehouse. By clause 11, the petitioner has f ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... , etc. as packing material. The petitioner has also been imposed a penalty for not having paid the tax on the turnover. The petitioner filed an appeal which was heard by the Additional Appellate Assistant Commissioner of Sales Tax and was dismissed. Against these orders the present petitions have been filed. 3.. The first contention of the learned counsel for the petitioner is that the whole of the bottling process is done by the petitioner under the directions of the department according to the rules which are binding. He has no option in the matter and he cannot sell liquor to the retailers except after bottling it according to the rules. This activity, therefore, is in the nature of a works contract performed by the petitioner under the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... is packing material and he receives the consideration for it from the retail seller. There is, therefore, an implied contract of sale with regard to these articles, and reliance is placed upon Nimar Cotton Press Factory v. Commissioner of Sales Tax, Madhya Pradesh[1968] 21 S.T.C. 505. That was a case decided by this court where cotton bales, after they had been ginned and pressed were packed with hessian cloth and iron hoops. The contract was for ginning the cotton only. It was in those circumstances held that the hessian cloth and iron hoops which were used for packing and despatching the cotton were not a part of the contract and when these articles were handed over to the purchaser, there was necessarily a contract of sale. 5.. After he ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... is not possible to assume any intention of sale between the petitioner and the retail dealer. 7.. We are, therefore, of opinion that no sales tax was chargeable upon the packing material used in the process of bottling. Accordingly, we allow both these petitions and set aside the orders of assessment passed by the Sales Tax Officer and the orders of the Additional Appellate Assistant Commissioner of Sales Tax dismissing the petitioner's appeal against the orders of assessment. The assessment of sales tax having been set aside, the penalty also is set aside. The petitioner will get his costs of both these petitions from the respondents. Counsel's fee Rs. 100 in each case, if certified. The security for costs deposited by the petitioner in b ..... X X X X Extracts X X X X X X X X Extracts X X X X
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