TMI Blog1971 (8) TMI 200X X X X Extracts X X X X X X X X Extracts X X X X ..... of cloth bales, and the packing material was liable to tax under the State Act as well as under the Central Act?" "(2) Whether, on facts and circumstances of the case, the Tribunal was correct in holding that coal ash sold by the applicant was not coal for purposes of entry No. 2, Part II of the State Act but should be treated as residuary article for purposes of tax?" Miscellaneous Civil Case No. 198 of 1970 relates to assessment of sales tax payable under the Madhya Pradesh General Sales Tax Act, 1958, for the period 1st January, 1960, to 31st December, 1960; Miscellaneous Civil Case No. 199 of 1970 relates to assessment of sales tax payable under the Central Sales Tax Act, for the period 1st January, 1961, to 31st December, 1961; an ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... al for a price to be paid by the customers. In the instant case, it is not disputed that there was no express agreement for the sale of packing material and no price was separately charged for its sale. However, as the property in the packing material was transferred to the customers, the taxing authorities came to the conclusion that an implied agreement for the sale of the packing material must be inferred. The error in this reasoning lay in the omission to notice and consider the other alternative that the packing material was used by the dealer as a convenient and cheap vehicle of transporting the goods to the customers without charging any price for it. It was also not taken into account that the burden to prove that there was an impli ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... arties did not intend to sell and buy the container also. Many cases may be visualized where the container is comparatively of high value and sometimes even higher than that contained in it. Scent or whisky may be sold in costly containers. Even cigarettes may be sold in silver or gold caskets. It may be that in such cases the agreement to pay an extra price for the container may be more readily implied ....." "Whether there was an agreement to sell the packing materials is a pure question of fact and that question cannot be decided on fictions or surmises. That is what has happened in this case. The Commercial Tax Officer invoked a fiction; the Assistant Commissioner of Commercial Taxes relied upon the doctrine of 'finished product'; the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... implied sale of the packing material liable to tax. On the material on record and on the facts found by the Tribunal, it cannot be held that the department succeeded in discharging that burden. Reference in this connection may be made to Shamsuddin Akbar Khan and Co. v. State of Orissa[1970] 26 S.T.C. 280., where the Orissa High Court took similar view in relation to the containers used for transporting tax-free gudaku. Similar view was expressed by the Allahabad High Court in Burhwal Sugar Mills Co. Ltd. v. Sales Tax Officer[1969] 23 S.T.C. 241., where the question related to gunny bags in which sugar was sold. 7.. Learned counsel for the department relied upon Nimar Cotton Press v. Sales Tax Officer[1961] 12 S.T.C. 313; A.I.R. 1961 M.P ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ms"the answer is covered by a recent decision of a Division Bench of this court in Commissioner of Sales Tax, M.P. v. Samrathmal DhoolchandMiscellaneous Civil Case No. 253 of 1967, decided on 23-12-1969; printed at page 418 infra. This case decided that coal ash was included within the entry of coal. 11.. For the aforesaid reasons, we answer both the questions in the negative. Reference answered in the negative. Appendix [The judgment of the Madhya Pradesh High Court in Commissioner of Sales Tax, M.P. v. Samrathmal Dhoolchand (Miscellaneous Civil Case No. 253 of 1967) delivered on 23rd December, 1969, by a Division Bench consisting of K.L. PANDEY and SHIV DAYAL, JJ., is printed below: ] COMMISSIONER OF SALES TAX, M.P. v. SAMRATHMAL ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... said Part III of Schedule II and observed: "The result emerging from these decisions is that while construing the word 'coal' in entry 1 of Part III of Schedule II the test that would be applied is what would be the meaning which persons dealing with coal and consumers purchasing it as fuel would give to that word. A sales tax statute, being one levying a tax on goods, must, in the absence of a technical term or a term of science or art, be presumed to have used an ordinary term as coal according to the meaning ascribed to it in common parlance. Viewed from that angle both a merchant dealing in coal and a consumer wanting to purchase it would regard coal not in its geological sense but in the sense as ordinarily understood and would inclu ..... X X X X Extracts X X X X X X X X Extracts X X X X
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