TMI Blog1995 (2) TMI 371X X X X Extracts X X X X X X X X Extracts X X X X ..... under section 33 of the Act for the periods April 1, 1977 to March 31, 1978 and April 1, 1978 to March 31, 1979, by his orders of assessment dated November 30, 1980. In these assessments, the Sales Tax Officer did not levy any purchase tax under section 13 of the Act on the purchases of gunny bags made by the assessee from unregistered dealers. Subsequently, the Sales Tax Officer noticed that purchase tax was leviable under section 13 of the Act on the turnover of purchases of gunny bags made by the assessee from unregistered dealers during the above periods, which had escaped assessment. He, therefore, initiated proceedings for reassessment under section 35 of the Act by issuing notice in form 28. By the said notice the assessee was informed that purchase tax was proposed to be levied under section 13 of the Act on the purchases of gunny bags amounting to Rs. 86,375 and Rs. 1,78,284 made by the assessee from unregistered dealers during the periods April 1, 1977 to March 31, 1978 and April 1, 1978 to March 31, 1979, respectively. The assessee did not respond to the said notice. The Sales Tax Officer, therefore, reassessed the amount of tax due from the assessee in these periods an ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... intended to sell only empty bottles, the bargain was also for sale of empty bottles and gunny bags were used merely as a convenient and cheap vehicle of transport. The Tribunal arrived at a finding that the empty bottles could not be put in trucks or wagons without putting them in gunny bags and that the gunny bags were used by the assessee merely as a convenient mode of transport of bottles. The Tribunal observed that the cost of gunny bags, which were used as packing material, was also not significant, it being about 2 per cent of the value of the contents. Considering the totality of all these factors, the Tribunal came to the conclusion that it was not possible to infer an implied sale of gunny bags. The Tribunal, therefore, confirmed the levy of purchase tax on the purchase price of gunny bags under section 13 of the Act and dismissed the appeals of the assessee. Hence, this reference at the instance of the assessee. 3. We have heard the counsel for the parties. There is no dispute about any of the material facts or the law. The admitted position is that the contracts between the assessee and the breweries were contracts of sale of empty bottles only. There were no express ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ported by money consideration, and that as a result of the transaction property must actually pass in the goods. Unless all these elements are present, there can be no sale. The Supreme Court, however, held that the contract of sale may be express or implied. Dealing with the question whether such contract could be inferred in the case before it, the Supreme Court observed: "........The authority concerned should ask and answer the question whether the parties in the instant case, having regard to the circumstances of the case, intended to sell or buy the packing materials, or whether the subject-matter of the contracts of sale was only the cigarettes and that the packing materials did not form part of the bargain at all, but were used by the seller as a convenient and cheap vehicle of transport. He may also have to consider the question whether, when a trader in cigarettes sold cigarettes priced at a particular figure for a specified number and handed them over to a customer in a cheap cardboard container of insignificant value, he intended to sell the cardboard container and the customer intended to buy the same?" The Supreme Court, however, made it clear that it was no ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ion which can be taken only by the manufacturer or the seller, keeping in view the convenience of handling, carriage, preservation, etc., of the goods packed therein and the relative merits and demerits of the different types of packing materials. No contract of sale of packing material can, therefore, be inferred in the cases referred to above. 6. The only cases where sale of containers or packing material can be implied are the cases, where considering the extraordinary nature of the container used by the dealer, it can be said that one of the considerations in the mind of the purchaser could have been to get the special container by paying extra consideration for the product packed therein. Some of the cases falling in this category as indicated by the Supreme Court in Hyderabad Deccan Cigarette Factory [1966] 17 STC 624, are cigarettes sold in silver or gold caskets or scents and whisky sold in costly containers. Many more cases may be visualised which would fall in this category. One such instance may be of edible oil sold in costly stainless steel cans or containers which can be used in the kitchen as utensil. Another instance may be of packing foodgrains, pulses, etc., in ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s. Dhariwal Bottle Trading Co., 12/A, Arab Lane, Mistri Compound, Bombay-8. They have not charged any extra price for the gunny bags separately." The certificate from M/s. Skol Breweries Ltd. is in the following terms: "This is to certify that we have been purchasing empty beer bottles from M/s. Dhariwal Bottle Trading Co., from the start of this brewery. The contract is for purchase of beer bottles which are normally packed in gunny bags containing 72 bottles each. We have not paid for gunny bags separately and the contract price is inclusive of cost of gunny bags, loading charges, transport cost, etc." M/s. Hindustan Breweries and Bottling Ltd. issued a letter to the assessee wherein it confirmed that the order was only for purchase of empty bottles. It reads: "We hereby confirm that whenever we place an order with you for the purchase of empty beer bottles, the order is always inclusive of the cost of packing container and no separate price is payable to you towards gunny bags." 9. From purchase orders and the statements contained in the above certificates and letter, it is clear that the subject-matter of agreement of sale between the parties in the present case was ..... X X X X Extracts X X X X X X X X Extracts X X X X
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