TMI Blog1998 (1) TMI 500X X X X Extracts X X X X X X X X Extracts X X X X ..... gunny bags (packing material) in which the sugar manufactured by the petitioner was sold has been assessed to tax. The assessment orders are assailed on diverse grounds. The case of the petitioner is that sugar was exempt from payment of sales tax and it was a declared commodity under the provisions of the Additional Duties of Excise (Goods of Special Importance) Act, 1957. The additional excise duty is levied and collected, according to the rates specified in the Schedule. Further no quantity of sugar can be sold without obtaining a release order from the Directorate of Sugar, Ministry of Food and Civil Supplies, Government of India and the price of levy sugar is fixed by the Central Government by means of Sugar Price Determination Order ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... to the contrary taken by the assessing authority was patently illegal and, therefore, bad in law. Yet another contention of the petitioner was that at no time the sugar is kept loose and it is always packed in gunny bags before it is stored or is offered for sale, otherwise quality, grade and colour deteriorates. It is always sold in packed condition, and there was no contract either express or implied for the sale of gunny bags, when the petitioner sold the sugar manufactured by it. 4.. The respondents have filed their counter-affidavit at the admission stage, and the rejection of the writ petition is sought both on merits as well on the ground that the writ petition was not maintainable inasmuch as, the petitioner has an effective sta ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... The case taken up by the assessee was that packing materials were not liable to tax. The Supreme Court in deciding the issue held as under: In order to constitute a sale it was necessary that there should be an agreement between the parties for the purpose of transferring title to goods, that it should be supported by money consideration and that as a result of the transaction property should actually pass in the goods. Unless all these elements are present there could be no sale. What the sales tax authorities had to do was to ask and answer the question whether the parties, having regard to the circumstances of the case, intended to sell or buy the packing materials or whether the subjectmatter of the contracts of sale was only cigare ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ner but both sales being conceived of as integrated components of a single sale transaction ; or, 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. The question in every case will be a question of fact as to what are the nature and ingredients of the sale. It is not right in law to pick on one ingredient only to the exclusion of the others and deduce from it the character of the transaction. For example, the circumstance that the price of the product and the price of the container are shown separately may be evidence that two separate transactions are envisaged, but that circumstance alone cannot be conclusive of the true character of the transac ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... press or implied. Everything depends upon the facts and circumstances of each case. It is not possible to lay down any fixed formula or a proposition of law that whenever particular goods are sold in packing materials, the parties did not intend to sell and buy the packing materials also. 9.. For the decision of the question canvassed on behalf of the petitioner, namely, whether the value of the gunny bags was taxable or not, one will have to go through several facts which may include terms and conditions of the agreement, if any. The assessing authority in the impugned assessment orders have recorded a categorical finding that there was an implied agreement for the sale of gunny bags and the petitioner has charged a composite price in th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... troversy requires factual investigation into the nature and ingredient of the transaction. Certainly this exercise cannot be conveniently carried out in these proceedings under article 226 of the Constitution of India nor the controversy can be decided on the basis of the affidavits alone exchanged between the parties which may require other evidence and material also. 11.. The grounds on which the impugned assessment orders are assailed in this writ petition and/or such other grounds as the petitioner may like to take can all be dealt with effectively by the appellate or other authorities constituted under the Act, and the petitioner can ventilate its grievances and substantiate its case before the said authorities. The remedy provided u ..... X X X X Extracts X X X X X X X X Extracts X X X X
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