The expression "sealed containers" in the notification meant a container which is "so closed that access (to the contents) is impossible without breaking the fastening".

Judgment

SIKRI. J.

( 1 ) THESE two appeals raise a common question and can be conveniently disposed of together. Civil Appeal No. 1397 of 1966, by special leave, is directed against the judgment 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 II 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, lemondrops etc. For the assessment year 1949-50, the Sales Tax Officer overruled the contention of the assessee that sales of confectionery were exempt on payment of fee at the rate of annas four per Rs. 100. 00 as cooked food for which an exemption had been obtained by payment of the maximum fee of Rs. 500. 00. He held :

( 2 ) "this confectionery is sold in packings of tin and cardboard which are closed by the use of cellophane paper to protect the contents from being affected by atmospheric conditions. The pieces of confectionery, in most of the cases, bear mark of the firm engraved on it. It was contended by the firm that merely wrapping the cardboard packages by paper does not make them sealed containers. The idea behind putting a seal on the coverings, to my mind, is that a protection shall be afforded from adulteration by dealers at subsequent stages. It is to ensure that only the goods manufactured by the assessees reach the customer as their produce. No adulteration is made in between by the middlemen. This aim is fully met when the pieces of confectionery bear the seal of the firm engraved on each item and they are packed in packages of cardboard or tin covered by cellophane paper. All this practically amounts to sealed containers. . . " The assessee appealed to the Judge (Appeals) Sales Tax who rejected the contention of the assessee that confectionery was not sold by them in sealed containers. The assessees representative produced before him lollipops in a closed packet of cardboard and lemondrops contained in a bag of cellophane paper 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 lemondrops he held that they were sold in bags of cellophane paper which were not sealed containers, but as no separate accounts were available he thought it proper to treat the sale of the entire confectionery as sale in sealed containers.

( 3 ) THE assessee then filed a revision. The Judge (Revisions), Sales, Tax, dismissed the revision. He held : "the intention of the Legislature was that it was enough if the container was sealed with label. The container may also be of any kind. In the present case the confectionery was packed in a container of cardboard. The packets were securely closed and the contents could not be taken out unless the container was torn. Having regard to the conditions of the packets I am still of the same opinion which I took previously that the confectionery was sold in sealed containers. The expression sealed container should not be give