JAGANMOHAN REDDY, J.

This is a petition under Articles 226 and 227 of the Constitution directed against the order of the Commissioner of Sales Tax dated 15th May, 1954, whereby the petitioner was assessed for the years 1950-51, 1951-52, 1952-53 and 1953-54 to sale tax on (a) gunny bags containing sugar, (b) gunny bags containing grain, and (c) stream sold to the Government Alcohol Factory at Bodhan. The petitioner is a limited company manufacturing sugar at Shakkarnagar (Bodhan) and during the course of its business of manufacturing sugar and molasses, it sells the former commodity in gunny bags with an inclusive price fixed from time to time. It is further alleged in the petition that the factory supplied steam in the assessment years through pipes to the Government Alcohol Factory at Bodhan collecting only manufacturing charges without making any profit on this service.

The Sales Tax Officer by his order dated 2nd November, 1953, assessed the petitioner for 1952-53 and 1953-54 on 2963 gunny bags of the grain shop at Rs. 1-4-0 per bag and on 92,095 gunny bags containing sugar at Rs. 1-10-6 per bag making a total of Rs. 1,86,146-3-6 for the period 1st April, 1952, to 31st July, 1952, when sugar was exempt from sales tax. For the period 1st August, 1952, to 31st of March, 1953, sales tax was leviable on sugar also and therefore the only items taxed which are disputed are steam and empty gunny bags of the grain shop, grain being exempt during that period. It may be pointed out that in the aforesaid order the Sales Tax Officer specifically computed the cost of sugar for the period 1st April, 1952, to 31st July, 1952, by deducting the cost of bags from the cost of sugar sold in bags and thus arrived at the net turnover of actual sugar exempted from sales tax. Similarly, the actual turnover of molasses and grain which were also exempted for that period was computed. In so far as the assessment for 1953-54 is concerned, there was no exemption either on sugar or on molasses; the only disputable item is that of steam valued at Rs. 83,417-2-0.

It may be observed that the Sales Tax Officer, after making the assessments for 1952-53 and 1953-54, re-opened assessments already made for 1950-51 and 1951-52 in accordance with the procedure prescribed under rule 33 of the Sales Tax Rules made under section 26F of the Hyderabad General Sales Tax Act and assessed the petitioner for 1950-51 on Rs. 49,565 being the cost of steam, on Rs. 23,710 being the cost of 18,968 empty gunny bags of grain shop at Rs. 1-4-0 per bag, on Rs. 3,81,819-14-9 for 1,89,775 empty sugar bags at Rs. 2-5-3 per bag and for 1951-52 on Rs. 68,971-4-0 for steam, on Rs. 23,360 for 18,688 bags of grain shop at Rs. 1-4-0 per bag and on Rs. 5,53,425-10-6 for 2,00,106 empty gunny bags of sugar at Rs. 2-12-3.

The assessee raised several contentions before the Sales Tax Officer relating to the aforesaid assessments and re-assessments which appear from his order of 2nd November, 1953, and that of 12th November, 1953, respectively. The several contentions raised before the Sales Tax Officer were that as the empty gunny bags of the grain shop were only used for refilling, no tax can be levied, that as sale is defined under the Act as the aggregate amount for which the goods are bought or sold, the bags which formed part of the transaction of sale of sugar cannot be said to be transferred and the transfer of property in the goods is both that of sugar and the bags, that he is not a dealer in gunny bags and that steam which is a derivative of coal is exempt from tax by reason of coal being exempt from tax.

These several contentions were rejected by the Sales Tax Officer who held that sugar and bags are two distinct entities and that when a dealer sells sugar in bags, there was transfer of property in each of them separately; that it was immaterial whether the dealer makes a profit or loss in a transaction as the tax is on turnover and the only consideration that can be taken in