( 1 ) THIS revision petition is preferred by the State against the order of the karnataka Appellate Tribunal, which upheld the contention of the assessee that the bottles and crates in which liquor had been sold by it could not be made liable to pay sales tax at the rate applicable to liquor under Item-38 of the Second Schedule of the karnataka Sales Tax Act. 1957 (hereinafter referred to as 'the Act the Tribunal held that there was a separate agreement in regard to the sale of bottles and crates and, therefore, value of glass bottles would have to be subjected to tax under Item-109 of the Second Schedule to the Karnataka Sales Tax Act and as far as the crates were concerned which were of wooden material they would be liable to tax under S. 5 (1) of the act. As the exact figures had not been ascertained by the assessing authority it remanded the matter to him to determine the values of these items separately and charge tax accordingly.

( 2 ) IN this revision petition it is contended that this view taken by the Tribunal is erroneous and the action of the authorities to levy tax at 25 per cent under item-38 of the second Schedule in regard to the containers also should have been upheld.

( 3 ) THE first appellate authority was categorical in his order that there was an agreeement for separately charging for the bottles and crates and the price varied according to the size of the container. There was no dispute about this fact before the Tribunal and in fact the Tribunal held that there was such an agreement. It found that "the appellant, has shown separately the price of liquors and that of the packing materials. The cost of the packing materials is seen to vary from 8 per cent to 12 per cent depending on the size of the bottles used. The observations of the first appellate authority were to the following effect, under heading salient features; (4 ). . . . As per the price list which has been shown as an exhibit before the appellate authority it is seen that there is an implied and explicit contract of sales of liquors as well as the containers to the customers; that means the price of the liquor is separately fixed including the value of the battles etc and the value of the bottles is recovered from the purchasers in addition to the sale value of liquors. The price list is a consolidated one. And again under Item-6 it was observed "further it has been established that there was a clear agreement of sale between the appellant and its customers in respect of liquors coupled with packing materials. This means to say that the packing materials form the subject matter of agreement of sale between the appellant and the customers. . . The Tribunal further noticed that item-38 of the second Schedule only mentioned liquor other than country liquor and did not specify that it should be sold in any sealed container. Item-98 of the second Schedule makes provision for tinned, canned and bottled foods, and fruits including foods and fruits packed in sealed containers. There was thus a distinction in regard to the articles chosen for tax at particular rates. Item-109 of the Second Schedule makes provision for taking glass wares and glass bottles. There was no specific rule in relation to wooden crates and, therefore, would come within the ambit of S. 5 (1) of the Act. The reasoning of the Tribunal was that when there was agreement for charging separately for the containers and the schedule to the Act also specified different items mentioning different rates, the rates that are applicable to each one of the items should be considered and not only one of the rates which might be higher in regard to one of the items. It also referred to the decision of the madras High Court in K. Natarajan and Sons v. The State of T. N. 39 STC 443 wherein the question about the rate applicable inregard to tins in which kerosene had been sold was considered. The tins had been subjected to a separate charge of sales tax at a rate lower than applicable to kerosene.

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