R. JAYASIMHA BABU, J.

The turnover of bottles containing intravenous fluids (I.V. fluids), manufactured and marketed by the assessee, is included in the turnover relating to the fluids, by reason of section 3(7) of the Tamil Nadu General Sales Tax Act, 1959, which, inter alia, provides thus :

"........ where goods are sold or purchased together with the containers or packing materials the turnover of such goods shall include the price, cost or value of such containers or packing materials, and the packing charges, whether such price, cost or value or packing charges, are charged separately or not, and tax shall be levied thereon at the rate applicable to the goods contained or packed as if such containers or packing materials were the parts of the goods sold or purchased."

This provision thus deems the container to be part of the contents for the purpose of determination of the total turnover and provides for the levy of tax on the whole of such turnover at the rate at which the contents are to be subjected to tax.

The Supreme Court in the case of Premier Breweries v. State of Kerala, at page 608, held in relation to an identical provision in the Kerala General Sales Tax Act, being section 5(5) of that Act, thus :

"...... the packing materials as such are not being taxed under sub-section (5) of section 5 of the Act. The subject-matter of tax are the goods packed in the containers. In calculating the turnover of the goods, packing materials will have to be taken into account. The packing materials will be taxed at the same rate and at the same point as the goods contained in the packing materials. This is because the goods are sold packed in containers and are charged accordingly. This is the rule of computation of the turnover of the goods."

The bottles in which the I.V. fluid, manufactured by the assessee, is packed and sold are bottles which the assessee had purchased from unregistered dealers and, therefore, had not been subjected to tax at the time of such purchase. Had the dealers sold the bottles to the assessee as registered dealers they would have been liable to pay tax on the first sale of the bottles, which in turn would be recovered from the buyer. The bottles thus used by the assessee were bottles which on their first sale or purchase had not suffered tax, even though such goods were assessable to tax under the provisions of the State Act. The assessee was, therefore, confronted with a demand for payment of purchase tax on the ground that the assessee had used the bottles in or for the manufacture of the I.V. fluids and, therefore, section 7-A(1)(a) was attracted. The Tribunal having upheld that demand, the correctness of the Tribunal's decision is under challenge before us.

Mr. C. Natarajan, learned Senior Counsel appearing for the assessee contended that section 7-A, as held by the Supreme Court in the case of State of Tamil Nadu v. M. K. Kandaswami, was itself a charging section; that it creates a liability against a dealer on his purchase turnover with regard to goods the sale or purchase of which though generally liable to tax under the Act, have not due to circumstances of particular sale, suffered tax under section 3, 4 or 5 and which after the purchase have been dealt with by him in any of the modes indicated in clauses (a), (b) and (c) of section 7-A(1). Learned counsel submitted that if the goods dealt with by the dealer had suffered tax on their sale or purchase prior to the dealer using those goods, or if those goods are subsequently sold by the dealer such goods cannot be subjected to purchase tax under section 7-A.Learned counsel in this context also referred to the decision of the Constitution Bench of the apex Court in the case of Assistant Commissioner (Intelligence) v. Nandanam Construction Company. Learned counsel submitted relying on what is stated at para 10 of the judgment that if the goods in respect of which purchase tax is sought to be recovered continued to be available of sale or