The sale value of containers in which petroleum products were sold was not taxable under rule 6(cc)(ii) of the Tamil Nadu General Sales Tax Rules, 1959, which provides an exemption for the sale turnover of packing materials in respect of goods not liable to tax at the hands of the assessee.

The assessee, M/s. Universal Agencies, is a dealer in petroleum products. The assessee was originally assessed on a taxable turnover of Rs. 23, 61, 797.30 and Rs. 1, 26, 582.80 respectively for the assessment year 1978-79. Subsequently the assessing officer found that the assessee had purchased packing materials to an extent of Rs. 1, 05, 812.82 in the year. The petroleum products were sold for Rs. 22, 24, 579. Since it is second sales, the sale turnover of the petroleum products is not taxable in the hands of the assessee. The assessing officer considered that since the sale value included the value of the packing material, the sale turnover of the containers is liable to tax. The assessing officer estimated the value of the packing material at Rs. 1 lakh and disallowed the exemption on this turnover and assessed it at 4 per cent. This was confirmed by the Appellate Assistant Commissioner on appeal. Aggrieved, the assessee filed second appeal before the Tribunal. The Tribunal also relying upon various decisions, confirmed the order passed by the Appellate Assistant Commissioner. It is against that order, the present revision has been preferred by the assessee.

2. Learned counsel appearing for the assessee submitted that in view of the provisions contained in rule 6(cc)(ii) of the Tamil Nadu General Sales Tax Rules irrespective of the fact whether the sale price of the container is stated separately in the bills or included in the total sale price of the petroleum products, the assessee is entitled to exemption of the sale turnover of the container. According to the learned counsel for the assessee, the decision reported in 1982 (51) STC 171 (Mad.) [Ramco Cement Distribution Co. (P.) Ltd. v. State of Tamil Nadu] and the decision of the Supreme Court in 1993 AIR(SC) 123, 1992 (S) JT 729, 1993 (88) STC 151, 1992 (2) Scale 850, 1993 (1) SCC 192, 1992 (S2) SCR 78, 1994 (38) KAR(LJ) 79 (Ramco Cement Distribution Co. Pvt. Ltd. v. State of Tamil Nadu) are applicable to the facts of the present case. It was submitted that in the abovesaid two decisions, there was no mention about rule 6(cc)(ii) of the Tamil Nadu General Sales Tax Rules. In other words, according to the learned counsel, the abovesaid provision was not considered either by this Court or by the Supreme Court in the abovesaid two decisions. Therefore, it was submitted that in view of the plain reading of rule 6(cc)(ii) inasmuch as the petroleum products was not taxable in the hands of the assessee as the second sales, the sale turnover of container should also be not available to tax. Learned counsel further pointed out that the goods involved in the decision of the Supreme Court cited supra, was cement which is a controlled commodity and the dealer in cement cannot sell the cement more than the price fixed by the Cement Control Order. Therefore, the decision rendered by the Supreme Court in 1993 AIR(SC) 123, 1992 (S) JT 729, 1993 (88) STC 151, 1992 (2) Scale 850, 1993 (1) SCC 192, 1992 (S2) SCR 78, 1994 (38) KAR(LJ) 79 (Ramco Cement Distribution Co. Pvt. Ltd. v. State of Tamil Nadu) is applicable only on the facts available in that case. Hence the decision of the Supreme Court cannot be made applicable to the facts arising in this case which are totally different. Learned counsel further pointed out that in 1993 AIR(SC) 123, 1992 (S) JT 729, 1993 (88) STC 151, 1992 (2) Scale 850, 1993 (1) SCC 192, 1992 (S2) SCR 78, 1994 (38) KAR(LJ) 79 (Ramco Cement Distribution Co. Pvt. Ltd. v. State of Tamil Nadu), the Supreme Court was concerned with rule 6(c) which is equivalent to rule 6(cc)(i) and therefore, the said decision cannot be made applicable to a case where interpretation of rule 6(cc)(ii) is involved. For all these reasons, it was submitted that the assessee is entitled to exemption with regard to the sale turnover of the containers in view of the provisions contained in rule 7(cc)(ii) of the Tamil Nadu General Sales Tax Rules.

3. On the other hand, learned Add