The value of packing material is not includible in the sale price unless there is an agreement to sell the packing material and the price charged includes the price of the packing material.

RAJU, J.

The assessee is the appellant herein. These appeals have been filed by the assessee against the order of the Joint Commissioner passed in suo motu exercise of revisional power for the assessment years 1974-75 and 1975-76.

2. The petitioner is a dealer in jaggery. As could be seen from the order of assessment itself, the cane jaggery was despatched to other States in gunny bags and the packing materials were not charged for in the bill. Further the assessing authority made revision of the assessment by estimating the value of the gunny bags on the ground that no materials had been placed to indicate the value of the gunny bags. When the matter was pursued on appeal, the first appellate authority has gone into the matter at length and took into account of the facts as noticed from the verification of the accounts that the appellant purchased jaggery packed in very poor and useless gunny bags and no price or value was fixed for the same when they were purchased from agriculturists. The appellant purchased jaggery from the agriculturists and it had not purchased any new or empty gunny bags for packing the jaggery so that it could be said that the appellant would have included the price of gunny while fixing the price of jaggery. In the view of the first appellate authority the cost of the gunny bags used for packing the jaggery might be in the range of 25 paise to 60 paise and was very negligible in the context of the goods purchased. The average price of one bag of jaggery was about Rs. 200. On such materials and having regard to the peculiar nature of the transaction under consideration the appellate authority held that the value of the packing materials which was comparatively insignificant and for which no separate cost was also fixed could not be said to have gone into the price structure of the commodity sold and consequently the value of the packing material would not be subject to tax. As against the order of the appellate authority, the Joint Commissioner, in exercise of his suo motu power of revision, thought it fit to interfere with the order of the appellate authority on the ground that the name and style of the business of the dealers were imprinted on the face of the gunnies used and further as they had to travel a long distance as far as Bombay, such gunnies should be of good quality. It may be pointed out at this stage that it is not the case of the revisional authority which has chosen to invoke the suo motu power of revision, that there was any material before it to factually contend or come to a finding that the gunnies used used were of good quality and on the other hand the reasoning of the revisional authority is based more on surmises than any actual facts or realities.

3. We have heard the learned counsel appearing on either side at length. While the learned counsel for the appellant contended, relying upon the reasoning of the first appellate authority that the turnover in question was not taxable and that at any rate the order passed by the revisional authority is vitiated by perversity of approach and lack of positive or definite material to support its action, the learned Additional Government Pleader would adopt the reasoning of the revisional authority and contend that irrespective of the value of the gunny bags in question used as packing material in these case or whether it was shown separately or not the same is liable to tax while admittedly all inclusive price has been charged, having regard to the definition of "sale price" in section2(h) of the Central Sales Tax Act, 1956.

4. In Commissioner of Sales Tax v. Rai Bharat Das & Bros. the apex Court, while considering the scope of section2(h) of the Act, has held that the question as to whether there was an agreement of sale of packing material is purely a question of fact depending upon the facts and circumstances of each case. Equally the supreme Court while adverting to its earlier decision reported in Jamana Flour & Oil Mill (P)