The purchase of empty bottles and dealwood boxes by a pharmaceutical company cannot be brought to charge under section 7-A of the Tamil Nadu General Sales Tax Act as the bottles are not consumed in the manufacture of drugs and syrups and the boxes are sold along with the manufactured goods.

RAMANUJAM, J.

In this tax revision case filed by the assessee the ambit and scope of section 7-A(1)(a) and (b) of the Tamil Nadu General Sales Tax Act comes up for consideration.

2. The assessee is pharmaceutical company manufacturing drugs and syrups. During the assessment year 1975-76 the assessing authority found that the assessee had purchased empty bottles and dealwood cases to the extent of Rs. 30, 578.99 during the period from 15th July, 1975, to 31st March, 1976. This turnover was brought to charge under section 7-A of the Act along with the admitted taxable turnover. Aggrieved by the order of the assessing authority including the sum of Rs. 30, 578.99 being the purchase value of empty bottles and dealwood cases, the assessee filed an appeal before the Appellate Assistant Commissioner. That appeal having been dismissed, the assessee took the matter in appeal before the Tribunal. The Tribunal had sustained the levy of tax on the said sum of Rs. 30, 578.99 on the ground that the purchases of empty bottles will come under section 7-A(1)(a) of the Act and the purchase of dealwood boxes will fall under section 7-A(1)(b) of the Act. Therefore the assessment made on the said turnover under section 7-A by the assessing authority was justified. Before us, the assessee challenges the view taken by the Tribunal.

3. According to the assessee, the Tribunal is in error in treating the user of the empty bottles purchased for packing medicines as amounting to consumption so as to come within the provision of section 7-A(1)(a). He also contends that the Tribunal is in error in treating the purchase of dealwood cases which are used for packing the bottles and despatching them to the purchasers will amount to disposal of the goods in any manner otherwise than by way of sale coming within the provision is section 7-A(1)(b). According to the learned counsel for the assessee the user of the bottles as container for the medicine manufactured by the assessee can never be treated as consumption as the bottles are used as containers only after the manufacturer of the drugs or syrups and that such user cannot amount to consumption of the bottles in the manufacturer of goods as contemplated in section 7-A(1)(a) of the Act and so far as the dealwood boxes are concerned, that the goods manufactured by the assessee are despatched to the purchasers after packing in dealwood boxes and therefore, the dealwood boxes should be taken to have been sold along with the manufactured goods and therefore, it should be taken to be a sale and not a disposal of goods otherwise than by way of sale and therefore, the purchases of dealwood boxes will not fall within section 7-A(1)(b) of the Act as has been held by the Tribunal. A perusal of the order of the Tribunal shows that the Tribunal was of the view that the process of manufacture is complete only when the drugs are bottled in a particular size of bottles and therefore, the bottles which are used as containers for filling up drugs or syrups should be treated to have been used up in the process of manufacture, though physically they may not lose their shape and get destroyed during the process of manufacture. But we are of the view that the Tribunal is not right in saying that the process of manufacture is complete only when the drugs or syrups are bottled in particular size of bottles. It may be that without bottling drugs and syrups manufactured cannot conveniently be sold. But that is not a reason for holding that the process of manufacture of drugs and syrups is not complete unless they are bottled or put in suitable containers. We cannot therefore agreed with the Tribunal that the process of manufacture is complete only when the drugs or syrups are bottled in particular size of bottles and therefore, the bottles should be treated to have been used up in the process of manufacture. The expression "consumed" has come up for judicial consideration in many decided cases particularly, in a recent judgme