The rate of tax and the point of levy applicable to containers or packing materials in which goods are sold are the same as those applicable to the goods contained or packed, even if the price of the containers or packing materials is charged separately.

The judgment of the Court was delivered by

SUHAS C. SEN, J. - Premier Breweries Limited, the appellant herein, is a dealer in Indian Made Foreign Liquor. The liquor is sold in bottles packed in cardboard cartons. The dispute in this case arose in course of sales tax assessment for the year 1982-83. Before the assessing officer the assessee's case was that the cardboard cartons will have to be taxed at the rate of 8 per cent under entry 97 of the First Schedule of the Kerala General Sales Tax Act, 1963 and not at the rate of 50 per cent applicable to sale of liquor. The appellant's case was that it had charged its customers separately for the liquor and the cartons. There was no reasons to include the value of the cartons in the value of the liquor for the purpose of levy of tax. Initially, the assessee's stand was accepted by the Assistant Commissioner of Sales Tax and an assessment order was passed accordingly.

2. Later on the Deputy Commissioner, Palghat, thought that an error has been committed in the assessment order and in exercise of his revisional power under section 35 of the Act he set aside the assessment order. The Deputy Commissioner was of the view that the assessing authority had erroneously levied tax at the rate of 8 per cent on packing material, viz., cardboard cartons. As per section 5(5) of the Kerala General Sales Tax Act, 1963 where goods sold were contained in containers or were packed in any packing material, the rate of tax and the point of levy applicable to such containers or packing materials, as the case may be, should, whether the price of the containers or the packing materials was charged separately or not, be the same as that applicable to goods contained or packed. In determining turnover of the goods, the turnover in respect of the containers or packing materials will have to be included therein.

3. Thereafter, the assessment was revised in the manner indicated by the Deputy Commissioner. The view of the Deputy Commissioner was upheld by the Tribunal and also the High Court.

4. According to the appellant, the High Court has overlooked the fact that the containers were separately charged on the invoices raised by the appellant and the customers paid separately for the liquor and the containers. There is a specific entry in the First Schedule under which tax has to be levied at the rate of 8 per cent on the containers. It was not open to the assessing authority to include the value of the containers in the value of the liquor for the purpose of calculating the assessee's turnover. Secondly, it has been contended that the cardboard cartons, in any event, are secondary containers provided for protection of the bottles in which the liquor was sold. The bottles were the primary containers of beer. The cartons were provided to ensure that the beer bottles were not broken in transit. Therefore, the turnover of the cartons could not in any way be included in the turnover of the beer sold by the appellant. Lastly, a point was taken that under the Kerala General Sales Tax Act, a single point duty is leviable on the cardboard cartons. This duty has already been paid on these cartons by the manufacturers. Further levy on these cartons at the point of item when beer was sold will be contrary to law. A large number decisions were cited on behalf of the appellant as well as the respondents in support of their contentions.

5. Before examining the decisions, it will be useful to refer to the relevant provisions of the Kerala General Sales Tax Act. Tax on sale or purchase of goods has been imposed by section 5 of the Act. Sub-section (5) and (6) of section 5 of the Act provide :

"5(5) Notwithstanding anything contained in sub-section (1) or sub-section (2), but subject to sub-section (6) where goods sold are contained in containers or are packed in any packing materials, the rate of tax and the point of levy applicable to such containers or packing materials, as the case may be, shall, whether the price