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PETITIONER:

JAMANA FLOUR & OIL MILL (P) LTD.

Vs.

RESPONDENT:

STATE OF BIHAR

DATE OF JUDGMENT16/04/1987

BENCH:

MISRA RANGNATH

BENCH:

MISRA RANGNATH

PATHAK, R.S. (CJ)

CITATION:

1987 AIR 1207 1987 SCR (2)1047

1987 SCC (3) 404 JT 1987 (2) 155

1987 SCALE (1)835

CITATOR INFO :

APL 1989 SC 315 (10)

F 1989 SC1696 (8)

ACT:

Bihar Sales Tax Act, 1959 and Roller Mills Wheat Products

(Price Control) Order, 1964--Wheat products sold in gunny-

bags--Whether gunny bags a different commodity and sale

thereof assessable to higher rate of tax--Whether there was

contract to sell packing material along with the

product--Question of fact depending on circumstances of each

case.

HEADNOTE:

For the year 1964-65, the assessee, a registered dealer,

under the Bihar Sales Tax Act, 1959 returned a gross turn-

over of Rs.53,39,981 which was accepted by the Assessing

Officer. He determined the taxable turnover at Rs.52,79,962

representing the sale of wheat products taxable at 2%. He

found that the dealer has sold gunny bags in which wheat

products had been packed and determined its turnover at

Rs.1,37,150 and assessed the same at 4-1/2%.

The First Appellate Authority on assessee’s appeal held

that the Assessing Officer was not justified in adding back

the price of container in the gross turnover. What he should

have done is to tax a portion of the taxable turnover at a

different rate or out of the turnover taxable, the price of

bags calculated at the rate of 70 paise per 100 kilogram

should have been deducted and taxed at the rate of 4-1/2%.

The remaining was to be taxed at the rate of 2%.

In the revision before the Tribunal the assessee con-

tended that the demand of sales-tax payable at different

rates on the calculated turnover of gunny bags was not at

all warranted as no price had been charged for the contain-

ers. The Tribunal held that the lower Courts were justified

in levying tax at a different rate on the turnover on ac-

count of sale of gunny bags in which the wheat products were

sold and directed that the Assessing Officer should ascer-

tain from the accounts, the turnover on account of sale of

gunny bags as container of wheat products during the period

under consideration and assess tax thereon at the prescribed

rate of 4-1/2%. The balance turnover shall be assessed at

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2%. In the reference the High Court affirmed this view.

Dismissing the appeal,

1048

HELD: 1. The Control Order contemplates a net weight

which means that the weight of the bag is included in the

price to be charged by the dealer. Under the explanation

when packing is done in clothbags, a higher rate is admissi-

ble. The scheme clearly suggests that the price of gunny-

bags is inclusive and where cloth-bag is used, a higher

price over and above what has been provided for ordinary

containers is permitted. [1051C-D]

Commissioner of Taxes v. Prabhat Marketing Company Ltd.,

19 STC 84, referred to.

2. The Tribunal rightly came to the conclusion that

there was implied agreement of sale of the gunny-bags.

Admittedly, gunny bags are a different commodity and sale

thereof is assessable to tax at 4V1%. It is not disputed

that appellant bought gunny-bags for packing wheat products

for the purpose of sale. [1051C]

3. The question as to whether there was an agreement to

sell packing material is a pure question of fact depending

upon the circumstances found in each case. [1051G-H]

4. The Tribunal and the High Court in the instant case,

have recorded a clear finding that there was an implied

contract for sale of the gunny bags with the products con-

tained therein. [1051H]

JUDGMENT:

CIVIL APPELLATE JURISDICTION: Civil Appeal No. 103 of

1975.

From the Judgment