GOVERDHAN CEMENT AGENCIES Vs. STATE OF MYSORE

JUDGEMENT

(1.) This is a revision petition filed by the Assessee against the order of the Mysore Sales Tax Appellate Tribunal, Bangalore, in STA.246 of 1970.

(2.) The point in dispute and. the Question raised is as to whether sales tax was liable to be charged in respect of the value of gunny bags in which the cement was sold by the assessee. The assessee is a retail seller in cement and he is a second dealer. It is common ground that the sale of cement by the second dealer was exempted from tax by virtue of Section 5 (3) (a) read with relevant schedule. The Assistant Commissioner of Commercial Taxes inferred that there was a sale of gunny bags and determined the tax payable at Rs.1648-12P. The assessee contested this before the Deputy Commissioner of Commercial Taxes and before the Tribunal, but was unsuccessful. The Tribunal held that there was no express contract for sale of gunny bags but it was of the opinion that from the circumstances in the case it may be implied that there was a sale of gunny bags. The circumstance on which the Tribunal relied was that in the fixation of the price for the sale of cement there was an item of packing charges at Rs.25 per tonne. In its order the Tribunal states that the value of the packing materials was Rs.25. But it is seen from the particulars given in regard to the retail price that the sum of Rs. 25 represented value of packing material as well as other service charges. This is the only material on which the Tribunal came to a conclusion that there was an implied contract of sale of gunny bags.

(3.) Sri K. Srinivasan, learned Counsel for the petitioner has urged that the circumstance on which the Tribunal relied does not lead to the irresistible conclusion that there was any implied contract for sale of gunny bags. He argued that cement could riot be sold without the bags and were part and parcel of the commodity sold and was only a convenient mode for delivery. He also relied upon a decision of this Court in STRPs. 20 and 21 of 1960 decided on 16-12-1969. In that case also the question was whether in respect of the bags in which potatoes, onions and chillies were sold, there was any implied contract for sale of the bags. The circumstance that had been relied upon in that case was that the assessee gave the value of the bags and stated that it would also have to be taken into account by a prudent businessman. This Court was of the opinion that by itself did not constitute sufficient material to infer an implied contract of sale of the gunny bags. The learned Counsel also brought to our notice the decision of the Supreme Court in State of Tamil Nadu v. Cement Distributors P. Ltd. 31 STC. 309. and the decision in Commissioner of Tares v. Prabhat Marketing Co. Ltd 19 STC. 84..