WEST COAST WEAVING ESTABLISHMENTS Vs. STATE OF KERALA

JUDGEMENT

(1.) This petition has arisen out of an assessment of sales tax on the value of packing materials used in consigning handloom fabrics in the course of interstate trade. The order of assessment by the Assistant Sales Tax Officer, Cannanore reads:

(2.) The assessee's appeal before the Additional Appellate Assistant Commissioner and second appeal before the Appellate Tribunal did not succeed. He therefore seeks a revision by this Court.

(3.) The assessee has declared that it has not charged its consignees for the packing of the goods consigned to them. Its assertion that the materials used for packing have no resale value is not challenged by the department, which states only that the price of the cloth must in the circumstances be deemed to include the price of its "containers" as well. We think it absurd to call as 'containers' the materials in which bundles of cloth are packed in the usual course of trade. It is a well known courtesy observed by traders that goods purchased are wrapped or packed before they are delivered to the customers and they charge nothing extra for such wrapping or packing - the case of containers made of metal, glass etc. being quite different. The inference of the sales tax authorities that the price of cloth sold included the cost of its packing is not based on any evidence, nor is it warranted by the circumstances of this case. Unless there be a 'sale' of the packing materials, directly or indirectly, to the consignees, tax cannot be attracted. The definition of 'turnover' in the Act makes clear that only the sale price of goods sold would attract sales tax. There having been no sale of the packing materials the assessment concerned has no sanction of law and has to be discharged. We do so, and allow this petition with costs, rupees one hundred.