MADRAS CEMENTS LIMITED Vs. STATE OF MADRAS

JUDGEMENT

(1.) IN these four writ petitions, a common question arises. The first three writ petitions are for the issue of writs of prohibition, and the last one, though originally filed for the issue of a writ of prohibition, was later converted into one for the issue of writ of certiorari, since by then the order of assessment was passed and that order is under challenge (Writ Petition No. 862 of 1968). The assessing officer gave a notice at or about the time of making a final order of assessment in each of the assessment years in question, viz., 1962-63, 1963-64, 1964-65 and 1966-67, calling upon the petitioners to state as to why the cost of the packing material used in the course of the petitioner's business be not included in the assessable turnover and such cost of packing material not having been included earlier, why steps should not be taken to revise the said assessments. The petitioners objected to the said proposal on the ground that the cost of packing material and the incidental labour cost connected with it are specifically excluded from being included in the assessable turnover under the rules then in force prior to 9th March, 1964, as well as under rule 6(cc) of the Tamil Nadu General Sales Tax Rules, 1959. Reliance was placed upon a decision of this court in Dalmia Cement (Bharat) Ltd. v. Deputy Commercial Tax Officer But apprehending that the proposal made by the taxing officer would be implemented, the petitioners have come up with these petitions for the issue of rules of prohibition as already stated. The last case, however, is one in which a final order has been passed, and hence the petitioners are seeking the relief of writ of certiorari to quash the same.

(2.) THE point that is urged before me is that under the rules which were in vogue prior to the present rule 6 under the Tamil Nadu General Sales Tax Rules, 1959, such packing charges were excludable if they were distinctly shown in the bills relating to the transactions between the dealer and the purchaser. There is not much of a difference in the purport of the old and the new rule. It is, therefore, sufficient to note the new rule, which runs as follows :

(3.) THE learned Government Pleader, however, would stress upon the factual detail that cement does not ordinarily leave the factory premises without being bagged in gunny bags and this service being a pre-sale service and which is an essential pre-requisite in the trade, such charges, even though prima facie relatable to and dealt with as packing charges, yet are not to be excluded from tax assessable turnover as the Supreme Court in Dyer Meakin Breweries Ltd. v. State of Kerala (S.C.)) has expressed so.The second contention is that these gunny bags have been purchased from outside the State by issuing 'C' forms for the purpose, and as such, out-of-State purchase of gunny bags cannot be said to be for the purpose of manufacture of cement the normal inference would be that such purchase should be for resale. In this view of the matter also, it is stated that the amount representing the sales of gunny bags, but shown as charges for packing material, should not be excluded from the assessable turnover. As regards the observation of the Supreme Court in Dyer Meakin Breweries Ltd. v. State of Kerala S.C.)), I am unable to agree with the learned Government Pleader that the ratio in the said case would effectively over-ride the principles laid down in Dalmia Cement (Bharat) Ltd. v. Deputy Commercial Tax Officer That case dealt with liquor. Liquor at any stage cannot be handled unless it is packed. Therefore, in those circumstances, the Supreme Court thought of making a distinction between one product and another, according to the nature inhered in it.