UNION TERRITORY OF PONDICHERRY Vs. AUROFOOD LIMITED

JUDGEMENT

(1.) THE Union Territory of Pondicherry represented by the Deputy Commissioner (Commercial Taxes), Pondicherry, is the petitioner herein. THE assessee Aurofood Limited is doing business in wheat products, biscuits, etc. During the assessment years from 1988-89 to 1991-92, the assessee sold atta, maida, sooji, etc., in one kilogram polythene bags as detailed below : Sl. Assessment year Sales turnover involved on the sale of No. wheat products in one kilogram polythene bags 1. 1987-88 Rs. 05, 53, 207.10 2. 1988-89 Rs. 13, 11, 349.10 3. 1989-90 Rs. 14, 45, 758.88 4. 1990-91 Rs. 02, 12, 206.05

(2.) THE assessee contended that the above sales of wheat products in polythene bags are not sales in sealed containers and therefore they are entitled for exemption from payment of tax as per the provisions of the Pondicherry General Sales Tax Act, 1967. On the other hand, the assessing officer has rejected their claim in all the four years and levied tax at the rate of 3 per cent treating them as sales in sealed containers. Aggrieved, the assessee filed appeals before the Appellate Assistant Commissioner. THE Appellate Assistant Commissioner confirmed the order passed by the assessing authority, in all these assessment years under consideration. Aggrieved, the assessee filed second appeals before the Sales Tax Appellate Tribunal. THE Sales Tax Appellate Tribunal, after hearing the parties concerned, reversed the order passed by the Appellate Assistant Commissioner and held that the sales of atta, maida, sooji, etc., sold in one kilogram polythene bags during the assessment years under consideration are not sales of atta, maida, sooji in sealed containers, liable for tax as per the provisions of the Pondicherry General Sales Tax Act, 1967. Aggrieved by that order, the department is in revision before this Court.

(3.) ON the other hand, learned counsel appearing for the assessee submitted that wheat products sold in small one kilogram bag should not be treated as sale in sealed containers. According to the learned counsel, polythene bags cannot be considered as containers. It was also not sealed as contemplated under the provisions of the abovesaid Act. Sales of wheat products, such as atta, maida, sooji, etc., are first sales exempted from tax, unless, they are sold in sealed containers. In the present case, learned counsel appearing for the assessee submitted that the abovesaid products were sold only by packing in the polythene bags. What was done by the assessee is only packing the products like atta, maida, sooji, etc., in the polythene bags and the said polythene bags containing the abovesaid products were not again put in a container for the purpose of sale. According to the learned counsel, unless the polythene bags containing atta, maida, sooji etc., were packed in another container, the sale cannot be considered as sale of the abovesaid products in sealed containers. Learned counsel also brought out the difference between packing and filling in a container. Since container is absent in the present case, according to the learned counsel exemption cannot be denied for the sale of the abovesaid products in polythene bags. Learned counsel further relied upon various decisions of the Supreme Court and High Courts in order to support his contention that exemption should not be denied for sale of atta, maida, sooji, etc., packed in polythene bags. Therefore, according to the learned counsel, the Tribunal was correct in granting exemption for the sale of the abovesaid products, which were not sold in a sealed container.