MALIK TRADERS Vs. STATE OF MAHARASHTRA

JUDGEMENT

(1.) THE Sales Tax Tribunal has referred to this Court the following two questions of law for opinion. The questions read thus :

(2.) IT is evident that the real question of law to be answered is the first question, the second question being consequential. The assessee is an exporter of footwear. Its purchases are from registered dealers to whom it furnishes undertaking in form 14. The certificate in form 14 is also given when the assessee purchases packing material which is used for packing the footwear for export. The departmental authorities took the view that the packing material for which the assessee had given undertaking in form 14 in terms of section 12 of the Bombay Sales Tax Act, 1959 (for short "the Act"), was not resold by the assessee in the course of export out of the territory of India. The assessee's case was hit by the provisions of section 14 of the Act and the assessee was liable to pay full purchase tax.

(3.) THE Sales Tax Tribunal referred to the Supreme Court decisions in Hyderabad Deccan cigarette Factory v. State of Andhra Pradesh [1966] 17 STC 624 and State of Madras v. Cement allocation and Co-ordinating Organisation [1972 29 STC 114 and to its own decision in M/s. Crescent Exporters v. State of Maharashtra (Second Appeal Nos. 1494 and 1495 of 1973 decided on 25th July, 1974 ). It stated that there could not be hard and fast rule as to whether the packing materials could or could not be said to have been resold in the course of export out of the territory of India. If the packing material was of routine type and not complicated and its cost was insignificant, it might not be a case of sale of packing material even by implication. On the other hand, if the packing material used was costly and the assessee was specifically required to use special type of packing, it might be a case of sale of packing material. In the present case, finding that the instructions given regarding packing were of routine type and the cost of packing was less than 10 per cent, i. e. , from 8. 84 per cent to 9. 29 per cent, the tribunal held that the packing material could not be said to have been resold by the assessee in the course of export out of the territory of India. Accordingly the assessee, it was held, had violated the undertaking given by it in form 14 and was liable to pay the difference between full purchase tax payable and concessional purchase tax paid by it on its purchases of packing material.