STATE OF ANDHRA PRADESH Vs. PHIPSON AND CO

JUDGEMENT

(1.) The question - whether the turnover of the "bottles" (container) and the "beer" (content) have to be taxed separately, the former at the rate applicable to the container and the latter at the rate applicable to the content - is being agitated and re-agitated in several cases. This case also involves consideration of the same question.

(2.) The principle with regard to assessment of sales tax on the container/packing material is laid down by the Supreme Court in Raj Sheel v. State of Andhra Pradesh [1989] 74 STC 379. The Supreme Court observed :

(3.) The Supreme Court laid down the following factors which have to be, taken into consideration to determine whether a transaction for sale of packing material is an independent transaction from the sale of the content. "1. The packing material is a commodity having its own identity and is separately classified in the Schedule; 2. There is no change, chemical or physical, in the packing either at the time of packing or at the time of using the content; 3. The packing is capable of being refused after the contents have been consumed; 4. The packing is used for convenience of transport and the quantity of the goods as such is not dependent on packing; 5. The mere fact that the consideration for the packing is merged with the consideration for the product would not make the sale of packing an integrated part of the sale of the product."