STATE OF ORISSA Vs. HABIB RAHIMUTULLA AND CO

JUDGEMENT

(1.) THESE are references made by the Member, Additional Sales Tax Tribunal, under section 24 (1) of the Orissa Sales Tax Act at the instance of the revenue. The following three questions have been referred :

(2.) AT the hearing of the applications, the only question which the learned standing counsel pressed is in relation to taxability of gunny bags used as containers and the rate at which such turnover is subjected to sales tax. We are concerned with the periods 1971-72 and 1972-73. In the first year the assessee received Rs. 74,054. 09 while in the second year it received Rs. 25,770. 30. In the mid-year of 1971-72, the rate of tax for containers was enhanced from 7 to 8 per cent. The assessing officer found that out of the total receipts, Rs. 44,574. 90 was exigible to tax at 7 per cent while for the remainder in both the years the rate of tax would be 8 per cent. The Tribunal in second appeal reduced the rate of tax on sale price of gunny from 7 per cent or 8 per cent to 3 per cent by relying upon the fifth proviso to section 5 (1) of the Orissa Sales Tax Act which provides that the sale of containers of taxable goods, when sold with such goods but not charged separately, shall be subject to payment of tax at the same rate as the goods contained therein. The Tribunal proceeded to say :