STATE OF ORISSA Vs. BALAJI WOOD INDUSTRIES

JUDGEMENT

(1.) THIS is a reference made at the instance of the State of Orissa by the Member, Sales Tax Tribunal, Orissa under section 24 (1) of the Orissa Sales Tax Act of 1947, referring two questions for opinion of the court, namely :-

(2.) THE assessee carries on the business of purchase and sale of timber and firewood as also manufacture and sale of cable drums. In the course of its business, during the year 1971-72, the assessee had sold cable drums to M/s. Aluminium Industries Limited and M/s. Hira Cable Works. Both these purchasing dealers are registered under the Orissa Sales Tax Act and are entitled to purchase packing material at concessional rate as provided by the Act and the Rules made thereunder. The goods sold by the assessee would normally be exigible to tax at the rate of five per cent unless by virtue of the entry in the certificate of registration, the purchasing registered dealers were entitled to buy the same at concessional rate of 3 per cent. While the assessee maintained that the purchasing dealers were entitled to the concessional rate, the Sales Tax Officer was of the view that the purchasing dealers were not entitled to the benefit and, therefore, the assessee became exigible in respect of its turnover on this account at the rate of 5 per cent. Thus, it is the difference in the rate of assessment that gave rise to the dispute. Ultimately, the Tribunal accepted the claim by holding that in the absence of a definition of "packing material" and keeping in view the nature of the goods in question, cable drums should be accepted as packing material.

(3.) ON the aforesaid analysis, we must told that the Tribunal has taken the right view and the contentions advanced by the State have no basis. We would, accordingly, answer the first question thus : In the facts and circumstances of the case, cable drums can be treated as packing materials for aluminium cables and the Member, Sales Tax Tribunal, was justified in allowing the benefit of the concessional rate in respect of the sales effected by the assessee to M/s. Aluminium Industries Limited. In view of the aforesaid answer, the second question, as framed, does not arise for consideration. We make no order as to costs. Reference answered accordingly.