Ajit Kumar Sen Gupta, J.
1. The petitioner, Indian Explosives Limited, obtained a registration certificate on 1st July, 1960, under the Bihar Sales Tax Act and Rules thereunder from the sales tax authority of Bihar. The said registration certificate was renewed up to 31st May, 1978.
2. On 13th May, 1968, the petitioner entered into an agreement with M/s. Card Board Products (Gomia) whereby the latter firm supplied and sold to the petitioner the packing material, viz., fibre board, cartons, boxes, etc., in accordance with the specification mentioned therein in the agreement. The said agreement was renewed on 30th January, 1974.
3. On 18th March, 1975, the petitioner received from the respondent No. 1, Assistant Commissioner of Commercial Taxes, a letter whereby the petitioner was asked to show cause why the paper carton, purchased on the strength of the concession given in column 13 of the registration certificate, be not deleted from the registration certificate. The petitioner by a letter dated 28th April, 1975, disputed the said allegations made by the respondent No. 1. By a letter dated 9th March, 1976, to the Secretary, Bihar Chamber of Commerce, the Deputy Commissioner of Commercial Taxes, Bihar, represented, inter alia, that if the registration certificate of any dealer incorporated that the dealer utilises the cardboard boxes purchased for the purpose of packing, then in that situation such cardboard boxes sold to such dealer would be free of special sales tax under the said Act. On 8th July, 1976, the Tribunal passed the order in the case of M/s. Card Board Products (Gomia). The Tribunal in that case did not accept the contention of the Deputy Commissioner contained in the said letter. The Tribunal held that carton means a box made from thin paste board and therefore covers cardboard boxes.
4. In view of the said decision of the Tribunal in the Card Board Products (Gomia), the respondent No. 1 by a letter dated 26th August, 1976, directed the petitioner not to furnish any declaration form IX and to pay appropriate tax on entire purchase of the packing materials, failing which entire purchase on the strength of the said declaration form would be added to the taxable turnover of the petitioner. The respondent No. 1 again by a letter dated 25th September, 1976, required the petitioner not to purchase any goods from the said firm on furnishing the declaration forms and also directed the said firm not to accept any declaration forms from the petitioner. The petitioner by a letter dated 13th October, 1976, submitted, inter alia, before the respondent No. 1 that the petitioner was lawfully entitled to purchase the said packing materials on furnishing the said declaration forms. The respondent No. 1 by two letters dated 4th November, 1976, and 18th November, 1976, required the petitioner to produce the said registration certificate in order to amend the same and further required the petitioner not to purchase any goods from the said firm on furnishing the declaration form IX.
5. In this writ application the petitioner has challenged the said directions of the respondent No. 1 contained in those letters and the decision to amend the registration certificate of the petitioner.
6. The contention of the petitioner is that item No. 13 read with item No. 15 of the registration certificate empowers the petitioner to purchase free of special sales tax leviable under the Bihar Sales Tax Act, 1959, various packing materials such as shooks, wax, cotton nets, cardboard cutouts, tapes, ropes, cloth bags, manilla paper, cartons, cardboard and fibre board boxes, etc., as the same are used in the packing of the explosives manufactured and sold by the petitioner. The petitioner is a registered dealer in whose registration certificate the said packing materials are specified as being required for use by it for the packing of the goods, namely, explosives, sold by it. The respondents have issued from time to time the declaration forms IX under the Bihar Sales Tax Act, 1969, for purchase of the said packing materials without payment of special sales tax. The said packing materials were purchased by the petitioner by furnishing the said declaration forms. The said packing materials have all along been utilised by the petitioner only for the specified purpose of use in packing of the said goods sold by it. It is also contended that the packing materials used for packing cannot be further used in any manner and cannot be resold in view of the provisions of the Explosives Rules. In other words, the petitioner contends that the petitioner is not liable to pay any tax on the purchase of the packing materials.
7. On the other hand it is contended by the respondents that Section 5 of the said Act would be attracted in this case as held by the Tribunal in the case of Card Board Products (Gomia). A contention has also been urged that the writ application is not maintainable as the Tribunal's order in the case of Card Board Products (Gomia) is the subject-matter of reference pending before the Patna High Court. Accordingly this Court should not decide this controversy. It is also contended that this Court has no jurisdiction as the sales tax authorities are in Bihar against whom the relief is claimed in this proceeding.
8. I have considered the rival contentions. I would like to dispose of the objection raised by Mr. Chatterjee, learned Advocate on behalf of the respondents, as to the maintainability of the writ application. The pendency of reference in the Patna High Court in the case of another dealer even though the point at issue may be similar cannot take away the jurisdiction of this Court to decide in this writ proceeding the legal contentions urged. I am therefore unable to accept the contention of Mr. Chatterjee that since the reference is pending before the Patna High Court this Court should not decide the issue. The rule was issued in the year 1976. Almost ten years have passed and the matter is still pending in the Patna High Court as well as in this Court. The application cannot be kept pending indefinitely to await the decision of the Patna High Court. That apart the petitioner was not a party to the said proceeding giving rise to the said reference.
9. The other contention of Mr. Chatterjee that this Court has no jurisdiction to entertain this application as the concerned authorities are in Bihar. Admittedly the petitioner has its registered office at 34, Chowringhee Road, Calcutta. The impugned notices and/or orders have been communicated and served at the registered office of the petitioner at Calcutta as well as its factory in Bihar. It has also not been disputed that in the matter of the assessment under the Bihar Sales Tax Act the respondents from time to time during the relevant period visited the office of the petitioner at Calcutta and conducted the assessment proceedings at Calcutta. Thus a part of the cause of action has arisen within the jurisdiction of this Court. The respondents also have its office at No. 18, Camac Street, Calcutta. That apart, this point should have been taken when the rule was issued after hearing the respondents. At this stage it would neither be proper nor desirable to dismiss the application on the ground that this Court has no jurisdiction to entertain the application. When a preliminary point is raised in a case which affects the very entertainment or maintainability of a writ application, it should be taken when the rule is issued or immediately thereafter. Otherwise because of passage of time the petitioner may be put to serious prejudice.
10. It is the contention of the petitioner that Section 5 of the Act as it stood at the material time has no application. Section 5 of the Act can be attracted where there is a series of sales and not one. Section 5 of the Bihar Sales Tax Act, 1959, inter alia, provides as follows:
5. Point in the series of sales at which the special sales tax shall be levied.--The special sales tax shall be levied only at that point in the series of sales at which the goods are sold to a person other than a registered dealer in whose registration certificate such goods or class or description of goods are specified as being required for resale by him or for use by him in the packing of goods which he sells:Provided that the State Government may, in respect of any goods or class or description of goods or any class of dealers notified in this behalf, direct that the said tax shall, subject to such conditions and restrictions as may be specified in the notification, be paid at any other point.
11. A series of sales necessarily postulates more than one sale. There must be a set of sale in line or in succession. Therefore, before the tax can be imposed under Section 5 of the Act it is to be shown that the commodity itself is passing through series of sales by successive dealers like distributor, wholesaler and retailer who can be said to carry on business of buying and selling of the goods in question. It is contended that in the present case there has been only one sale of the packing materials which the petitioner utilised. Such packing materials cannot be sold again in view of the restriction contained in the Explosives Act and Rules. It is no doubt true as held by the Allahabad High Court in Gurna Mal v. State of Uttar Pradesh reported in [1970] 26 STC 270, that ' 'a series of sales' must necessarily have more than two sales, otherwise there would be no series'.
12. Whether there is only one sale involved in this case or not has to be considered in the light of the provisions of the Explosives Act and Rules.
13. Section 5 of the Explosives Act, 1884, empowers the Central Government to make rules as to the licensing of the manufacture, possession, use, sale, transport and importation of explosives. In pursuance of the said provisions the Explosives Rules, 1940, were made. The Rules of 1940 have been repealed by the Explosives Rules, 1983. It has been submitted by Dr. Pal that the Rules are more or less similar.
14. Rule 8 of 1940 Rules relates to packing of explosives. It provides that no explosive shall be imported, tendered for transport, transported, possessed or sold unless it is packed in the manner laid down in Schedule II and the packages marked in accordance with Rule 9.
15. Rule 8 of 1983 Rules provides that no person shall import, tender for transport, cause to be transported, possess or sell any explosive unless it is packed in the manner laid down in Schedule II.
16. Clause 4 of Schedule II of the 1940 Rules provides that a package when actually used for the packing of one explosive shall not be used for the packing of any other explosive or of any other article or substance. Clause 4 of Schedule II of the 1983 Rules is in identical terms.
17. Clause 11(a) of Schedule II of 1983 Rules provides that outer package shall be used only once for packing and transport of explosives. Clause 11(b) provides that when the explosives contained in outer package are removed therefrom, the outer package shall be destroyed or disposed of in such a manner that cannot be reused for any purpose.
18. It is, therefore, evident that the petitioner has to comply strictly with the provisions contained in the Explosives Rules as regards packing of explosives. The packing has to be made in the manner laid down in Schedule II. If packing materials have been purchased by the petitioner and utilised for packing of the explosives such packing material cannot be used again for any other purpose. In the nature of things and in the context of the Explosives Rules there cannot be any resale of the packing materials purchased by the petitioner. If that be the position there cannot be any series of sales. There will be only one sale, that is to say, the sale by the Card Board Products (Gomia) to the petitioner. The petitioner is prohibited from selling those packing materials after their use in the packing of the explosives. It has not been disputed that the packing materials have been used by the petitioner only for specified purpose of packing the explosives and not for any other purpose. I am, therefore, of the view that Section 5 of the Bihar Sales Tax Act is not attracted on the facts and circumstances of this case.
19. Mr. Chatterjee relying on the relevant notification has submitted that the petitioner purchased cartons which fall within the goods specified in the notification. The notification dated 12th February, 1966, provides that special sales tax would be leviable on the following goods:
Paper including all kinds of paste board, millboard, straw-board, cardboard, blotting paper, newsprint, cartridge paper, packing paper, paper bags, cartons, cards and blank registers, note books, exercise books, envelopes, labels, letter pads, writing tablets and flat files made out of paper.
20. On the other hand it is contended by the petitioner that the said notification includes only cartons and does not include boxes or other outer packages made of cardboard. Accordingly the boxes purchased by the petitioner from the Card Board Products (Gomia), the respondent No. 5, are not 'cartons' and do not fall within any of the goods specified in the aforesaid notification. In support of this contention the petitioner has relied on the glossary of terms relating to paper and pulp based packaging materials being IS 4261-1967 issued by the Indian Standards Institution on 19th October, 1967. There 'box' and 'carton' have been defined as follows:
Box--A rigid container having closed faces used mainly as an exterior container for transportation. It can also be a set up box, three dimensional and rigid in construction having a base and a lid and delivered in a finished form.
Carton--A form of package used as interior packing made from bending grade of paperboard, corrugated or solid fibre board having a thickness between 0.30 and 2.00 mm. A carton is never used as an exterior container for transportation.
21. It is not in dispute that the petitioner purchased from the said Card Board Products (Gomia) corrugated fibre board packaging cases used by the petitioner as 'outer package' under Schedule II of the Indian Explosives Rules. In terms of the agreement by and between the petitioner and the said Card Board Products (Gomia), boxes and/or cases are required to be manufactured in accordance with the specifications given therein. Such packages are manufactured by specified materials having thickness of 6.5 + 1 mm. Under the I.S.I. definition a carton is used as interior packaging and never as exterior container and is made on fibre board having thickness between 0.30 and 2.00 mm. only. Thus the packages manufactured for and purchased by the petitioner from the respondent No. 5 do not come within the meaning of 'carton' in commercial parlance. Under the I.S.I., general requirements of packages for explosives, Part I, Commercial High Explosive No. IS 10212 (Part I) 1982, the outer package is made either of corrugated fibre board box or wooden box. Under the said I.S.I. 4261-1967 a box is mainly used as an exterior container for transportation-Further a distinction has also been made by the Commercial Tax Officer himself as he has recorded in the registration certificate of the petitioner under the Bihar Sales Tax Act both cartons and boxes. The very fact that both 'carton' and 'boxes' are recorded in the registration certificate, it is evident that the sales tax authorities understood and treated 'carton' and 'boxes' as two different and distinct goods. In commercial parlance the two are different goods having different purposes whereas carton is never used as an exterior container for transportation, box is a rigid container used mainly as an exterior container for transportation. The notification in question includes only 'carton' and does not include 'boxes' or outer packages made in cardboard. The boxes purchased by the petitioner from the respondent No. 5 are not 'cartons' and do not fall within any of the goods specified in the notification. I am, therefore, of the view that the said notification whereby the special sales tax is sought to be levied has no application to the facts and circumstances of this case. Accordingly, the respondents have acted without jurisdiction in purporting to take steps for amending the registration certificate of the petitioner with reference to or on the basis of the said notification in respect of purchase of cardboard boxes from the respondent No. 5.
22. For the reasons aforesaid this application succeeds. The rule is made absolute. The respondents are directed not to proceed any further for amendment of the registration certificate of the petitioner.
23. There will be no order as to costs.