Himalaya Chatni Bhandar Vs. Commissioner of Sales Tax - Court Judgment

Excerpt:
- madhya pradesh nagar tatha gram nivesh adhiniyam (23 of 1973)section 50(4) proviso (as inserted by act of 2004): [dipak misra, krishna kumar lahoti & rajendra menon, jj] preparation of town development scheme proviso prescribing time limit held, object of amendment is to remove hardship caused to citizens and to provide time limit to consider objections and suggestion and to provide a deeming clause so that the authority would act in quite promptitude. proviso unequivocal, categorical and unambiguous and does not permit any other kind of construction but a singular one. section 50 (4) proviso (as inserted by act of 2004): [dipak misra, krishn kumar lahoti & rajendra menon, jj] preparation of town development scheme held, proviso is not retrospective. scheme already finalised will not lapse and has to be completed within the time span provided under proviso. no vested right accrues in favour of authority on commencement of process of preparation of scheme, which cannot be impaired by introducing proviso. section 50(4) proviso (as inserted by act of 2004): [dipak misra, krishn kumar lahoti & rajendra menon, jj] preparation of town development scheme held, proviso uses the term shall be deemed to have lapsed. it does not convey that scheme gets automatically lapsed. orderg.g. sohani, ag. c.j.1. the order in this case will also govern the disposal of miscellaneous civil cases nos. 293, 294 and 295, all of 1985, between the same parties.2. by these references under section 44(1) of the m.p. general sales tax act, 1968 (hereinafter referred to as 'the act'), the board of revenue has referred the following question of law to this court for its opinion:whether, on the facts and in the circumstances of the case, the tribunal was right in holding that irrespective of the fact that the packing material was purchased from the registered dealers after payment of tax at the full rate, the assessee was not entitled to a deduction from his turnover under section 2(r)(ii) of the m.p. general sales tax act, 1958, in respect of sales of packing material along with the goods contained therein, in view of the explanation occurring in section 2(o) of the act ?3. the material facts giving rise to these references, briefly, are as follows:the assessee is engaged in the business of manufacture of chatnis, condiments, pickles, etc. the assessee was assessed to tax under the act for the period 1st april, 1977 to 31st march, 1978; 1st april 1978 to 31st march, 1979; 1st april, 1979 to 31st march, 1980 and 1st april, 1980 to 31st december, 1980. the assessee had purchased tax-paid packing material from registered dealers after payment of full tax and thereafter sold the goods duly packed in the packing material so purchased. the assessee claimed deduction from its turnover under section 2(r)(ii) of the act. the assessing authority rejected that claim. on appeal, the order passed by the assessing authority was maintained. on further appeal, the board of revenue held that the packing materials when sold with the goods, had lost their own existence and became part and parcel of the goods sold. in this view of the matter, the board held that even if the packing material was purchased after paying full tax, deduction under section 2(r)(ii) of the act could not be allowed from the turnover. aggrieved by the order passed by the board of revenue, the assessee sought reference and it is at the instance of the assessee that the aforesaid question of law has been referred to this court for its opinion.4. learned counsel for the assessee brought to our notice the decision of a division bench of this court reported in kukveja udyog v. commis sioner of sales tax [1987] 67 stc 43 (app.). following that decision, another bench of this court has held in k.p. sons v. sales tax officer, katni [1987] 67 stc 38 that the sale of goods duly packed would also amount to sale of the packing material and that the price or cost or value of such packing material was deductible if it was tax-paid, in view of the explanation to section 2(o) of the act and the provisions of section 2(r) of the act. no decision to the contrary was brought to our notice and we, therefore, see no cogent reason for taking a view different from that taken in the aforesaid decisions. in our opinion, therefore, the tribunal was not right in holding that the assessee was not entitled to a deduction from his turnover under section 2(r)(ii) of the act.5. our answer to the question referred to this court is in the negative and in favour of the assessee. in the circumstances of the case, parties shall bear their own costs of these references.

Judgment:
ORDER

G.G. Sohani, Ag. C.J.

1. The order in this case will also govern the disposal of Miscellaneous Civil Cases Nos. 293, 294 and 295, all of 1985, between the same parties.

2. By these references under Section 44(1) of the M.P. General Sales Tax Act, 1968 (hereinafter referred to as 'the Act'), the Board of Revenue has referred the following question of law to this Court for its opinion:

Whether, on the facts and in the circumstances of the case, the Tribunal was right in holding that irrespective of the fact that the packing material was purchased from the registered dealers after payment of tax at the full rate, the assessee was not entitled to a deduction from his turnover under Section 2(r)(ii) of the M.P. General Sales Tax Act, 1958, in respect of sales of packing material along with the goods contained therein, in view of the explanation occurring in Section 2(o) of the Act ?

3. The material facts giving rise to these references, briefly, are as follows:

The assessee is engaged in the business of manufacture of chatnis, condiments, pickles, etc. The assessee was assessed to tax under the Act for the period 1st April, 1977 to 31st March, 1978; 1st April 1978 to 31st March, 1979; 1st April, 1979 to 31st March, 1980 and 1st April, 1980 to 31st December, 1980. The assessee had purchased tax-paid packing material from registered dealers after payment of full tax and thereafter sold the goods duly packed in the packing material so purchased. The assessee claimed deduction from its turnover under Section 2(r)(ii) of the Act. The assessing authority rejected that claim. On appeal, the order passed by the assessing authority was maintained. On further appeal, the Board of Revenue held that the packing materials when sold with the goods, had lost their own existence and became part and parcel of the goods sold. In this view of the matter, the Board held that even if the packing material was purchased after paying full tax, deduction under Section 2(r)(ii) of the Act could not be allowed from the turnover. Aggrieved by the order passed by the Board of Revenue, the assessee sought reference and it is at the instance of the assessee that the aforesaid question of law has been referred to this Court for its opinion.

4. Learned counsel for the assessee brought to our notice the decision of a Division Bench of this Court reported in Kukveja Udyog v. Commis sioner of Sales Tax [1987] 67 STC 43 (App.). Following that decision, another Bench of this Court has held in K.P. Sons v. Sales Tax Officer, Katni [1987] 67 STC 38 that the sale of goods duly packed would also amount to sale of the packing material and that the price or cost or value of such packing material was deductible if it was tax-paid, in view of the explanation to Section 2(o) of the Act and the provisions of Section 2(r) of the Act. No decision to the contrary was brought to our notice and we, therefore, see no cogent reason for taking a view different from that taken in the aforesaid decisions. In our opinion, therefore, the Tribunal was not right in holding that the assessee was not entitled to a deduction from his turnover under Section 2(r)(ii) of the Act.

5. Our answer to the question referred to this Court is in the negative and in favour of the assessee. In the circumstances of the case, parties shall bear their own costs of these references.