1. This reference under S. 61 (1) of the Bombay Sales Tax Act, 1959, arises out of determination proceedings under S. 52 of the said Act.
2. The respondents, Voltas Ltd. are a public limited company. At the relevant time they were acting as distributors for Kaira District Co-operative Milk Producers' Union, Anand, in the State of Gujarat. The said Union manufactures various products, including cheese. The cheese so manufactured by them was marketed in various forms, including in the form of cheese cubes or as they are referred to on the record, chaplets, packed in aluminium foils and sold under the trade name 'Amul'. On August 24, 1967 the respondents sold 40 packets of Amul Cheese to Messrs Empire Stores for a sum of Rs. 139.20p. Each of the said 40 packets contained ten cheese cubes or chaplets, each weighing 25 grams, packed in aluminium foils. In their cash memo in respect of the cheese so supplied to Messrs Empire Stores the respondents added a sum of Rs. 6.96p. for sales tax at the rate of 5 per cent and Rs. 4.80p. for general sales tax at the rate of 3 per cent. Thus, according to the said cash memo the respondents charged and collected from M/s. Empire stores sales tax and general sales tax on the basis that these cheese cubes were taxable under entry 6 of Schedule E to the said Act.
3. At the relevant time the said entry 6 provided as follows :
Serial Description of goods Rate of sales Rate of general
No. tax sales tax
6. Foodstuffs and food provisions Five paise Three paise in
of all kinds (including dried in the rupee. the rupee.
fruits and dried vegetables; raw,
semi-cooked, Semi-processed or
ready to serve foods; pickles,
sauces, jams, marmalades, jellies,
preserved fruits and honey) when
sold in sealed containers of
weight not exceeding
five kilograms in each container,
but excepting whole, separated or
reconstituted milk, milk-products,
as specified in entry 6 in Schedule
D, edible oil and salt.'
Messrs Empire Stores, however, contended that the cheese sold to them did not fall under the said entry 6 but under the residuary entry 22 of Schedule E to the said Act and was, therefore, liable to sales tax and general sales tax at the rate of 3 per cent according to the said entry 22 as it then stood. In view of this contention raised by Messrs Empire Stores, the respondents applied to the Commissioner of Sales tax on September 25, 1967 under S. 52 (1)(e) of the said Act for determining the rate of tax payable on the said sale ............... Samples of cheese cubes sold by the respondents to Messrs Empire Stores were produced before the Commissioner of sales tax at the date of hearing of the said application. The respondents contended before the Commissioner of Sales tax that the said cheese cubes were sold in packets and not in sealed containers. While this application was pending before the Commissioner of sales tax the respondents, after obtaining information from the manufacturers, namely, the said Kaira District Co-operative Milk Producers' Union, by their letter dated November 22, 1967 inter alia stated that the cheese cubes sold by the respondents were coated with heat-sealed foils. According to the said letter, this was done in order to prevent contamination and further prevent air from coming in contact with the cheese and causing spoilage. There is no dispute that the ten cheese cubes or chaplets which were sold in cardboard cartons were packed in aluminium foils which were heat sealed and normally in order to remove the aluminium foils the foils will have to be torn off. It also appears that this process of heat sealing was not perfect in actual practice and, therefore, in some ... cases the aluminium foils could be removed without tearing. By his order dated March 27, 1968 the Commissioner of sales tax held that the processed cheese, namely, the cubes of processed cheese, were sold in sealed containers and that each of the said cubes of chaplets could be classified as goods in sealed containers. He further held that the fact that the ten packets of such chaplets were sold in one open cardboard carton would not make any difference. In arriving at his decision the Commissioner of sales tax purported to rely upon the decision of the Supreme Court in Commissioner of Sales Tax, U.P. vs. G. G. Industries, Agra. Against this order of the Commissioner of Sales tax the respondents filed an appeal to the Sale tax Tribunal. By its order dated December 6, 1968, the Tribunal held that the tin foils in which these cubes or chaplets were packed could not be said to be a container, and accordingly the sale by the respondents to Messrs Empire Stores was taxable under the residuary entry 22 of the said Schedule E and not under entry 6 of the said Schedule. The Tribunal took the view that for an article to be a container it should have a separate existence from the thing contained, as otherwise any cloth or paper if wrapped round an article would also have to be classified as a container.
4. Being aggrieved by the said decision of the Tribunal the Commissioner of Sales tax applied to the Tribunal for stating the case to this High Court. This reference application was dismissed by the Tribunal on November 28, 1969. Thereafter the Applicant applied to this High Court for directing the Tribunal to state the case and refer to the High Court for its opinion the following question :
'Whether, on the facts and in the circumstances of this case, the Tribunal was correct in law in holding that 'Amul processed cheese sold in packets' sold by the respondents under the cash memo dated 24th August 1967 fell under entry 22 of Schedule E and not under entry 6 of that Schedule attached to the Bombay Sales Tax Act, 1959 ?'
This application was admitted and a rule issued, and when this rule reached hearing it was made absolute by consent on January 11, 1971. Thereafter the Tribunal stated the case and has referred to this High Court the following question :
'Whether, on the facts and in the circumstances of this case, the Tribunal was correct in law in holding that 'Amul processed cheese sold in packets sold by the opponents (appellants in the Appeal No. 47 of 1968 decided by the Tribunal on 6th December 1968) under the cash memo dated 24th August 1967 fell under entry 22 of Schedule E and not under entry 6 of that Schedule attached to the Act ?'
5. We, however, feel that the wording of the question as set out in the said application to the High Court for directing the Tribunal to state the case, and on which the rule was issued and by consent made absolute, is happier than the language used by the Tribunal in its referring order, and we, therefore, propose to answer the question as framed in the said application for reference which we have set out above.
6. The arguments before us have revolved round the true meaning to be given to the word 'container' in the said entry 6 of Schedule E to the said Act. There is no argument advanced before us that the fact that ten cheese cubes or chaplets were sold in an open cardboard carton would mean that the processed cheese was not sold in sealed containers. That argument had been rejected both by the Commissioner of Sales tax and the Tribunal, and in our opinion it was rightly rejected. The Commissioner of Sales tax and the Tribunal have also rejected the argument based on the fact that the heat sealing process by which the aluminium foils were sealed was not perfect, and in some cases the aluminium foil could be removed without tearing it off. This argument too has not been urged before us. Thus, the sole question which remains to be decided is whether the tin foils in which these cheese cubes are packed with or which the cheese cubes are coated with can be said to be a container. If it is a container, then by reason of the fact that it is heat sealed, it would be a sealed container, and the goods would be taxable under the said entry 6. If it is not a container, then there is no dispute that the goods would be taxable under the said entry 22. So far as the reliance placed by the Commissioner of sales tax in his order upon the judgment of the Supreme Court in Commissioner of Sales Tax, U.P. vs. G. G. Industries, Agra, referred to earlier, is concerned, the Tribunal has pointed out that in that case the question for determination by the Supreme Court was whether the polythene bags in that case when heat sealed could be said to be sealed containers or not, and the arguments turned upon what was meant by the word 'sealed' and that there was no dispute as to whether cellophane covers in which goods were packed in that case were containers. Before us no reliance has been placed on behalf of the Applicant upon this decision of the Supreme Court, and in our opinion rightly so as the point which falls for our determination did not fall to be decided in that case.
7. Mr. Cooper, learned Counsel for the Applicant, has referred us to the definition of the word 'container' given in Webster's Third New International Dictionary at page 491 of Volume I. The said definition is as follows :-
'one that contains as, a : a receptacle (as a box or jar) or a formed or flexible covering for the packing or shipment of articles, goods, or commodities, b : a portable usu. metal compartment in which freight is placed for convenience of movement esp. on railroad container cars'.
Relying upon this definition Mr. Cooper submitted that even a flexible covering can be a container and it was not necessary that the container should have a form shape or a separate identity. According to Mr. Cooper, though these aluminium foils, when in the form of sheets, were not containers, once they were out and coated on the cheese cubes or the cheese cubes packed in them they would become containers. According to Mr. Cooper, whenever one thing contained another, that thing was a container. We are not able to accept the broad meaning of the word 'container' which Mr. Cooper has urged before us. In our view, the word 'container' used in said entry 6 refers to an article which is meant or intended for keeping some goods in it. It is intended to refer to a piece of paper or a piece of cloth or a tin, aluminium or silver foil with which another article can be wrapped. The dictionary meaning relied upon by Mr. Cooper itself shows that the primary meaning of the word 'container' is something that contains, such as a receptacle, and the illustrations given are those of a box or jar. These are articles which are normally intended for containing, other goods. The flexible covering mentioned in the definition given in Webster's Dictionary refers to flexible containers as a paper-bag or a cellophane bag or a polythene bag and not to a piece of paper or a piece of cloth or a sheet of aluminium, tin or silver foil. In this connection, it will be useful to look to the definition of the word 'wrapper' as given in the same dictionary in Volume II at page 2639. That dictionary inter alia defines 'wrapper' as meaning :
'1. that in which something is wrapped : a price of material formed into a wrapping for a parcel, or article (candy) (coin) : as a : a tobacco leaf used for the outside covering of plugs, twists, and esp. cigars .... :(3): a paper wrapping around a finished book covering it entirely and usu. having sealed ends'.
Even the verb to 'contain' would show that a container must be something which is intended to hold or contain something else. The Concise Oxford Dictionary defines the verb to 'contain' as meaning to 'Have, hold as contents'. Webster's Dictionary relied upon by Mr. Cooper gives, so far as we are concerned, the meaning of the verb to 'contain' as 'to have within HOLD (the boxed only some old papers and a few odds and ends') and the ordinary sense in which these words are understood show that a container is a receptacle of a defined shape or flexible in form for putting other things into it. It must be something which is recognized and is recognizable as a container. Nobody looking at a piece of paper or a piece of cloth or a sheet of aluminium or tin or silver foil would ever think of them as containers. A container must be an independent unit or a separate entity by itself. It must be such before some other goods are put in it. It cannot become a container after some other goods are put in it. So far as the aluminium foils with which we are dealing with in this Reference are concerned, it is not disputed that unless and until it is coated on to the cheese cubes, it has no definite form or shape, except that of a thin flat sheet, and it is only when it is coated on to the cheese cube that it takes the shape of that cheese cube. We, therefore, hold that the Tribunal was right in coming to the conclusion that these aluminium foils in which the cheese cubes were packed were rot containers and, therefore, the goods sold by the respondents were not taxable under entry 6 of Schedule E but were taxable under entry 22 of Schedule E to the said Act.
8. For the reasons stated above, we answer the question submitted to us in the affirmative.
9. At the time when the rule issued on the application for reference made to this High Court by the respondents was by consent made absolute, the costs of the said application were made costs in the Reference. Accordingly, we order the Applicant to pay to the respondents Rs. 550 by way of costs of this References which will include the sum of Rs. 250 being the costs of the said application for reference.