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Commissioner of Sales Tax Vs. Swadeshi Cotton and Flour Mills Ltd. - Court Judgment

LegalCrystal Citation
SubjectSales Tax
CourtMadhya Pradesh High Court
Decided On
Case Number Miscellaneous Civil Case No. 359 of 1976
Judge
Reported in[1980]46STC138(MP)
AppellantCommissioner of Sales Tax
RespondentSwadeshi Cotton and Flour Mills Ltd.
Appellant Advocate K.L. Goyal, Adv.
Respondent Advocate G.P. Bhargava, Adv.
Cases ReferredPatel Volkart Pvt. Ltd. v. Commissioner of Sales Tax
Excerpt:
- indian penal code, 1890.sections 307 & 324: [lokeshwar singh panta & b.sudershan reddy,jj] assault proof - appellant allegedly dealt sickle blow to deceased - testimony of eye-witnesses showed that sudden altercation ensued between appellant and deceased - no evidence to indicate any previous enmity between parties - single blow of sickle had been inflicted by appellant on back of deceased - incised wound allegedly inflicted by appellant - however opinion of doctor proved that deceased had not died due to direct result of said injury held, appellant is therefore liable to be convicted under section 324 of i.p.c., sentence of 3 years imprisonment reduced to period undergone by appellant considering mental agony suffered by him.....its opinion :whether, in the facts and circumstances of the case, the finding that there was no implied sale of the packing material along with the sale of bales of cloth and yarn was justified ?2. the material facts giving rise to this reference, as set out in the statement of case, are briefly as follows : the assessee, m/s. swadeshi cotton and flour mills ltd., indore, is engaged in the business of manufacture and sale of cotton textile, yarn, etc. the assessment year in question is the calendar year 1962, the gross turnover of the assessee was determined at rs. 2,16,07,478, which included the sale of 23,684 bales of cloth for rs. 1,91,03,718. as the bales of cloth were packed with bardana and iron hoops, the assessing authority held that there was an implied sale of bardana and.....
Judgment:

G.G. Sohani, J.

1. This is a reference under Section 44(1) of the M. P. General Sales Tax Act, 1958, hereinafter called the Act, made by the Board of Revenue at the instance of the Commissioner of Sales Tax. The following question of law has been referred to this Court for its opinion :

Whether, in the facts and circumstances of the case, the finding that there was no implied sale of the packing material along with the sale of bales of cloth and yarn was justified ?

2. The material facts giving rise to this reference, as set out in the statement of case, are briefly as follows : The assessee, M/s. Swadeshi Cotton and Flour Mills Ltd., Indore, is engaged in the business of manufacture and sale of cotton textile, yarn, etc. The assessment year in question is the calendar year 1962, The gross turnover of the assessee was determined at Rs. 2,16,07,478, which included the sale of 23,684 bales of cloth for Rs. 1,91,03,718. As the bales of cloth were packed with bardana and iron hoops, the assessing authority held that there was an implied sale of bardana and iron hoops and assessed 'them to tax at the rate of Rs. 2.50 per bale for bardana and Rs. 1.50 per bale for iron hoops. The assessee also sold yarn in 1,993 bales packed in bardana. The price of patti and bardana was disallowed from the claim for deduction under Section 2(r)(iv) of the Act. Aggrieved by the order of assessment, the assessee preferred an appeal before the Deputy Commissioner of Sales Tax, who upheld the finding of the assessing authority that there was an implied contract to sell the packing materials. The assessee then preferred a second appeal. The contention of the assessee before the Board was that there was no contract to sell hessian cloth and iron hoops which were used as packing material for cloth and yarn, and that the price stipulated for the cloth and yarn was by meterage or weightage. On behalf of the assessee, reliance was placed on the decision reported in Binod Mills Co. Ltd. v. Commissioner of Sales Tax, M.P. 1971 M.P.L.J. 1009. The learned Member of the Board of Revenue held that there was no implied sale of the packing material in view of the decision of this Court in Binod Mills Co. Ltd. v. Commissioner of Sales Tax 1971 M.P.L.J. 1009. At the instance of the Commissioner, the Board has referred the aforesaid question of law to this Court for its opinion.

3. The learned counsel for the Commissioner contended that the Board erred in relying upon the decision in Binod Mills Co. Ltd. v. Commissioner of Sales Tax 1971 M.P.L.J. 1009, without setting aside the findings given by the Deputy Commissioner. The learned counsel then referred to the decisions reported in Patel Volkart Pvt. Ltd. v. Commissioner of Sales Tax 1972 M.P.L.J. 221 and Bhagwandas v. Commissioner of Sales Tax 1978 M.P.L.J. 334, and contended that in view of these decisions it must be held that the Board had erred in holding that there was no implied sale of the packing material along with the sale of cloth bales.

4. Having heard the learned counsel for the parties, we have come to the conclusion that this reference must be answered in favour of the assessee and against the department. As regards the grievance that the Board had not given any clear findings, all that we can say is that no such grievance can be made in view of the question referred to us. That question is based on the assumption that there was material before the Board for giving a finding and that finding was accordingly given by the Board that there was no implied sale of the packing materials. In point of fact, the question referred to this Court is a question of fact. The burden was on the department to prove that there was an implied sale of the packing materials. In the instant case, it was not disputed that there was no express agreement for the sale of the packing materials. The assessing authorities had not found that price was separately charged for the packing material. The contention advanced on behalf of the assessee before the Board that the price charged by the assessee for the cloth was either on the basis of meterage or on the basis of weightage was impliedly upheld by the learned Member as he relied upon the decision reported in Binod Mills Co. Ltd. v. Commissioner of Sales Tax 1971 M.P.L.J. 1009, where a similar finding had been given. It must, therefore, be held that the Board had found that the burden to prove that there was sale of the packing material was not discharged by the department. In our opinion, therefore, the Board rightly relied upon the decision reported in Binod Mills Co. Ltd. v. Commissioner of Sales Tax 1971 M.P.L.J. 1009 for coming to the conclusion that there was no implied sale by the assessee of the packing materials.

5. The decisions reported in Patel Volkart Pvt. Ltd. v. Commissioner of Sales Tax 1972 M.P.L.J. 221 and Bhagwandas v. Commissioner of Sales Tax 1978 M.P.L.J. 334, on which reliance was placed by the learned counsel for the department, are distinguishable on facts. From the facts stated in the decision in Bhagwandas v. Commissioner of Sales Tax 1978 M.P.L.J. 334, it is clear that the Tribunal in that case had found that the price of the packing material had been taken into account in fixing the price of the goods sold. Similarly, in Patel Volkart Pvt. Ltd. v. Commissioner of Sales Tax 1972 M.P.L.J. 221, the Tribunal had found that the contract entered into by the assessee in that case made it obligatory to supply cotton with the packing material. In the instant case, no such finding was arrived at by the Board. In these circumstances, it must be held that, on the facts and in the circumstances of the case, the Board was justified in holding that there was no implied sale of the packing material along with the sale of bales of cloth and yarn.

6. The reference is accordingly answered in the affirmative and against the department. In the circumstances of the case, the parties shall bear their own costs of this reference.


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