S. Rangarajan, J.
1. In this writ petition under Article 226 of the Constitution, the petitioner, who manufactures crockery goods and has been registered as a dealer for the purpose of the Bengal Finance (Sales Tax) Act, 1941, as extended to the Union Territory of Delhi (hereinafter called the Act), seeks to quash the order of the Assistant Sales Tax Officer (respondent No. 2) dated 16th January, 1975, deleting certain items of packing materials, namely, nails, strips, packing cases, etc., from the registration certificate, which was issued to the petitioner under Section 7 of the Act (annexure P 1 is copy of the said certificate).
2. It seems passing strange that the petitioner was issued a show cause notice concerning such deletion in a cyclostyled form bearing Sl. No. 532 (copy of which is annexure P 6) directing that the petitioner should appear on 16th January, 1975, at 10.30 A. M, followed by the impugned order of deletion bearing Sl. No. 533 of the same date (copy of which is annexure P 7). The petitioner complains and, not without force, that when the petitioner's accountant Shri Des Raj Wadhwa had gone to the office of the Assistant Sales Tax Officer on 16th January, 1975, in connection with another matter, he was handed over the said show cause notice, and without giving any real occasion or opportunity to show cause, the impugned order was passed. It is further stated that it was remarked by the officer concerned (respondent No. 2) that the deletion was being made in pursuance of a policy decision and instructions issued by the Commissioner of Sales Tax (respondent No. 1). The allegations to this effect in the petition were attempted to be solemnly met in the affidavit filed by Shri Kasturi Lai, Assistant Sales Tax Officer, filed in opposition to this writ petition by an assertion that the petitioner had appeared and made its submissions, which were incorporated in the impugned order, and that the petitioner did not ask for any further time to enable it to make further submissions. In the rejoinder-affidavit of Shri Onkar Nath Joshi, partner of the petitioner-firm, the averments of Shri Kasturi Lal made contrary to those in the petition in this regard were again controverter coupled with the assertion that no opportunity was given to represent its case in a proper manner. One has only to look at two cyclostyled forms, which have been produced, in original, as annexures P 6 and P 7 and to notice their contents to reject the respondents' case of an opportunity having been given; it will be sufficient to refer to the following words, also cyclostyled, in annexure P 7, 'appeared and contended that the items were not erroneously allowed and should not be deleted, but the contention is not tenable; hence the items in question have thereforee been deleted w. e. f. 16.1.75'. The words quoted are in the cyclostyled form as well as the show cause notice itself, which is in the cyclostyled form, coupled with the successive Seriall Nos. 532 and 533 assigned to annexures P 6 and P 7, respectively, completely contradict the case in the return of the petitioner having been given a sufficient opportunity and its objections having been considered.
3. It is needless also to be detained by the circular said to have been issued by the Commissioner (R-1) (copy of which is annexed), which seems to give detailed instructions in the manner in which the assessing authorities should treat the packing materials. Shri B.N. Kirpal, the learned counsel for the petitioner, contended that such instructions in the matter of how the assessing authorities should exercise their quasi-judicial functions would not be consistent with the discharge by them of such functions and may amount to serious interference with the performance of those functions. It is needless, however, for the purpose of this petition to go into this aspect in the view I am taking.
4. It is stated by the petitioner that in the sales tax registration certificate granted to the petitioner-firm it was incorporated that the firm was entitled to purchase packing materials including nails, strips, packing cases, etc., after furnishing a declaration under Section 5(2) of the Act and that the firm had been making such purchase of packing material and ancillary items required for packing the products of the firm and was exempted from making payment of sales tax on the same. It is asserted that the products of the petitioner-firm are so delicate and fragile that they could not be moved from its place of manufacture unless and until they are properly packed for their being handled by labourers, employers, transporters or even customers; even the slightest negligence in handling them can cause damage and render the products useless for use. The firm had been including the cost of packing of crockeries/potteries in the cost of manufacture itself and this always formed part of the manufacturing expenses. The sale price of the goods is finalised and submitted to the excise department (they being an excisable item) only after calculating the total cost including the material required for packing. A representative copy of the price list of the various items (annexure P 3) has also been appended to the writ petition, wherein it has been clearly stated in column 5(f) that the packing charges have been included in the selling price. A representative copy of the bill issued to a customer has also been annexed as annexure P 4 to facilitate a comparison with the price list (copy of which is annexure P 2). Section 4(4)(d) of the Central Excises and Salt Act, 1944, as amended by Amendment Act No. 22 of 1973, provides that the value in relation to the excisable products shall include the cost of packing. But, it is stated for the revenue that this does not have any bearing on the interpretation of the various provisions of the Act. This is relevant, however, for showing that in accordance with the said provision the firm which has to pay the excise duties for the products in question has been adopting the practice of including the cost of materials for packing, etc., in the cost of the product. It is necessary at this stage to notice the relevant provisions of the Act, the Delhi Rules framed there under in 1951 and the concerned forms prescribed under the Rules. Under Section 5 of the Act, the tax payable by a dealer under the Act shall be levied on the basis of the taxable turnover, which expression has been defined by Section 5(2) as meaning:
that part of a dealer's gross turnover during any period which remains after deducting there from --
(a) his turnover during that period on --
(i) the sale of goods declared tax-free under Section 6; and
(ii) sale to a registered dealer of goods of the class or classes specified in the certificate of registration of such dealer, as being intended for resale by him, and for such use by him as raw materials in the manufacture in the Union Territory of Delhi of goods (other than those declared tax-free under Section 6) for sale inside Delhi, etc., and for containers and other materials for the packing of goods of the class or classes so specified.
5. Section 7, which deals with registration of dealers, provides in Sub-section (3) that if the authority is satisfied that an application for registration is in order, he shall, in accordance with such rules as may be prescribed, register the applicant and grant him a certificate of registration in the prescribed form, which shall specify the class or classes of goods for the purpose of Sub-clause (ii) of Clause (a) of Sub-section (2) of Section 5.
6. According to Rule 26, a dealer who wishes to deduct from gross turnover the amount in respect of sales on the ground that he is entitled to make such deductions under the provisions of Sub-clause (ii) of Clause (a) of Sub-section (2) of Section 5 of the Act, shall furnish along with the return under Section 10, a complete list of such sales, and shall, on demand, produce in support of such sales the declaration furnished in writing by the purchasing dealer or by a person duly authorised by him in writing in this behalf in the form and manner prescribed. There are two separate kinds of certificates, which the rule speaks of; for goods purchased for resale or for use as raw materials, which are specified in the registration certificate of the purchasing registered dealer and also a separate certificate for containers or other materials purchased for the packing of goods specified in the registration certificate of the purchasing dealer.
7. An application for registration under Section 7 (with which alone we are concerned) shall, according to Rule 3, be made to the appropriate assessing authority in form S.T. I. The particulars which such an application should contain have been specified in rule 4. Sub-rule (iii)(b) of rule 4 speaks of 'for use as raw materials in the manufacture in the Union Territory of Delhi of goods (other than goods declared tax-free under Section 6) for sale in the manner specified in Section 5(2)(a)(ii) of the Act' and (c) 'for containers or other packing materials'.
8. What the registration certificate should contain has been specified in Rule 6 as follows:
(1) The registration certificate shall specify the following amongst other particulars: --
(a) the location of the business and of any branch of the business;
(b) the nature of the business;
(c) the class or classes of goods, which may be sold to the dealer free of tax as being required either
(i) for resale, or
(ii) for use as raw materials in the manufacture in the Union Territory of Delhi of goods (other than goods declared tax-free under Section 6) for sale in the manner specified in Section 5(2)(a)(ii) of the Act.
9. Form S.T. I of the Second Schedule is the one to which Rule 3 makes reference, column 11 of which reads as follows:
The following classes of goods are ordinarily purchased by the business:
(a) for purposes of manufacture in the Union Territory of Delhi of goods (other than goods declared tax-free under Section 6 for sale in the manner specified in Section 5(2)(a)(ii) of the Act,
(b) for resale,
(c) for containers or other packing materials.
10. Form S.T. III pertains to the certificate of registration, column 2 whereof provides for the nature of the business being set out and column 3 of which reads as follows:
The sales of the following goods to this dealer will be free of tax:
(a) for use as raw materials in the manufacture in the Union Territory of Delhi of goods (other than goods declared tax-free under Section 6) for sale in the manner specified in Section 5(2)(a)(ii) of the Act,
(b) for resale.
11. I perused form S.T. I, in this case, dated 7th December, 1955, which mentions the business (column 2) as 'manufacturing pottery goods'. In column 3 the names and addresses of the proprietor were given and the address also was given as Palam Potteries. In columns 11 and 12, the following have been stated:
11. Quartz, felspar, marble, clay, Chemicals (all), press cloth, machinery.
12. Crockery and stoneware goods.
12. I also had a look at the original registration certificate issued under Section 7 of the Act (copy of which is annexure P 1), when the concerned file was produced by the revenue. Whereas in column 2 the business was mentioned as 'Manufacturing pottery goods' (to correspond with column 2 in form S.T.I), in column 3 of form S.T. III, which entitles 'The sales of the following goods to this dealer will be free of tax', there are two Sub-columns, (a) and (b); (a) on the left-hand side is entitled 'For purposes of manufacture' and (b) on the right-hand side is entitled 'For resale'. It may be noticed that there is no separate column in form B.T. III for packing materials and containers. The original form S.T. III in this case was originally issued for six items and four more items were added with effect from 4th November, 1963. On the right-hand side under the title '(b) for resale' the word 'Nil' had been noted, but had not been scored out. It was further added as follows (on the right-hand side):
'w. e. f. 18-1-62 1. Packing materials.
3. Packing cases and strips (3 items).
w. e. f. 4-11-63 4. Electrical goods.
5. Crockery (5 items).'
13. No application for amendment made by the petitioner which led to the inclusion of the packing materials, etc., with effect from 18th January, 1962, is found on the file. No statement, thereforee, is possible concerning what was mentioned in that application and how these items came to be added. No reasons have been mentioned in the impugned order for the deletion of the items in question from the certificate. One has only to look into the affidavit of Shri Kasturi Lal for an Explanationn concerning the circumstances in which the said deletion was made. It is worth recalling that in the show cause notice (annexure P 6) it is only mentioned that the aforesaid goods in the registration certificate were erroneously specified and that the same were neither raw materials nor goods intended to be resold. It is not the case of the petitioner that any crockery is being bought by it for the purpose of being resold. thereforee, this aspect need not detain us. It was denied in the return that the packing material is the raw material used in the manufacture of goods and that only those goods, which are required in the use of manufacturing of goods, could be allowed as per provisions of Section 5(2)(a)(ii), but the return does not deal with the crucial part of Section 5(2)(a)(ii), which deals with 'containers or other materials for the packing of goods of the class or classes so specified'.
14. Mr. R.C. Chawla, the learned counsel for the revenue, could not explain to me why the printed form S. T. III does not make any specific reference to packing material and containers in terms of Section 5(2)(a)(ii). He admitted that in respect of goods for resale the packing material and containers need not be specifically mentioned and, even so without being so mentioned in the certificate, the registration certificate-holder would be entitled to the benefit of purchasing the containers or packing materials also in the case of goods for resale without the same being specifically mentioned in the certificate. He could not, however, satisfactorily meet the point raised by Mr. B.N. Kirpal as to how the same should then have to be specified, especially on pain of such benefit not being available if not so specified in respect of goods, which are manufactured. That there is no separate column in the registration certificate inconsistent with what Section 5(2)(a)(ii) says: that the containers go into goods for resale as well as goods manufactured for sale. An intention to make the registration certificate contrary to the section can hardly be imported. Per contra the form of registration certificate has only to be read in consonance with the section and as carrying out the purposes and intentions of the section. Mr. Chawla's argument for the revenue that the packing material, etc., were mentioned in the registration certificate in respect of resale items only and they were cancelled since they need not be mentioned, seems to be one of despair. The true position, however, seems to be that containers and packing materials mentioned in Section 5(2)(a)(ii) applied even to goods for resale as well as those manufactured for sale.
15. Mr. B.N. Kirpal's contention derives support from the observations of Basu, J., in Dabur (Dr. S.K. Barman) Pvt. Ltd. v. Commercial Tax Officer, Bhowanipore Charge, and Ors.  19 S.T.C. 447. While holding that only goods which are directly necessary for the manufacture of finished products, which would come within the purview of Section 5(2)(a)(ii) and not those which were indirectly necessary, Basu, J., pointed out that there are two parts of Section 5(2)(a)(ii): (1) those which are used in the manufacture of the finished products and (2) materials for packing of such products. Regarding the latter they stood out as an independent category. In the case before Basu, J., the business concern was one of manufacturing patent and proprietary medicines and toilet goods, etc., and the discussion centered round the materials for packing of goods like paper and ink. Paper and ink had been deleted by the assessing authority from the registration certificate for the following reasons:
Moreover a careful reading of the section will reveal that even the packing materials required for packing the finished product cannot be purchased tax-free under this section because the finished products are not the goods specified in the registration certificate as intended for use in the manufacture.
16. The assessing authority (in that case the revising authority) had assumed, without deciding, that paper and ink used by that firm in whole or in part for packing the finished products sold by it, were mentioned in the certificate as the goods which were sold by the petitioner. Nevertheless, the revising authority had rejected the claim for deduction on the ground that packing materials cannot be said to be intended for the 'manufacture' of the finished products. Basu, J., pointed out that, in saying so, the revising authority in that case had overlooked that the purchase of packing materials 'stood out as independent category'. He further observed as follows:
Assuming for the time being that paper and ink are not required for 'the manufacture' of the patent medicines, etc., it cannot be said that the purchase thereof are not to be deducted even though they are required for 'packing' the medicines, etc., the sale of which is the business of the petitioner and for which he has been registered as a dealer for purposes of the Sales Tax Act. Paper and ink could not be deleted from the certificate without considering this point. The reasoning of the revising authority relating to 'paper and ink' as packing materials, thus, constitutes an 'error apparent on the face of the record'.
17. The legal position as stated by Basu, J., with which I respectfully agree, is that the expression 'and' has been used before the reference to 'containers' etc.; containers, etc., may be required not only for goods intended for resale but also for goods which are manufactured for sale by the registered dealer as in this case. The learned counsel for the revenue made, it seems to me, a vain distinction between the wording of the statute, which Basu, J., had to consider, and the one, which falls for consideration in the present case, namely, the additional words 'for sale' occurring in the present statute being absent in that statute. From the passage quoted above (from p. 454), it is clear that Basu, J., even without those words in the statute before him, was construing the sale as having reference to the manufactured goods, the sale of which was the business of the petitioner. The manufacturer usually manufactures for sale and it is the petitioner's specific case, which is not disputed, that the crockery, etc., manufactured by it are for sale.
18. It was further argued for the revenue that the packing materials in this case were included in the registration certificate in respect of resale only and, since in respect of resale there is no need to specifically mention packing materials, they were deleted. In the first place, neither the show cause notice (annexure P 6) nor the order of cancellation (annexure P 7) mention the precise reason for the cancellation except that it is stated in annexure P 6 that the mention of those goods was erroneous with the further addition that these goods were neither raw materials nor intended to be resold. At one stage the learned counsel for the revenue urged that the petitioner had not applied for exemption in respect of the containers. Apart from this not being the stand taken in the return (the return even indicating a contrary stand), it is seen from the original application S.T. I (extracted above) that the packing materials had been included in column 11. In the circumstances, I do not wish to be detained further with the above argument, which was only feebly put forward.
19. The learned counsel for the revenue also referred me to the decision of my Lord the Chief Justice T.V.R. Tatachari (speaking for himself as well as on behalf of M.R.A. Ansari, J.), in Subheg Singh Gurbachan Singh v. Sales Tax Commissioner  37 S.T.C. 49, (L.P.A. Nos. 274 and 275 of 1972 decided on 7th March, 1975). I am unable to find any observations on which the respondent can rely. The portion on which he sought to place reliance related to the deletion of 'tyres and tubes' from column 3 of the registration certificate in the context of column 2 retaining the expression 'retail old motor parts'. My Lord the Chief Justice observed that it could not be contended that the firm, which had been registered as dealer in respect of retail old motor parts, would cease to be registered dealers qua tyres and tubes on the deletion of the said items from column 3 and that the firm should continue to be regarded as registered dealers in respect of tyres and tubes also, to whom the proviso in the notification, which was discussed, applied. These observations were made in the context of explaining a previous Division Bench decision rendered by T.V.R. Tatachari, J. (as he then was), in Fitwell Engineers v. Financial Commissioner  35 S.T.C. 66, (Civil Writ Petition No. 590 of 1973 decided on 26th April, 1974).
20. In the result, however, there having been no hearing of the petitioner nor even a finding on the question discussed, I have to adopt the same procedure that Basu, J., adopted in the above said case, namely, to quash the notice as well as the order of cancellation (annexures P 6 and P 7) and direct that a fresh finding be given on this point after issuing, if need be, a fresh show cause notice setting out precisely the stand of the revenue giving an opportunity to the petitioner and then decide the matter according to law as explained in this judgment.
21. The writ petition is accordingly accepted and the show cause notice as well as the order of cancellation (annexures P 6 and P 7) are quashed. The petitioner will be entitled to its costs. Counsel fee Rs. 250.