K. Bhaskaran, Ag. C.J.
1. The question of law that falls for decision in all these tax revision cases relates to the tax applicable to the value of containers included in the sales turnover of coconut oil and oilcake sold inter-State. The reference to facts, for the purpose of discussion, would be to those relating to T. R. C. No. 46 of 1984.
2. For the assessment year 1978-79 the assessing authority assessed the value of containers at 4% where the sale was covered by valid C forms, and at 10% where it was not supported by valid C forms. On appeal by the assessee, the Deputy Commissioner (Appeals) held that since the value of the contents, that is, coconut oil and oilcake, sold inter-State, was taxed only at 1%, the value of the respective containers was also taxable at 1% only. The Revenue and the assessee appear to have agreed before the Deputy Commissioner (Appeals) that there had been a transfer of containers along with the contents. The only point in issue was, whether the value of the containers (tins and gunnies) was to be taxed at 1% as in the case of the contents (coconut oil and oilcake), as held by the Deputy Commissioner (Appeals) or at 4% where the sale was covered by valid C forms and at 10% where it was not supported by valid C forms as assessed by the assessing authority. The appeal filed by the Revenue against the decision of the Deputy Commissioner (Appeals) having been dismissed by the Appellate Tribunal, these tax revision cases have been filed.
3. Sale as defined in Section 2(xxi) of the Kerala General Sales Tax Act, 1963 (the Act) means 'every transfer whether in pursuance of a contract or not of the property in goods by one person to another in the course of trade or business for cash or for deferred payment or other valuable consideration....' As already noticed, the parties are in agreement with the proposition that the property in the containers was transferred to the buyer along with the contents. There appears to be no document indicating whether the containers were separately charged. In the absence of any documentary evidence, an inference could be drawn that the containers were used only as a cheap vehicle for the transport of the goods, and no value was charged separately for them. The question as to whether in a given circumstance the containers would attract tax, and if so at what rate, is essentially a question of fact, depending upon various circumstances like the existence of or otherwise of an agreement for sale thereof, whether they retained their physical or commercial identity after the contents were removed, whether separate bills have been made out for the containers or there was separate itemising in the bill made out for the goods, what its value in proportion to the goods is, etc. None of these factors by itself would be decisive of the question, though each one of them might be helpful to understand the nature of the transaction.
4. Section 5A of the Act reads as follows :
5A. Levy of purchase tax.-(1) Every dealer who in the course of his business purchases from a registered dealer or from any other person any goods, the sale or purchase of which is liable to tax under this Act, in circumstances in which no tax is payable under Section 5, and either-
* * * *(c) despatches them to any place outside the State except as a direct result of sale or purchase in the course of inter-State trade or commerce, shall, whatever be the quantum of the turnover relating to such purchase for a year, pay tax on the taxable turnover relating to such purchase for that year at the rates mentioned in Section 5.
5. The submission made by the Government Pleader appearing for the Revenue is that inasmuch as the tins and gunnies were not goods of insignificant value, which could be discarded after the contents were removed from those containers, they had to be valued separately and tax paid at the rate at which they were to be charged under Section 5 of the Act. On the other hand, the respondent-assessee contended that it was common knowledge that as a trade practice coconut oil and oilcake used to be sold in containers, as practically it was impossible to transfer those goods without a container; and that normally, in such cases the consideration for the containers, which were cheap vehicles for the conveyance of the contents, would not enter the mind of the parties contracting to sell or buy the goods.
6. In Varasuki & Co. v. Province of Madras  2 STC 1, a Division Bench of the Madras High Court held that exemption of salt from sales tax could not be relied on for the purpose of claiming exemption for the gunny bags in which salt was packed on the ground that salt could not be sold except after being put into gunny bags. This position, as already noticed, is seen to have been accepted by the assessee also. The assessee's stand is that he should be made liable only at the rate at which the contents were charged; not that the value of the containers should not be subjected to tax. Almost the same is the view taken by the Madhya Pradesh High Court in the decision reported in Govindram Ramprasad of Indore v. Assessing Authority  8 STC 407 wherein the question was whether the tins in which kerosene was' sold would be exempt from sales tax when kerosene was an exempted commodity under the Madhya Bharat Sales Tax Act, 1950. The view taken was that unless there was specific exemption of the container from sales tax along with the commodity it contained, tax on the container could not be avoided.
7. In Srinivasa Pal v. Sales Tax Appellate Tribunal, Trivandrum  12 STC 80, a Division Bench of this Court took the view that the exemption under Section 5(vi) was only in respect of sale of foodgrains and that when foodgrains were packed in gunny bags, the gunny bags did not lose their physical or commercial identity and that they formed part of the foodgrains themselves. There might, however, be cases where sale of packing materials was not casual, and the assessees were dealers of packing materials as well, as has been held by the Madhya Pradesh High Court in Patel Volkart Private Ltd. v. Commissioner of Sales Tax, M. P.  29 STC 515 with respect to sale of cotton bales by the assessee to various mills. In that case, under the agreement of sale of cotton bales, it was obligatory on the part of the assessees to deliver the cotton to the purchaser fully pressed in the form of bales along with the packing materials. In that case, on the facts and in the circumstances, it was held that there was an implied contract of sale of packing materials along with the sale of cotton bales.
8. This Court in Titshar Trading Co. v. State of Kerala  28 STC 214 on the facts of the case had held that the subject-matter of the contract of sale was only the contents, and that the packing materials did not form part of the bargain at all, the container having been used only as a cheap vehicle of transport.
9. In a more recent decision, a Division Bench of this Court in Moncompu Egg Store v. State of Kerala  48 STC 518 held that packing materials for the transport of eggs in inter-State commerce was liable to be taxed only at the rate at which contents were to be charged. Speaking for the Bench, Subramonian Poti, (Ag.) C. J., in paragraph 5 of the judgment stated as follows:
5. When parties enter into an agreement for sale or purchase and that requires despatch either by rail or by road normally goods requires to be packed and the nature of the packing will depend upon the commodity dealt with. In such cases parties normally contemplate the supply of the goods in the form in which they ought to move properly packed. There is no case for the department that the parties to the contract for sale of eggs contemplated sending the eggs without packing. In fact it is submitted by the Government Pleader himself that the bills show packing charges also. That indicates the intention of the parties that the goods should be despatched properly packed. In such a case even though the agreement does not particularly spell out the transfer of property in the packing materials it goes without saying that the property passes along with the goods sold. Packing materials by themselves may not be of value to the purchaser and so long as parties do not contemplate return of the packing material it is implied in the terms of sale that the purchaser of the eggs obtains the property in such packing material. It is by reason of the performance of the contract by the assessee in selling the eggs to the purchaser that the property in the goods in the form in which it reaches the purchaser passes to him. Therefore, there is a sale of the packing materials. If so, Section 5A(1)(c) applies in terms.
10. The Government Pleader appearing for the Revenue, however, submitted that the decision in Moncompu Egg Store v. State of Kerala  48 STC 518 had been rendered without noticing the principle laid down by the Full Bench of this Court in Deputy Commissioner of Sales Tax v. Raja Oil Mills  43 STC 78 (FB). We have carefully gone through the Full Bench decision; and we find that the Division Bench did not lay down any proposition which deviates from or opposed to what has been emphasised by the Full Bench in the case referred to above. The Full Bench on the facts of the case found that the Tribunal had not considered the question whether there was sale of the container in all its facets; on the other hand, the Tribunal was found to have proceeded on an alleged admission made by the Revenue that the value of the containers was substantial-an admission which was disowned by the Government Pleader, and which, the Court was inclined to think as inconceivable in the circumstances. What the Full Bench highlighted, as far as we could see, is the principle laid down by the Supreme Court in Hyderabad Deccan Cigarette Factory v. State of Andhra Pradesh  17 STC 624 (SC) which reads as follows :
Whether there was an agreement to sell the packing materials is a pure question of fact and that question cannot be decided on fictions or surmises. That is what has happened in this case. The Commercial Tax Officer invoked a fiction; the Assistant Commissioner of Commercial Taxes relied upon the doctrine of 'finished product; the Appellate Tribunal relied upon surmises; and the High Court, on the principle of implied agreement. But, none has tackled the real question. The burden lies upon the Commercial Tax Officer to prove that a turnover is liable to tax. No doubt he can ask the assessee to produce the relevant materials; and if he does not produce the same, he may draw adverse inference against him. But, he must decide the crucial question whether the packing materials were subject of the agreement of sale, express or implied. To ascertain the said fact he can rely upon oral statements, accounts and other documents, personal enquiry and other relevant circumstances such as the nature and the purpose of the packing materials used.
11. Now coming to the facts of this case, the State does not have a case that the dealer sold the goods in the form of tins and gunnies separately and independent of coconut oil or oilcake, for which alone there was a contract of sale. The assessing authority did not find that the facts justified an inference of an implied contract for sale of tins and gunnies so as to attract sales tax. The facts of this case would go to show that the contract of sale is necessarily a composite contract of sale of the contents in containers, for, oil and oilcake could not have been sold or conveyed without tins and gunnies. The seller used the tins and gunnies only as a vehicle of convenient transport of goods purchased. Thus, the transfer of the property in the packing material was an unavoidable concomitant of the sale of oil and oilcake and its transfer was without any intention even impliedly to sell tins and gunnies separately. What emerges from this discussion, therefore, is that, on the facts found, in the present case, the value of the containers could not have been subjected to sales tax at a rate higher than that was applicable to the value of the contents thereof.
12. The result, therefore, is that we uphold the view taken by the Tribunal that on the facts and in the circumstances of the case, the value of tins and gunnies included in the turnover of the containers should be subjected to tax at the same rate as was applicable to the contents.
13. We notice that the Appellate Tribunal has remanded the matter to the first appellate authority to decide whether the value of the containers could be ascertained; and, if so, whether the estimate made by the assessing authority is reasonable or not. That has to be so; and we do not think that any interference is warranted at our hands with respect to this direction.
14. The revisions are accordingly dismissed; however, in the circumstances of the case, without any order as to costs.