A.P. Sen, J
1. This is an application under Section 15(2)(b) of the Rajasthan Sales Tax Act, 1954 by the Commercial Taxes Officer, Beawar, requiring the Board of Revenue to refer the following question of law:
Whether under the facts and circumstances of the Board of Revenue was justified in holding that there was no implied sale of packing material even though snuff was sold as packed and the value of the container had also been taken into account for fixing the sales price
2. M/s. Magniram Hariram, Beawar, hereinafter referred to as the 'assessee', is engaged in the business of manufacture and sale of snuff. For the year 1968-69, the assessing authority found that the assessee sold snuff packed in the containers by way of inter-State sale to the extent of Rs. 3,38,871.56 P. The snuff (tobacco) was exempt from sales tax. The account books revealed that the containers in which the snuff was packed were worth Rs. 48,264.93 i.e., 15% of the sale price. The assessing authority held that the value of the packing material being very substantial, the sale of goods in the course of inter-State trade, involved an implied sale of packing materials. He accordingly, brought the tin containers, to tax @ 3% under the Notification dated 29-5-1967 issued under Section 8(5) of the Central Sales Tax Act, The tax so determined came to Rs. 1,447.95 P.
3. In appeal, the Deputy Commissioner (Appeals) held that there was no implied sale, observing:
The snuff is delivered to the purchasers in packed condition because it is likely to lose its flavour and utility. Without packing snuff cannot be properly handled or taken from one place to another. The appellant does not charge anything for the container in which snuff is packed. There is no express or implied sale.
He, accordingly, set aside the assessment. Being aggrieved, the department took up the matter in revision to the Board of Revenue, which was heard by a Single Member. The learned Single Member held that under the last proviso to Section 5 of the Rajasthan Sales Tax Act, 1954, packing material of the goods which are exempt from tax, is also exempt from tax and that it was not proved that the assessee had recovered any price for the tin containers. He, therefore, dismissed the revision.
4. In special appeal, a Division Bench of the Board of Revenue agreed with the interpretation of the last proviso to Section 5 of the Rajasthan Sales Tax Act in its earlier decisions viz., that where there was no rate applicable to the goods then no rate can apply to the packing materials also. The Division Bench did not specifically decide the point whether there was an implied sale of the tin, containers or not, but distinguished (1973) 31 STC 53 as not applicable.
5. In our opinion, the order of the Board of Revenue does give rise to a question. It is open to doubt whether the last proviso to section a of the Rajasthan Sales Tax Act, 1954, could be applied at all in making an assessment under the Central Sales Tax Act, 1956. It also failed to deal with the contention raised by the Revenue that there was an implied sale of the tin containers to the purchasers of the snuff and that, the value of the containers, which was substantial, had also been taken into account of fixing the sale price of the snuff and, therefore, the assessee was rightly assessed to tax, on the value of the containers.
6. The application for reference is, accordingly, allowed. The Board of Revenue is directed to draw up a statement of the case and refer the following question of law:
Whether, on the facts and circumstances of the case, the Board of Revenue was justified in holding that the containers were not taxable without considering whether there was implied sale or not