Prakash Krishna, J. - (1.) The above revision has been filed by the Commissioner of Trade Tax against the order passed by the Trade Tax Tribunal, Muzaffarnagar in Second Appeal No. 194 of 1993.
(2.) The dealer/opposite party is carrying on the business of manufacture and sale of sugar, molasses and country liquor. The dispute in the present revision relates to the assessment year 1989-90, under the U.P. Sales Tax Act. In the memo of revision the following four points of law have been framed for determination (i)Whether the Sales Tax Tribunal was legally justified to hold that no tax is payable on sale of filter cloth used and poly propylene cloth despite the fact that the aforesaid commodities are taxable vide notification no. ST-II-5785 dt. 7-9-81 as old, discarded unserviceable or obsolete machinery, stores or vehicles including waste products except cinder, coal ash and such items as are including in any other notification issued under the Act @ 8% ? (ii) Whether the Sales Tax Tribunal was legally justified to set aside the tax imposed on pouching charges despite the fact Section 2 (h) of the U.P. Sales Tax Act indicates ? (iii) Whether the Sales Tax Tribunal was legally justified to declare non taxable, sale of gunny bags despite the fact that principles laid down by Hon'ble Allahabad High Court in Chhatta Sugar Company Limited v. CST (1991 UPTC-341) provides for tax on gunny bags as there was implied sale of aforesaid commodity? (iv) Whether the Sales Tax Tribunal was legally justified to hold that rice husk and paddy husk are two different commodities despite the fact that the Hon'ble High Court Allahabad has held otherwise in the case of Commissioner, Sales Tax v. Navin Traders Etawah (1973 UPTC- 215) ? Heard learned counsel for the parties and perused the record.
(3.) So far as question Nos. 3 and 4 are concerned, they stand concluded by various judgment of this Court. Question No. 3 relates to the taxability of packing material i.e gunny bags. The dealer/opposite party is manufacturer of sugar, which is exempt item from payment of tax under the U.P. Trade Tax Act. The said sugar has been packed and sold in gunny bags. It has not been found even by the assessing authority that any price has been charged by the dealer/opposite party for the gunny bags. A Division Bench of this Court in CTT v. L.S. Sugar Factory Ltd 2001 UPTC 107 has held that in view of Section 3 AB of the Act the packing material is liable to be taxed at the rate at which the goods which are packed in such material, is taxable. The sugar is exempted item under the Act and, therefore, the gunny bags which have been used as a packing material of sugar is also exempted. To the same effect there are other judgments such as Bajpur Cooperative Sugar Factory Ltd. v. CTT (2001) 31 STR 66, Chhata Sugar Company v. CST (2001) 34 STR 484. In view of these decisions it is held that the Tribunal was legally justified to hold that the sales of gunny bags are non taxable. Question No. 3 is decided accordingly.;