Sabyasachi Mukharji, J. - (1.) This is an application under Article 226 of the Constitution by Bhudharmull Ramchunder, a partnership firm, chal lenging a notice dated 15th January, 1971, asking the petitioner-firm to produce books of account with all the supporting documents, relevant final accounts and balance sheet for the period from 1st July, 1969, to 14th March, 1970, under Section 14(1) of the Bengal Finance (Sales Tax) Act, 1941.
(2.) The petitioner sells salt packed in gunny bags. According to the petitioner, the salt comes packed in gunny bags or loose and when the same comes loose, the quantities of salt are packed in gunny bags and sold as such. The petitioner states that no separate price is charged for the said bags which are used for packing of the salt. The petitioner further states that there was no express or implied agreement for sale of the gunny bags used for packing of salt with the parties to whom the salt was and/or is sold. Gunny bags are goods within the meaning of the Bengal Finance (Sales Tax) Act, 1941. So the question is whether the salt sold by the petitioner in gunny bags were liable to sales tax. If the gunny bags were sold and prices were charged for the gunny bags as such, then the petitioner was liable to pay sales tax. If, however, the gunny bags were not sold as such then the petitioner was not liable to pay sales tax. This is a question of fact to be determined in this case.
(3.) In the case of Commissioner of Taxes, Assam v. Prabhat Marketing Co. Ltd. [1967] 19 S.T.C. 84 (S.C.), the Supreme Court was dealing with hydrogenated oil. The dealer in that case was selling hydrogenated oil which was exempt from sales tax under the Assam Sales Tax Act, 1947. A question arose as to whether the value of the containers in which the hydrogenated oil was sold could be assessed to tax under the Act. The High Court held that the value of the containers was not assessable to sales tax unless separate price had been charged for the containers. On appeal the Supreme Court held that the value of the containers was assessable to sales tax under the Act if there was an express or implied agreement for the sale of such containers and the mere fact that the price of the containers was not separately fixed made no difference to the assessment of sales tax. The Supreme Court further held as to whether there was an agreement to sell packing material, is a pure question of fact depending upon the circumstances found in each case. Thereafter, it appears that, as a result of the said decision of the Supreme Court, the Public Relations Officer of Government of West Bengal, Directorate of Commercial Taxes, issued a circular drawing the attention of the trade circle to the aforesaid state of affairs and observed, inter alia, as follows : ...In this State the value of containers of goods, sales of which are exempted from tax under the provisions of law, were not so long being taxed under administrative instructions if the value of containers was not separately charged for. Since the Supreme Court has clarified the position now, it has been decided that in such cases tax should be charged on the value of containers even if such value is not separately charged for. But to avoid complications and hardship to the dealers it has been decided administratively not to give effect to the said decision in respect of transactions made before 1st July, 1969.;