M.R.SHARMA,J. - (1.) THIS judgment will dispose of C. W. Nos. 2389, 2390, 2610 and 4489 of 1973, and Nos. 6 to 9, 295, 470 and 1281 of 1974, as common questions of law arise in all of them.
(2.) FOR facility of reference, the facts giving rise to Civil Writ No. 2390 of 1973 may briefly be stated as under. The petitioner is a partnership firm of the name and style of Messrs. Saddana Sugar Company, Kesar Ganj, Ludhiana (hereinafter called the petitioner-firm ). It is a registered dealer under the Punjab General Sales Tax Act, 1948 (hereinafter called the Act), and was granted registration on 6th May, 1971, to be effective with effect from 8th May, 1971. The firm deals in vegetable ghee and sugar only. For the assessment period, i. e. , 8th May, 1971, to 31st March, 1972, the petitioner-firm filed returns showing the total sales conducted by it at Rs. 43,89,682. 57. The Assessing Authority vide its order dated 15th June, 1973, (annexure A) allowed certain deductions in respect of vegetable ghee and imposed sales tax at the rate of 6 per cent on Rs. 34,233 as the price of bardana in which sugar had been sold by the petitioner firm. The Assessing Authority had relied upon a judgment rendered by Shri I. C. Puri, Presiding Officer, Sales Tax Tribunal, Punjab, in Appeal No. 75 of 1972-73 (Amar Nath Shambhu, Ludhiana v. The State) decided on 6th June, 1973. The learned Tribunal was impressed by the fact that in the accounts the sugar was shown in bags and not in quantity by weight which showed that the selling of bags along with sugar was a part of the transaction of sale. It is this order of the Assessing Authority dated 15th June, 1973, (annexure A), which is being challenged in these proceedings. Under the Act, the incidence of taxation is the sale of goods. It is trite to say that to constitute a transaction of sale there should be an agreement, express or implied, relating to goods to be completed by passing of title in these goods for money consideration. The principal thing to be determined, therefore, is whether the petitioner-firm did sell expressly or by implication the packing material for a consideration or not. The question posed above is one of fact and has to be determined by the authorities on a consideration of all the attendant circumstances. According to the petitioner-firm sugar was a tax-free commodity and while making the sale of the bags of sugar it did not charge the price of the bags in which the sugar was contained. The respondent, on the other hand, has relied upon some extracts from the report of the Tariff Commission made in 1969, showing the break-up of cost elements of sugar. This reads as under : " Items/break-up of cost elements (A) Cane and related costs - (i) Cost of cane (including transport and harvesting ). (ii) Cess/purchase tax Total (A) (B) Conversion charges - (a) Cane development expenses at cane centres. (b) Salaries and wages. (c) Power, fuel and stores. (d) Repairs and maintenance. (e) Other overheads. (f) Depreciation. (g) Packing. Total (B) (C) Total (A) and (B) (D) Less credits for recoveries. Total cost. "
(3.) ON the basis of clause (g) relating to packing appearing under the head "conversion charges", it is submitted that the cost of packing material is included in the price of a bag of sugar. The wholesale dealer while purchasing sugar from the manufacturers pays the price of packing material and also realises the same when he sells the bags of sugar to the retail dealers. The controversy raised will have to be resolved on the basis of decided cases.;