BALIA, J. - (1.) HEARD learned counsel for the petitioner.
(2.) NO one appeared for the respondent in spite of service. The petitioner Assistant Commissioner. Commercial Taxes Department, Sirohi challenges the order passed by the Rajasthan Tax Board, Ajmer on 8. 12. 98 in Appeal No. 781/96, by which the appeal of the revenue has been rejected against the order of Deputy Commissioner (Appeals), Commercial Taxes by which the levy of tax and interest on the value of packing material packed in which the goods manufactured by the petitioner were sold was set aside, and notice of demand for that amount has been quashed. The respondent assessee had set up a new industrial unit for manufacture of Granite Tiles. The new unit was exempted from payment of tax on the goods manufactured by it under the Sales Tax Incentive Scheme in 1987. Under the aforesaid scheme the entire turn over of Granite tiles, after allowing eligible deduction was subjected to assessment and amount of tax payable on the such turn over was adjusted against the limit of maximum quantum of tax benefit enjoyable by the unit under the aforesaid incentive scheme. However, the assessing officer was of the view that since only the sale of goods manufactured by the new unit was exempted and there was no exemption of sale of packing material, which was not manufactured by the new unit, but has been purchased by assessee as a exempted goods, is subject to tax under the last proviso of Section 5 (1) of the Rajasthan Sales Tax Act, 1954 at the same rate at which the goods manufactured by it has been sold. He accordingly levied tax on the amount of turnover attributable to sale of packing material and also levied interest thereon. This order was challenged by way of appeal before the Deputy Commissioner. The Deputy Commissioner (Appeal) found that no separate sale of packing material in isolation has been made but was inseperable from sale of tiles. Full consideration of the tiles manufactured by the new unit has been subjected to assessment of tax. The assessee, though has been exempted from payment of tax under the scheme, but is not exempted from assessment in respect of sale of manufactured goods. In view of this, neither the additional tax was leviable nor interest thereon was recoverable. The said order of the Deputy Commissioner (Appeals) has been affirmed by the Rajasthan Sales Tax Board. Mr. Johari learned counsel for the revenue urged that under the Incentive Scheme only the sale of goods manufactured by the new unit has been exempted u/s. 4 of the Act and therefore in view of the provisions of Section 5 prescribing rate of taxation, the packing material in which manufactured goods have been sold is liable to be taxed independently and therefore the assessee is liable to pay tax on sale of packing material which he had purchased without payment of tax. Having carefully considered the contention raised by the learned counsel and perused the provisions of the statute and heard. I am unable to reach the same conclusion as suggested by learned counsel. The relevant part of Section 5 reads as under:- " Section 5 (1) : The tax payable by a dealer under this Act shall be at such single point in the series of sales by successive dealers as may be prescribed and shall be levied at such rate not exceeding 75% on the taxable turnover, as may be notified by the State Government in the official Gazette. xxxxxxxxxxxxxx xxxxxxxxxxxxxx Provided also that when any goods are sold, packed in any material, the tax shall be leviable on the sale of such packing material, whether charged separately or not, at the same rate as is applicable to the sale of the goods themselves; and if the goods are exempted from tax under section 4 or have already been subjected to tax under the Act, then at the rate notified for such packing material from time to time".
(3.) ANOTHER relevant provisions that need be noticed is definitions of `turn over' and `taxable turn over. ' According to Section 2 (t) : " turnover" means the aggregate amount of sale prices received or receivable for a sale, transfer, delivery or supply by a dealer in any of the ways referred to in clause (O ). Explanation-Subject to such conditions and restrictions ; if any, as may be prescribed in this (i) xxxxxxxxxxxxxx (ii) the amount for which goods are sold or supplied shall include any sum charged for anything done by the dealer in respect of the goods sold at the time of or before the delivery thereof" Section 2 (s) defining taxable turnover reads as under:- Section 2 (s) : "taxable turnover' means that part of turnover which remains after deducting therefrom the aggregate amount of the proceeds of sale of (i) on which no tax is leviable under this Act, (ii) which have already been subjected to tax under this Act. (iii) which have been sold to persons outside the State for consumption outside the State; and (iv) which are taxable at a point of time sale within the State subsequent to the sale by the dealer and such sale is covered by a declaration as may be required under any provision of this Act or the rules made thereunder; Provided that where a dealer in goods which are exempted from tax unconditionally, selles any bardana, container or any other packing material received along with such goods at the time of purchase thereof by him, the taxable turnover in respect of such sales shall, at the option of such dealer to be exercised in the prescribed manner, be one percent of the aggregate amount of the sale prices received or receivable by him in respect of the sale or supply of such goods and of such goods and of such bardana container or material; Provided further that when any dealer has purchased any goods without paying any tax or after paying tax at concessional or reduced rate of tax on the strength of any declaration furnished by him under the Act and such goods are used by him for any purpose other than the one mentioned in the declaration, the purchase price of such goods shall be included in his taxable turnover subject to the tax already paid by him. ;