KISHOREBHAI KALIDAS PATEL AND CO. Vs. STATE OF ANDHRA PRADESH

JUDGEMENT

(1.) THE appeal has been filed against the order of the Deputy Commissioner (CT), Nizambad Division, dated 4.9.2001. The appellant has submitted that the revisional authority has erred in law and in fact in levying tax on the assumed sale of packing material, which was utilized by the appellant for packing beedies which are exempt from tax. According to the appellant, there are no two separate sales of beedies and packing material and the use of the said packing material is inseparable and integral part of the sale of beedies. The packing material utilized by the appellants was not separately charged from the customers and was essential for handling and transportation of the beedies. The value of the packing material utilized was also insignificant as compared to the total value of the beedies sold. U/s. 6C of the APGST Act, 1957 the packing material is liable to the same rate of tax as applicable to the contents whether or not there is a separate agreement to sell. Since the tax under the State Act is nil on beedies, no tax can be levied under the CST Act also. The appellant has also relied on the decision of the Sales Tax Appellate Tribunal in the case of M/s. Heeralal Prabhuram & Co., Nizamabad in T.A. Nos. 632/2000 & 633/2000, dated 26.11.2007. The learned State Representative has stated that he has nothing to add on facts.

(2.) HAVING heard both sides, the question that comes up for consideration before us is whether the sale of beedies which are exempt from tax the packing material can be taxed or not. Having gone through the record and having heard both sides and keeping in mind our own decision in T.A. Nos. 632/2000 & 633/2000, dated 26.11.2007, we are of the opinion that the facts of the present case are in pari -materia with the case relied on by the appellant. We feel that the revisional authority has not discharged the burden of proof either that there was a separate agreement for sale of packing material or that the packing material is not essential for the sale of beedies. There is force in the contention of the appellant that the intention was not to sell the packing material which is of negligible value as compared to the value of beedies, but to sell the beedies in their case. Beedies being fragile goods with a limited shelf life, we are of the opinion that it is essential for these goods to be packed in a way that will protect them from being damaged by wear and tear or elements of weather like rain, sunshine etc., while they are being transported from one place to other. We, therefore, hold as in the earlier T.A. Nos. 632/2000 & 633/2000, dated 26.11.2007 that in the present case also the packing material is not exigible to tax and the revisional orders need to be set -aside and are accordingly set -aside.