Sales Tax Commissioner, M.P. vs M/s. Jain and Company, Sagar

U.L. Bhat, C.J.

The following question of law has been referred to this Court by the Appellate Tribunal (Board of Revenue) at the instance of the Revenue u/s 44 (1) of the M. P. General Sales Tax Act, 1958. English rendering of the question will be as follows :

Whether in the facts and circumstances of the case, the Tribunal was justified in holding that bamboo creates are covered by Entry 15, Part-IV of Schedule II of the M. P. General Sales Tax Act, 1958, prior to 1.10.1978.

Assessee is a registered dealer. He purchases babmoos, makes bamboo creates out of the same and sells the creates. The assessment year is from 11.11.1977 to 31.10.1978. Goods used as containers and packing material are covered by Entry 15, Part-IV of Schedule II to the M. P. General Sales Tax Act, 1958 (for short the Act) and at the relevant time, the sales tax was at the rate of 5%. If bamboo creates do not fall under the above entry, they attract the residuary Entry in Pan - VI of Schedule II attracting sales tax at the rate of 10%, The Assessing Authority and the Appellate Authority held against the assesses and levied sales tax at the rate of 10%. The Tribunal, in further appeal, upheld the case of the assesses and held that sales tax was payable only at the rate of 5% till 1.10.1978 when a notification was issued specifying ''bamboo khan Chas'' as container of packing materials.

Entry 6 of Pan-IV of Schedule II. as it stood prior to 1978 till it was amended by Amending Act No. 25 of 1978. reads as follows.

Goods for use as containers and packing materials, that is to say-

(i) gunny bags and hessian;

(ii) jute twine;

(iii) cardboard boxes and cartons;

(iv) empty tins and empty barrels;

(v) wooden boxes (khokhas) and tin boxes;

(vi) empty bottles and corks;

(vii) polythene packing materials;

(viii) paper labels;

(ix) tine seals;

(x) paper bags;

(xi) Wooden frames;

(xii) Paper cones.

The entry was amended and definition ''packing material'' was introduced by inserting section 2 (jj) in the Act by Amending Act No. 25 of 1978 which came into effect on 1.10.1978 "Packing material" is defined as follows;

Tacking material'' means such containers or other materials used in the packing of goods for sale as are sped lied in Entry 15 of Part-IV of Schedule II.

Entry 6 was re-numbered as Entry 15, Clause (xi) was amended and clause (xiii) was inserted. Entry 15, as amended, reads thus;

Goods, for use as containers in packing material that is to say -

(i) gunny bags and hessian;.

(ii) jute twine;

(iii) card board boxes and cartons;

(iv) empty tins and empty barrels;

(v) wooden boxes (Khokhas) and tin boxes;

(vi) empty bottles and corks;

(vii) polythene packing materials;

(viii) paper labels;

(ix) tin seals;

(x) paper bags;

(xi) wooden reels and frames;

(xii) paper cones:

(xiii) such other goods as may be notified as containers or packing materials/

The position on or alter 1.10.1978 can admit of no doubt, Enty 15 deals with goods for use as containers and packing material. The expression ''packing material'' is defined as containers or those materials used in packing of goods for sale as are specified in Entry 15. The particular kind of goods, in order to be regarded as packing material on or after 1.10.1978, must fall within the description of the categories specified in Entry 15. The purpose of using the words "that is to say" in Entry 15 is to limit the goods which can fall under Entry 15. Nevertheless, in order to infuse a degree of flexibility, the Legislature conferred on the competent authority power to notify other goods as containers of packing materials. There can be no doubt that Entry 15 is intended to be exhaustive and not merely illunstrative. This view finds support from the decision of the Supreme Court in Sait Rikhaji Furtarnal and another vs. State of Andhra Pradesh (1), relying on the earlier decision in State of Tamil Nadu Vs. Pyare Lal Malhotra (2).

The position could not be different prior to 1.10.1978, though the Act, as it then stood, did not cantain the definition of ''packing material'' and the clause (xiii) of Entry 6. That is the effect of use of the words that is to say'' in Entry 6 of the Act, as it stood prior to 1.10.1978. Bamboo crates were not specified as packing material in Entry 6 and, therefore, the residuary entry in part -VI of Schedule - II would apply.

On 1.10.1978, a notification was issued specifying 10 categories of goods as packing materials for the purpose of Entry 15. The additional 10th item is ''bamboo khan Chas.'' Bamboo Khancha in bamboo create. This cannot be regarded as clarificatory.

In the result, we answer the question in the negative, i. c. in favour of the; Revenue and against the assesses.

A copy of this order under the signature of the Registrar and seal of the High Court be forwarded to the Board of Revenue.