COMMISSIONER OF SALES TAX, U.P. versus RAJ BHARAT DAS & BROS.

Citation: [1988] SUPP. 2 S.C.R. 685 · Decided: 30-08-1988 · Supreme Court of India · Bench: SABYASACHI MUKHERJI · Disposal: Appeal(s) allowed

Judgment (excerpt)

I 
. 
COMMISSIONER OF SALES TAX, U.P. 
v. 
RAJ BHARAT DAS & BROS. 
AUGUST 30, 1988 
A 
[SABYASACHI MUKHARJI AND M.H. KANIA, JJ.) 
B 
Central Sales Tax Act, 1956: s. 2(h)-Packing expenses incurred 
on putting the goods in deliverable state-Whether could be included in 
. sale price-Whether exigible to tax. 
Section 2(h) of the Central Sales Tax Act, 1956 contemplates sale C 
price as the consideration for the sale of any goods, inclusive of any sum 
charged for anything done by the dealer in respect of the goods at the 
time of ·or before the delivery thereof, other than cost of freight or 
delivery and cash discount. 
'ftle assessee carried on the business of mining and sale of silica 
D 
sand. The sales tax authorities sought to levy tax on:the packing charges 
that he had received from the purchasers. The Tribunal found that 
there was an implied agreement for sending silica in gunny bags, that 
the expenses on packing were incurred in order to put the goods in 
deliverable stati> prior to the delivery, that these expenses were rightly 
included iu the sale.price andhe-nce~xigible to tax. 
E 
The High Court came to the conclusion that since the Tribunal 
had not recorded1he finding that there was implied agreement to sell 
the gunny bags by the assessee to its customers, the packing charges 
were mentioned and not cost of gunny bags and since the price of goods 
and the packing charges were separately charged the said cltarges could 
F 
not be included in the sale price paid by the purchasers to the.assessee. 
Allowing the appeal by special leave, 
HELD: The·High Court was in error in the view it took. [689B] 
G 
Whether there is an implied agreement to sell p~cking material 
. along with the .Product contained therein is a pure question of fact 
depending upon the circumstances of each case. In the instant case the 
Tribunal found th;d the packing in the gunny bags was done by the 
dealer in respect of the goods at .the time ()f or before the delivery 
thereof, thafit was.done at the request of buyers as it was a convenient 
H 
685 
686 
SUPREME COURT REPORTS 
[1988] Supp. 2 S.t.R. 
A mode of delivery and that the buyers had given dlrection!l for the qua· 
lity of packing. In view of these facts found by the Tribunal, which must 
be taken to be conclusive, it could not be said that the parties did not 
intend to sell or buy the gunny bags. [687E-G] 
· 
In view of the definition of s. 2(h) of the Act, any1thing which was 
B integral part including any sum charged for anythi1og done by the 
dealer in respect of the goods, may form part but anything supplied 
separately pursuant to a separate order, directions or specifications. to 
the purchaser could not form part of the sale price. In the instant case 
the packing was done in order to putting the goods in deliverable state 
and incidental to the same. Such packing charges, th1erefore, could be 
C included. The mere fact that price of silica was shown separately and 
the cost of packing was also shown separately makes no difference to the 
assessment of sales tax. [688D, F-G] 
Commissioner of Taxes, .(lssam v. Prabhat MarketiW{ Co. Ltd., 
19 STC 84 and Jamana Flour & Oil Mill (P) Ltd. v. State of Bihar, 65 
D STC 462 applied. 
CIVIL APPELLATE JURISDICTION: Civil Appeal No. 2456 
of 1986. 
From the Judgment and Order dated 12. 7.1982 of the Allahabad 
E High Court in Sales Tax Revision No. 42 of 1982. 
S.C. Manchanda anti Ashok K. Srivasi_ava for the Appellant. 
The Judgment of the Court was delivered by 
F 
SABYASACHI MUKHARJI, J. This is an appeal by leave from 
the judgment and order of the High Court of Allahabad. dated 12th 
July, 1982. The decision was rendered in a revision by the assessee 
which was directed against the order of the Sales Tax Tribunal. The 
year involved is the assessment year 1974-75. 
G 
The assessee carried on the business of mining and sale of silica 
sand. The question was whether the sales tax could be charged from 
the assessee in respect of packing charges received by the assessee 
from the purchaser. The sales tax authorities as well as the T~ibunal 
held that the assessee was liable to pay sales tax on the packing charges 
that he had received from the purchaser. From the facts found by the 
H Tribunal it appears that there was a contract for packing the silica sand 
COMMR. OF SALES TAX v. R.B. DAS [MUKHARJI, J.] 
687 
in gunny bags and packing charges had been realised on the basis of 
mt. tons though these were separately shown a

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