M/S. BALKRISHNA HATCHERIES versus CLARIFICATION & ADVANCE RULING AUTHORITY

Citation: [2006] SUPP. 5 S.C.R. 865 · Decided: 11-09-2006 · Supreme Court of India · Bench: ASHOK BHAN · Disposal: Appeal(s) allowed

Judgment (excerpt)

) 
MIS. BALKRISHNA HATCHERIES 
A 
CLARIFICATION & ADVANCE RULING AUTHORITY 
SEPTEMBER IL 2006 
[AS HOK BHAN AND MARKANDEY KA nu. JJ.] 
B 
Karnataka Sales Tax Act, 1957-Section 50)(A), Second Schedule, 
Part F Ent1:v 8(viii)-Dressed chicken sold in po~vthene bag-Closed by 
stapling/crimping or by rubber band-Sales tax-Levy of-Held: In stapling! C 
crimping, staples and pins could be removed by the customer without breaking 
anything-As such dressed chicken are not sold in sealed containers and 
hence, exempted from sales tax. 
The question which arose for consideration in these appeals was whether 
dressed chicken sold in a polythene bag closed by stapling/crimping and D 
twisting an aluminium wire around the crimp, and also closed by a rubber 
band could be considered to be a sale in a sealed container to make it liable 
to sales tax under section 5(3)(a) of Karnataka Sales Tax Act; 1957. 
Appellant-assessee contended that 'sealed container' is one where 
access to the contents cannot be had without breaking the fastening on the E 
container or the container itself and where the container is hermetically 
sealed; that the staple or crimp wire used for closing polythene bag in which 
it sells foe dressed chicken, can be removed by opening the two closed ends 
of the staple/crimp wire, without breaking and damaging the polythene bag; 
that stapling or crimping is done only to facilitate easy carrying and to ensure F 
that the dressed chicken does not slip out of the plastic bag; that stapling or 
' 
crimping does not make the polythene bag airtight or watertight; and that 
the goods sold in a polythene bag which is merely stapled or crimped cannot 
be said to be sold in a sealed container. 
Allowing the appeals, the Court 
HELD: I.I. The container is considered to be a sealed container if it is 
closed in a manner that it is not possible to access the contents or remove the 
contents without breaking either the container or the fastening if it is closed. 
[870-G) 
G 
865 
fl 
866 
SUPREME COURT REPORTS [2006] SUPP. 5 S.C.R. 
( 
A 
1.2. Undoing cannot amount to breaking. When a staple is applied, the 
wire can be removed by straightening the two benl: ends without breaking the 
wire or tearing the paper. Hence, it cannot be accepted that undoing the 
fastening amounts to breaking the fastening. In cases of both stapling and 
crimping the staples and pins can be removed by the customer without 
B 
breaking anything. Hence, the dressed chicken are not sold in sealed 
containers and thus, are exempt from sales tax. Order of High Court as well 
as Authority for Clarification and Advance Ruling are set aside. 
(, 
!871-C, D; 872-C] 
The Marland Dairy & Farm v. The Union of India and Ors., (1975[ 4 
c 
SCC 313; Commissioner of Sales Tax v. National Chikki Mart, 39 (1977) STC 
447 and Nanjundeswara Mart v. State of Karnataka, 84 (1992) STC 534, 
referred to. 
Commissioner of Sales Tax, Delhi v. Pop Corn, 49 (1982) STC 336, 
approved. 
D 
Commissioner a/Sales Tax, U.P. v. G.G. Industries, 21 (1968) STC 63, 
relied on. 
CIVIL APPELLATE JURISDICTION : Civil Appeal No. 7623 of2005. 
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From the Judgment and Order dated 16.1.2004 of the High Court of 
E 
Karnataka at Bangalore in STA. No. 74 of2003. 
WITH 
C.A. No. 7624 of2005. 
R.F. Nariman, Pratap Venugopal, Surekha Raman, Harshad V. Hameed 
F 
and Dileep P. For Mis. K.J. John & Co. for the Appellant. 
Sanjay R. Hegde for the Respondent. 
The Judgment of the Court was delivered by 
MARKANDEYKATJU,J. 
G 
C.A. No. 7623/2005 
This appeal has been filed against the impugned Judgment and Final 
Order of the Karnataka High Court dated 16.1.2004 in STA No.74 of2003 
under Section 24(1) of the Karnataka Sales Tax Act, 1957. 
Heard Shri R.F. Nariman, learned Seni,or counsel for the appellant and 
~ 
H 
... 
) 
BALKRlSHNA HATCHERIES" CLARIFICATION & ADVANCE RULING AUTHORITY [MARKANDEY KA TIU, J. 1867 
Shri Sanjay R. Hegde, learned counsel for the respondent. 
The appellant is engaged in poultry farming. It sells dressed chicken. 
The term "dressed" with reference to chicken means chicken which is bled, 
scalded, feathered, boned and freezed. The dressed chicken is sold by the 
appellant in polythene bags. The polythene bags are closed either by stapling 
A 
or by crimping and fastening. Stapling is done by using ordinary stapler. B 
Crimping and fastening (by twisting an aluminium wire around the crimped 
portion) is done by using a crimping machine. The name and address of the 
appellant 

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