LexPREMIER BREWERIES ETC. versus STATE OF KERALA
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• PREMIER BREWERIES ETC. v. STATE OF KERALA DECEMBER 18, 1997 [AM. AHMADI, CJ, S.P. BHARUCHA AND SUHAS C. SEN, JJ.] Kera/a General Sales Tax Act, 1963: ss. 5(5), (6) and S.35-E11t1y 97 of the First Schedule-Sale of liquor---Bottles packed in cardboard car- to~Impositio11 of tax on packing materials-Assistant Commissioner im- posing tax at the rate of 8% on the cardboard cmtons-Revised order by Deputy Commissioner imposing tax at the rate of 50% as applicable to the sale of liquo~n appeal, held the packing material is liable to tax at the same point and rate as the goods contained in the packing materiaHmposi- tion of higher/revised rate of tax justified. The appellant-assessee was a dealerin Indian Made Foreign liquor, which was sold in- bottles packed in cardboard cartons. The case of the assessee was that cardboard cartons would be taxed at the rate of 8% under Entry 97 of the First Schedule of the Kerala General Sales Tax Act, 1963 and not at the rate of 50% as applicable to sale of liquor. The Assistant Commissioner accepted the stand of the assessee and passed the assessment order accordingly. But the Deputy Commissioner, in exercise A B c D E of his revisional powers under s35 of the Act set aside the assessment order and passed a revised order calling upon the assessee to pay tax on cartons at the rate of 50%. The order of the Deputy Commissioner was upheld by both the Tribunal and High Court. Hence the present appeal by F the assessee. The contention of the assessee was that it had charged its customers separately for the liquor and containers and thus it was not open for the ass~ssing authority to include the value of the containers in the value of the liquor for the purpose of calculating the assessee's turnover. It was G also contended that the cardboard cartons were secondary containers provided for protection of the bottles in which the liquor was sold and, therefoi-e, the turnover of the cartons could not in any way be included in the turnover of the liquor sold by the appellant. It was further contended that umler the Kerala General Sales Tax Act, a single point duty was H 671 672 SUPREME COURT REPORTS [1997) SUPP. 6 S.C.R. A Ieviable on the cardboard cartons, the duty had already been paid on these cartons by the manufacturer and thus it could not be taxed once again. Dismissing the appeal, this Court HELD : 1.1. The containers or the packing materials will be taxed at B the same point and at the same rate at which the goods are taxed. The provisions of sub-section (5) of s.5 of the Kerala General Sales Tax Act, 1963 provide that the turnover of the goods will include the turnover in respect of the packing material or the containers. [679-A; 678-H] 1.2. When the goods contained in containers or packed in packing C materials are sold the container and the packing material will have to be taxed at the same rate at which the goods are liable to be taxed. It will not make any difference if the price payable for the containers or packing materials is shown separately in the bills raised by the seller. [681-E] D 1.3. There is no scope for any assumption that sub-section (5) was E based on an· inarticulatf' premise that the provisions of that sub-section will not apply if the goods and the containers are sold and charged separately. When packed good are sold, provisions of sub-sections (5) and (6) will apply. There will be one rate of tax and one point of levy for such packed goods. This rule will apply "whether the price of the containers or the packing is charged separately or not". Thus the provisions of sub-sec- tion (5) of section 5 of the Act are quite clear and the Deputy Commissioner's decision was in accordance with law. [676-D; 678-F] 1.4. The mere fact that the containers and the goods were sold F separately or charged se1mrately will not make any difference in the matter of computation of the turnover of the goods and determination of tax or the rate of tax and the point at which the tax will be levied under section 5(5) of the Act. Therefore, even ifthe cartons have already been subjected to tax, by virtue of specific pro\isions of section 5(5) they will be liable to tax at the same point and at the same rate as the goods contained therein. G [680-H; 681-H] Raj Steel & Ors. v. State of A.P. & Ors., [1989] 3 SCC 262, distin- guished. Vasavadatta Cements v. State of Kamataka & Anr., [1996] 2 SCC 88, H held inapplicable. •
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