ORDER
Abdul Hadi, J.
1. In these revision petitions filed by the Revenue under Section 38(1) of the Tamil Nadu General Sales Tax Act, 1959 read with Section 9(2) of the Central Sales Tax Act, 1956, viz. T.C.(R) No. 12 of 1985 relating to the assessment year 1979-80 and T.C.(R) No. 13 of 1985 relating to the assessment year 1978-79 the only question involved is whether the Tribunal erred in law in having upheld the levy of sales tax on the sale value of gunnies, under the Central Sales Tax Act, 1956 (sic). The assessee is a dealer in wheat and wheat products and reported the taxable turnover of Rs. 6,09,895.75 for 1978-79 and Rs. 10,45,413 for 1979-80. But, the assessing authority determined the taxable turnover at Rs. 11,45,664 for the year 1978-79 and at Rs. 15,26,857 for the year 1979-80. While so determining the taxable turnover, the assessing authority found that the assessee has sold wheat products in the course of the inter-State trade, along with the gunny bags and the sale price included the value of the said gunnies also. So, considering the number of gunny bags the assessing authority estimated the relative sale value of the gunny bags at the rate of Rs. 8 per bag and thus arrived at the estimated sales turnover of gunnies as below :–
Assessment year No. of gunnies Rate per bag Total 1978-79 73,492 bags x Rs.8 Rs. 5,87,936 1979-80 65,448 bags x Rs. 8 Rs. 5,23,584
In the absence of “C” forms for the above sales, the assessing officer assessed the assessee to tax at 10 per cent on the aforesaid turnover. The assessee appealed to the Appellate Assistant Commissioner. The Appellate Assistant Commissioner remanded the matter back to the assessing authority to find out whether there is any implied contract for the sale of the above said gunnies and then to fix the turnover of the assessee according to law.
2. Against the order of the Appellate Assistant Commissioner the assessee preferred a second appeal to the Tribunal. The Tribunal inter alia observed thus :–
“The Food Corporation of India supplied wheat packed in gunny bags to the appellants.
The appellants converted it, into flour, ravai, etc., packed them in gunny bags and sold them locally and outside the State on consignment basis. For packing the wheat products appellants utilised the same gunny bags in which the wheat was received. No tax was paid by the appellants for the wheat got from Food Corporation of India.
……….
A perusal of the record namely invoices, receipts in this case show that the offer and acceptance for the appellants refer only the value of the wheat per bag and no reference is made in any of the correspondences or in the invoice to the value of the gunnies. The sale invoices shows that they have charged only the value of wheat. Simply because there is an instruction to the branch depot that not more than eleven gunny bags should be used it does not mean that there was a contract for the purchase of gunnies……….
…………………………….
In the present case there is no agreement to sell the packing materials between the Food Corporation of India and the appellants, The packing materials were not the subject of agreement of sale ‘express’ or ‘implied’. The parties did not intend to sell or buy the packing materials and the packing materials did not form part of the bargain at all, but were used by the sellers as a convenient and cheap vehicle of transport.”
So, observing, the Tribunal set aside the order of the Appellate Assistant Commissioner.
3. Learned counsel for the Revenue in his submissions very much relied upon our judgment dated January 22, 1997 Reported as State of Tamil Nadu v. Subramania Chettiar [1998] 109 STC 52 (Mad.) in T.C.No. 885 of 1984 (R.P. No. 85 of 1984) which also related to inter-State sales of groundnut kernel, and rice (whose sales were also exempted from tax) as in the present case, relating to wheat products in gunny bags. In the said decision, the tax levied by the assessing authority on the footing that there was sale of the said packing materials also viz., gunny bags, was upheld.
4. On the other hand, learned counsel for the respondent sought to distinguish the said judgment. He also contended that the decision reported in A. Prakasam Pillai and Sons v. State of Tamil Nadu [1993] 91 STC 95 (Mad.) which was distinguished in the above referred to our judgment dated January 22, 1997, would only apply to the facts of the present case.
5. We have considered the rival submissions. In our view our judgment dated January 22, 1997 and the reasoning therein would apply to the facts of the present case also and the above referred to decision viz., A. Prakasam Pillai and Sons v. State of Tamil Nadu. [1993] 91 STC 95 (Mad.) would not actually apply to the facts of the present case and these revisions have only to be allowed, as was done in the above said judgment dated January 22, 1997 in relation to the above referred T.C.(R) No. 885 of 1984. The detailed reasons are as follows :
We are only to hold in the present case that there is an implied agreement between the relevant parties to sell the above said gunny bags. As already mentioned, the value of each of the above said gunny bags has been estimated at the rate of Rs. 8 per bag [in the above referred to T.C.(R) No. 885 of 1984 the value of the gunny bags was estimated at Rs. 3 per bag]. Further the total turnover in the present case, in relation to the assessment year 1978-79 comes to Rs. 5,87,936 for the above referred to the entire 73,492 bags. Likewise, the corresponding figure in the year 1979-80 was Rs. 5,23,584 for the above referred to 65,448 bags. When the value of the bags is so much appreciably high, it could be easily inferred that there was an implied agreement to sell those gunny bags. The above referred to decision in A. Prakasam Pillai and Sons v. State of Tamil Nadu [1993] 91 STC 95 (Mad.) was a case of sale of jaggary in gunny bags and it was found therein that the value of the said gunny bags was insignificant. That is not so in the present case, as mentioned above.
5. In our above referred to judgment dated January 22, 1997 we had also relied upon the relevant observations of the Supreme Court in Raj Sheet v. State of Andhra Pradesh [1989] 74 STC 379 and the reasoning contained in those observations would also apply to the facts of the present case. Likewise, the decisions of this court reported in State of Tamil Nadu v. V.V. Vanniaperumal & Co. [1990] 76 STC 203 [FB], Natarajan and Sons v. State of Tamil Nadu [1977] 39 STC 443, A.R. Manickam Chettiar & Sons v. State of Tamil Nadu [1992] 87 STC 134 and State of Tamil Nadu v. S. Murugaiyan [1996] 101 STC 363 which were relied on in our above referred to judgment dated January 22, 1997 would also apply to the facts of the present case.
6. No doubt, the Tribunal points out that the invoices, etc., shows that the offer and acceptance refer only to the value of the wheat per bag and no reference is made to the value of the gunnies. But when it is said wheat per bag, it cannot be said that the value of the bag is not taken into account, particularly in the light of the above referred to value of each of the gunny bags. In such a situation, it cannot be held that the price charged is only for the value of the wheat. Further even assuming that for packing the wheat products the assessee utilised the same gunny bags in which the wheat was received, it cannot be said that the gunny bags were of insignificant value, when it is found that the value of the each gunny bag is estimated in the present case at as much as Rs. 8 per bag, while in our judgment dated January 22, 1997 the value was only Rs. 3 per bag. Further it is also found that the assessee has also purchased gunnies outright, from registered dealers.
7. In the light of all the above features and the above referred decisions, we are of the view that the Tribunal has erred in law in coming to the conclusion it reached and we confirm the order of the assessing authority as in our view implied agreement to sell gunnies, could be easily inferred from the available materials and in the light of the above referred to decision and there is no need for any remand as held by the Appellate Assistant Commissioner. Accordingly, we allow this revision. No costs.