JUDGMENT
Raju, J.
1. The question that arises for consideration in the above two revisions filed by the Government is whether the packing materials used for delivering goods which themselves were not taxable, can be subjected to tax ?
2. The respondents were dealers in coconuts and gunny bags and they were assessed to tax under the Central Sales Tax Act, 1956, for the assessment year 1978-79. Treating the gunny bags used for sale and delivery of coconuts as packing materials sold, they were subjected to assessment on the value of the packing materials used. The said course was adopted on account of the fact that the charge relating to packing materials was separately shown in the bills as representing the price for the sale of packing materials. No doubt, the coconuts themselves were not taxable, but the question is whether the levy of tax in respect of the value of the packing materials was justified. On an appeal before the first appellate authority, the challenge to the levy was rejected. On further appeal before the Tribunal, the claim of the assessees was sustained. The Tribunal was of the view that an agreement for the sale of packing materials could not be assumed and that inasmuch as the coconut was exempt from tax, the packing materials cannot be taxed. Aggrieved, the department has filed the above tax revision cases.
3. Learned Additional Government Pleader appearing for the Revenue contends that the packing materials in respect of goods sold in the course of inter-State trade and commerce, were exempted when specified and charged for separately without including them in the price of goods sold by virtue of G.O. Ms. No. 3921, Revenue, dated September 1, 1960 and inasmuch as the said exemption was withdrawn by the cancelling of the said notification in another notification issued in G.O.P. No. 7237, Revenue, dated December 4, 1973, the claim of the assessees ought to have been disallowed and the order of the Tribunal in so far as it sustained the claim cannot be upheld.
4. The respondents in spite of service of notice on them and thus being granted an opportunity, did not choose to appear before this Court. We have gone through the order of the authorities below including that of the Tribunal which is challenged before us. Learned Additional Government Pleader has made available before us copies of the Government orders referred to above which will go to show that the exemption originally granted under the Central Sales Tax Act stood revoked by the subsequent Government order dated December 4, 1973. It further transpires that the said order of withdrawal has been published in the Tamil Nadu Government Gazette dated January 30, 1974 and consequently it cannot be legitimately claimed that packing materials used for goods sold in the course of inter-State trade and commerce when the packing charges are specified and charged for separately can be said to be eligible for exemption. Further, we are unable to subscribe to the view expressed by the Tribunal that as the coconut is exempt from tax, the packing materials cannot also be taxed. In our view, such an assumption has no support of law.
5. In the light of the above position, we are of the view that the order of the Tribunal cannot be sustained. The fact that they have been separately shown and charged for indicates that those materials have also been sold and the same would give rise to an inference that there was an implied contract for the sale of packing materials themselves. Consequently, we accept the revisions and set aside the orders of the Tribunal and the orders of the assessing authority stand restored.
6. The tax revision cases are allowed. No costs.
7. Petition allowed.