{"id":249230,"date":"2007-04-24T00:00:00","date_gmt":"2007-04-23T18:30:00","guid":{"rendered":"https:\/\/www.legalindia.com\/judgments\/ms-co-operative-company-ltd-vs-commissioner-of-trade-tax-u-p-on-24-april-2007"},"modified":"2018-06-28T00:58:28","modified_gmt":"2018-06-27T19:28:28","slug":"ms-co-operative-company-ltd-vs-commissioner-of-trade-tax-u-p-on-24-april-2007","status":"publish","type":"post","link":"https:\/\/www.legalindia.com\/judgments\/ms-co-operative-company-ltd-vs-commissioner-of-trade-tax-u-p-on-24-april-2007","title":{"rendered":"M\/S Co-Operative Company Ltd vs Commissioner Of Trade Tax, U.P on 24 April, 2007"},"content":{"rendered":"
Supreme Court of India<\/div>\n
M\/S Co-Operative Company Ltd vs Commissioner Of Trade Tax, U.P on 24 April, 2007<\/div>\n
Author: S.B. Sinha<\/div>\n
Bench: S.B. Sinha, Markandey Katju<\/div>\n
           CASE NO.:\nAppeal (civil)  2124 of 2007\n\nPETITIONER:\nM\/s Co-operative Company Ltd\n\nRESPONDENT:\nCommissioner of Trade Tax, U.P\n\nDATE OF JUDGMENT: 24\/04\/2007\n\nBENCH:\nS.B. Sinha & Markandey Katju\n\nJUDGMENT:\n<\/pre>\n
J U D G M E N T
\n[Arising out of S.L.P. (Civil) No. 13194 of 2006]<\/p>\n
S.B. SINHA,  J :\n<\/p>\n
\tLeave granted.\n<\/p>\n
\tAppellant is a co-operative society registered under the U.P. Co-
\noperative Societies Act<\/a>.  It carries on business of manufacture and sale of
\nIndia Made Foreign Liquor (for short, ‘IMFL’)  and country liquor.\n<\/p>\n
\tIn respect of the assessment year 1989-90, the books of accounts
\nmaintained by it were rejected by the Assessing Authority, inter alia, on the
\npremise that tax would be payable in respect of bottles being containers of
\nthe country liquor.  An appeal was preferred thereagainst by Appellant
\nbefore the Deputy Commissioner (Appeal) and by reason of an order dated
\n11.01.1994, the said appeal was allowed in part holding that no sales tax
\ncould be imposed on the bottling charges for country made liquor.  A
\nSecond Appeal thereagainst was preferred before the Trade Tax Tribunal by
\nthe Revenue, which was dismissed.  A Revision was preferred before the
\nHigh Court against the said judgment of the Tribunal and by reason of the
\nimpugned judgment, the High Court opined that bottling charges are part of
\nthe turnover and are liable to tax.\n<\/p>\n
\tMr. K. Radhakrishnan, the learned Senior Counsel appearing on
\nbehalf of Appellant, would submit that the High Court committed a serious
\nerror in passing  the  impugned judgment insofar as it failed to take into
\nconsideration :\n<\/p>\n
1)\tThe assessee is not a dealer in bottles as it does not carry on any
\n\tbusiness  therein.\n<\/p>\n
2)\tThere being no other alternative, bottles are used as a cheap and
\n\tconvenient mode of transport and sale of country made liquor.\n<\/p>\n
3)\tAmounts of Rs. 2.60, Rs. 2.30 and Rs. 1.57 represent only the
\n\tcharges for P.P. caps, sales and filling charges, which are collected
\n\tunder the head of bottling charge and, thus, the same is a payment for
\n\tthe job work undertaken for packing the country made liquor.\n<\/p>\n
4)\tNeither there is any sale of bottles nor any price is charged therefor.\n<\/p>\n
5)\tThere is no express or implied agreement to sell bottles.\n<\/p>\n
6)\tThe department has not discharged its burden to prove that there was
\n\tan implied agreement to sell the bottles.\n<\/p>\n
7)\tThe purchasers were purchasing only country made liquor and the
\n\tappellant had only been selling the same.\n<\/p>\n
8)\tCost of packing material is very less and insignificant  as compared to
\n\tthe cost of country made liquor and price of the goods is the same
\n\twith \tor without bottles.\n<\/p>\n
9)\tTax on bottling charges is sought to be recovered only from tax free
\n\tcountry liquor, and in the course of sale of IMFL, the sale of bottle
\n\thas not been  held to be a separate sale and, thus, double standards
\n\tadopted by the  department is not justified.\n<\/p>\n
10)\tSection 3AB<\/a> inserted in the U.P. Trade Tax Act, 1948 (for short, ‘the
\n\tAct’) on 01.08.1990, being clarificatory\/declaratory has  retrospective
\n\teffect.\n<\/p>\n
\tThe learned counsel has placed  strong reliance on a decision of the
\nAllahabad High Court in Chhatta Sugar Company Ltd. v. Commissioner,
\nTrade Tax, U.P., Lucknow<\/a>  [124 STC 33], in support of the said  contention.\n<\/p>\n
\tMr. Dinesh Dwivedi, the learned Senior Counsel appearing on behalf
\nof the respondent, on the other hand, would submit that as sale of bottles
\nfinds place in Entry  20 in the Scheduled appended to the Act, despite the
\nfact that no sales tax is payable on country liquor, the assessee would be
\nliable therefor having regard to the definition of ‘turnover’ as contained in
\nSection 2(i)<\/a> of the Act.\n<\/p>\n
\tA notification was issued on or about 07.09.1981 by the State of Uttar
\nPradesh in exercise of its power conferred upon it under the proviso
\nappended to clause (e) of sub-section (1) of Section 3-A of the U.P. Sales
\nTax Act, 1948, in terms whereof glass bottles and phials, other than hand
\nmade glass phials is exigible to tax @ 4% have been included in Entry 20
\nthereof.\n<\/p>\n
\tAppellant herein is a dealer of country liquor.  It also carries on
\nbusiness in IMFL.  Curiously,  whereas in respect of IMFL, no sales tax has
\nbeen levied on  bottles, such a levy  is sought to be made on bottles for sale
\nof  country liquor.  Business in country liquor is res extra commercium.  It is
\ngoverned by the provisions of the U.P. Excise Act.  Each stage of
\nmanufacture, bottling, distribution and sale of country liquor is governed not
\nonly by the provisions of the U.P. Excise Act and the rules framed
\nthereunder, but also the terms and conditions of licence.\n<\/p>\n
\tIt is not in dispute that Appellant charged from his customers a sum of
\nRs.2.60, 2.30 and Rs.1.57 under the heading “P.P. Caps, Seal and Filling’.
\nThe question which arose for consideration was as to whether imposition of
\nsuch charge would amount to the charge of price of the bottles as contra-
\ndistinguished from the bottling charges.\n<\/p>\n
\tThe Assessing Officer found the same to be exigible to sales tax,
\ndespite noticing that there existed a dispute as to whether sale of bottles was
\nadmitted or the charges levied were bottling charges, it proceeded to hold :\n<\/p>\n
“Thus, it is clear that for this purpose the bottles
\npurchased from outside the province has been used.  In
\nview of the aforesaid, as far as the question of tax
\nliability on the amount of aforesaid bottles is concerned,
\nas per the order of the Commissioner Excise the rates of
\n2.30, 2.20 and 2.10 which has been fixed for the bottles
\nof 750 M.L. 375 ML and 180 ML capacity is completely
\nfor the empty bottles for the sale of country liquor.  As
\nfar as the price of these empty bottles under these charges
\nis concerned, the alleged labour charges with regard to
\nthe use of caps cork and labelling at different rates is
\nnegligible in comparison to the price of the bottles of the
\nassessee and how much amount with regard to this work
\nis included in the said rate of 2-30, 2.20 and 2.10 has not
\nbeen mentioned in the aforesaid order of the Excise
\nCommissioner.  In this way, the recovery of the amount
\nby the assessee under the head of bottling charges is the
\nsale of cap and cork and labelled empty bottles in a
\nseparate contract under the definition of Section 2-H of
\nthe Provincial Sales Tax Act.  As far as the question of
\ntwo judgments referred by the assessee is concerned, the
\nfacts of the aforesaid judgments were not relating to the
\nbottling charges as the fact of this case.  In the case of
\nM\/s Gannon Dunkerley & Co., the Hon’ble Supreme
\nCourt has held that to constitute sale, the existence of two
\nparties, transfer of goods and passing of consideration
\nfrom purchaser to seller for this purpose is necessary.
\nThese all facts are present in the case under consideration
\nand in view of the same the amount shown as the bottling
\ncharges, is the sale of label, cap & cork used on the
\nbottle.  Under the case under consideration, the assessee
\nhas shown the price of the bottles as bottling charges and
\nhas not admitted the sale of the bottles, while amount
\nrecovered in the form of bottling charges is the clear cut
\nsale of bottles”\n<\/p>\n
\tThe Appellate Authority,  on the other hand, held :\n<\/p>\n
\t“It is clear on the basis of the aforesaid principles
\nthat the bottling charges have not been taken due to the
\nsale because in this case, the cost of the packing material
\nis very less than the price of the main material and the
\nappellant had no other business alternative that he could
\nsale and transport the liquor without packing materials
\nand there was no relaxation in price for the purchaser of
\nthe liquor in case of absence of the packing materials.
\nTherefore, the sale of packing material could not be held
\nas a separate sale agreement and in case of sale no sales
\ntax could be imposed on the bottling charges.\n<\/p>\n
\tIt is also pertinent to mention here that the sale of
\nforeign liquor and the sale of bottles have not been held
\nto be a separate sale and the same rate has been imposed
\nover the same.  The double standard adopted by the Tax
\nAssessment Officer in the same case shall not be held
\njustifiable.”\n<\/p>\n
\tThe  Trade Tax Tribunal opined :\n<\/p>\n
\t“As regards the  bottling charges, we are of the
\nopinion that the assessee is neither a dealer in bottles
\nnor does any business of bottles.  The bottles have been
\nused by the assessee only as a cheap and convenient
\nmode of transport, since there was no commercial
\nalternative available, the amount of 2.60, 2.30, 1.57
\nonly represents the charge for P.P. Caps, seals, labels
\nand filling charges and not for bottles and this charge
\nhas been collected under the head of bottling charges
\nand the same does not represent any cost of the bottles,
\nlabel etc.  It was merely a payment for the job work
\nundertaken for packing the liquor, since no price was
\ncharged for bottles, there can be no sale of bottles as
\nwas held by the Hon’ble Court in the case of State of
\nMadras v. Ganon Dunkerley & Co. Ltd<\/a>. (1958) STC
\n383 S.C.\n<\/p>\n
\tThe Hon’ble Supreme Court and the various
\nHigh Courts have repeatedly held that it is the onus of
\nthe department to prove that an implied agreement to
\nsell existed and how the price has been charged for the
\npacking material.  The assessee was required to prove
\nnegative.   This burden has not been discharged
\nsuccessfully by the department.  Therefore, the
\nassessment to tax on this point was totally illegal.
\nThe inference of alleged implied sale is baseless since
\nfirstly no price for bottles is charged and whatever was
\nthe cost  of bottles, it goes into the overheads of and is
\ndebited to the profit and loss account.  Moreover, the
\npacking material, which is used by the assessee is a
\nbare minimum necessary as the assessee has no other
\ncommercial alternative.”\n<\/p>\n
\tDiffering with the findings of fact arrived at by the Appellate
\nAuthority as also the Tribunal, the High Court, in exercise of its revisional
\njurisdiction, however, in its judgment which is being impugned before us
\nproceeded on the basis that in view of the definition of ‘turnover’ as
\ncontained in Section 2(i)<\/a> of the Act, and also the fact that the liquor could
\nnot be sold without packing, a contract of sale of bottles  would be
\npresumed, holding  :\n<\/p>\n
\t“The  aforesaid two decisions of the Apex Court
\nclearly hold that in case where the goods are sold in
\npacked form, there is implied contract for sale of material
\neven if the price are separately charged for.  It has been
\nfurther held that the packing charges charged for the
\npacking material and for labour charges etc. falls within
\nthe purview of “any sums charged for anything done by
\nthe dealer in respect of the goods at the time of or before
\nthe delivery thereof” and thus,  it is the part of turnover.
\nBottling of liquor is an integral part of the process of
\nmanufacturing.  Liquor becomes marketable only after
\nbottling.  Liquor can not be sold without packing.  Thus,
\nthe packing charges are liable to be included in the
\nturnover and liable to tax.  I do not agree that bottling
\ncharges is a delivery charges.”\n<\/p>\n
\tThere is no finding by the High Court that there was an implied
\ncondition of sale in regard to sale of  bottles.  The High Court while arriving
\nat the said finding did not deal with the question as to whether the charges
\nlevied by Appellant from its customers, which admittedly stand approved by
\nthe Excise Authority, represent bottling charges  or sale of bottles.\n<\/p>\n
\tA contract of sale of goods must be construed having regard to the
\nterms and conditions thereof.  A person purchasing a property must know as
\nto what he had bargained for.  The parties might not have bargained for the
\ncontainers but might have bargained only for the contents.\n<\/p>\n
\tIn absence of any stipulation made in the contract of sale for the
\npurpose of levy of sales tax or otherwise, the Revenue Authorities must
\narrive at a finding as to whether there had been any implied condition of
\ntransfer, burden of proof wherefor would be on the Revenue.  Consideration
\nof a part of goods may be held to be a condition precedent for constituting a
\nsale, but therefor each case  must be judged on its own facts.\n<\/p>\n
\tThe High Court, in our opinion, failed to take into consideration the
\nfact that the question as to whether there had been an implied contract for
\nsale of bottles and any amount has separately been charged therefor was
\nrequired to be determined.  Each case  is required to be determined on
\nconsideration of the relevant materials placed on record by the parties.\n<\/p>\n
\tThe Assessing Officer proceeded on the basis that the assessee
\nadmitted to have levied charged for the bottles.  It, however, failed to make a
\ndistinction between ‘bottling charges’ and the ‘price of bottles’.  When the
\nexcise articles are sold in a bottle, it must have a label containing the
\nrequisite informations  as envisaged under the Excise Act<\/a> and the Rules
\nframed thereunder or the terms and conditions of licence authorising the
\ndealer to deal with in the commodity in question.  The Assessing Officer did
\nnot proceed on the basis that the price of bottles form a part of the turnover
\nas contended by Mr. Dwivedi.\n<\/p>\n
\tThe question came up for consideration before different High Courts.
\nWe may notice only a few of them.\n<\/p>\n
\tIn Commissioner of Sales Tax, Madhya Pradesh, Indore v. The
\nBhopal Sugar Industries Ltd<\/a>. [48 STC 45], Division Bench comprising of
\nG.P. Singh and U.N. Bhachawat, J., (as the learned Judges then were)
\nopined :\n<\/p>\n
\t“7. Sales tax on gunny bags can be imposed only
\non the basis that the assessee sold the bags to the
\npurchasers of sugar. There was no express agreement for
\nsale of gunny bags. The Tribunal has stated that there
\nwas no evidence to show even an implied agreement for
\nsale of gunny bags. The learned Government Advocate,
\nwho appeared for the department, however, submitted
\nthat the other facts stated by the Tribunal lead to the
\ninference that there was an implied sale of gunny bags. It
\nis this argument which we have to examine. The property
\nin the gunny bags no doubt passed to the purchasers of
\nsugar and the gunny bags did not become useless in the
\nhands of the purchasers. But from this alone it is not
\npossible to hold that there was an implied sale of gunny
\nbags. When goods packed in containers are sold, the
\nproperty in the containers no doubt is transferred to the
\npurchaser. But before holding that there was an implied
\nsale of containers, one has to exclude the possibility that
\nthe containers were used by the dealer as a convenient
\nand cheap mode of transporting the goods to the
\npurchaser without charging any price for them. It has also
\nto be kept in mind that the burden of proof that there was
\nan implied sale of packing material or container is on the
\ndepartment and the assessee is not required to prove the
\nnegative. Viewed on these principles, in our opinion, the
\nfacts do not warrant the conclusion of implied sale of
\ngunny bags. It is not practicable for a manufacturer of
\nsugar like the assessee to sell sugar in loose and the
\nassessee has to use some form of packing material for
\ntransporting the sugar sold by it to the purchaser. Indeed,
\nthe mode of packing sugar in gunny bags was prescribed
\nunder the Control Order which was binding on the
\nassessee. The assessee did not charge any separate price
\nfor gunny bags. The price of 100 kgs. of sugar packed in
\ngunny bag was fixed under the Control Order and it is
\nthis price which the assessee charged from the
\npurchasers. May be, that in fixing the price of 100 kgs.
\nsugar packed in gunny bag, the Government took into
\naccount the price of the packing material just as it must
\nhave taken into account manufacturing cost and other
\nincidental charges and expenses of the producer. But
\nfrom this alone, it cannot be said that the assessee
\ncharged the price of gunny bags from the purchasers or
\nthat there was an implied sale of gunny bags to the
\npurchasers. The Sugar Control Order authorises the
\nGovernment to fix the ex factory price of sugar and not
\nthe price of gunny bags. The price fixed by the Control
\nOrder and charged by the assessee was the price of sugar.
\nThe cost of gunny bag is insignificant as compared to the
\ncost of sugar packed in it. Having regard to all these
\ncircumstances, in our opinion, it is not possible to infer
\nthat there was any implied sale of gunny bags.”\n<\/p>\n
\tYet again in  Commissioner of Sales Tax, M.P. v. Swadeshi Cotton
\nand Flour Mills Ltd<\/a>. [ 46 STC 138], Sohani, J.,  (as His Lordship then was)
\nstated the law thus :\n<\/p>\n
\t“4. Having heard the learned counsel for the
\nparties, we have come to the conclusion that this
\nreference must be answered in favour of the assessee and
\nagainst the department. As regards the grievance that the
\nBoard had not given any clear findings, all that we can
\nsay is that no such grievance can be made in view of the
\nquestion referred to us. That question is based on the
\nassumption that there was material before the Board for
\ngiving a finding and that finding was accordingly given
\nby the Board that there was no implied sale of the
\npacking materials. In point of fact, the question referred
\nto this Court is a question of fact. The burden was on the
\ndepartment to prove that there was an implied sale of the
\npacking materials. In the instant case, it was not disputed
\nthat there was no express agreement for the sale of the
\npacking materials. The assessing authorities had not
\nfound that price was separately charged for the packing
\nmaterial. The contention advanced on behalf of the
\nassessee before the Board that the price charged by the
\nassessee for the cloth was either on the basis of meterage
\nor on the basis of weightage was impliedly upheld by the
\nlearned Member as he relied upon the decision reported
\nin Binod Mills Co. Ltd. v. Commissioner of Sales Tax<\/a>
\n1971 M.P.L.J. 1009, where a similar finding had been
\ngiven. It must, therefore, be held that the Board had
\nfound that the burden to prove that there was sale of the
\npacking material was not discharged by the department.
\nIn our opinion, therefore, the Board rightly relied upon
\nthe decision reported in Binod Mills Co. Ltd. v.
\nCommissioner of Sales Tax<\/a> 1971 M.P.L.J. 1009 for
\ncoming to the conclusion that there was no implied sale
\nby the assessee of the packing materials.”\n<\/p>\n
\tThis Court in Hyderabad Deccan Cigarette Factory v. The State of
\nAndhra Pradesh<\/a> [17 STC 624],  observed :\n<\/p>\n
\t“This passage indicates that the Tribunal  rejected
\nthe contention on the ground that the value of the packing
\nmaterials must have been taken into consideration in
\nfixing the price of the cigarettes.  But that reasoning does
\nnot answer the contention that howsoever the price was
\nfixed, the cigarettes  were sold, whether packed in
\ncardboards or wooden boxes, in or outside the State of
\nAndhra Pradesh, at the same rate.  The High Court also
\nheld that though there was no express contract to sell the
\npacking materials and the packets separately, such a
\ncontract was implicit in the contract for the sale of the
\ngoods.  This implied agreement was based on the fact
\nthat the packet cigarettes were sold at a price and on the
\nsurmise that in fixing the price the assessee  might have
\ntaken into consideration the cost of all the materials used
\nin the packing.  The High Court also ignored the
\naforesaid contention of the assessee.  It also did not
\nconsider the relevant material to come to the conclusion
\nthat the assessee agreed to sell the packing materials to
\nthe customers.\n<\/p>\n
\tA perusal of the orders of the various authorities
\nand the High Court shows that a simple question of fact
\nhas been sidetracked by copious citations.  Whether there
\nwas an agreement to sell the packing materials is a pure
\nquestion of fact and that question cannot be decided on
\nfictions or surmises. That is what has happened in this
\ncase.  The Commercial Tax Officer invoked a fiction; the
\nAssistant Commissioner of Commercial Taxes relied
\nupon the doctrine of “finished product”, the Appellate
\nTribunal relied upon surmises; and the High Court on the
\nprinciple of implied agreement”\n<\/p>\n
\tDefinition of ‘turnover’, in our opinion, for the purpose of
\ndetermining the question,  is not very relevant.  Interpretation clause must be
\nconstrued having regard to the purport and object of the Act it seeks to
\nachieve.  The term ‘turnover’ may contain several ingredients.  One of the
\ningredients of the said term, however, cannot be taken in isolation for the
\npurpose of imposition of levy.  Imposition of tax would be on the total
\nturnover, assuming that the prices of the bottles were to be included in the
\nprice of the country liquor, provided one is leviable.  If an exemption has
\nbeen granted, it  would be on sale of the articles in a deliverable  form.
\nThere exists a serious dispute as to whether for the purpose of levying sales
\ntax, a part of the commodity which is sold as a composite whole would come
\nwithin the purview of the Act when sale of two different commodities can be
\nbifurcated for levy of tax.\n<\/p>\n
\tContainers of the principal commodity which is the subject matter of
\nthe contract of sale may have to be taken into consideration for the purpose
\nof arriving at the total turnover, but even for that purpose there has to be an
\nelement of ad idem of mind between the purchaser and seller.  If by reason
\nof express contract or implied contract, the containers are also sold,
\nindisputably the same would be exigible to tax, as has been held in
\nCommissioner of Taxes Assam v. Prabhat Marketing Co. Ltd., Gauhati<\/a>
\n[AIR 1967 SC 602],  but it is difficult to accept the contention of Mr.
\nDwivedi that even in absence of such a contract, sales tax would be leviable.
\nReliance  has been placed by Mr. Dwivedi on Jamana Four and Oil Mills (P)
\nLtd. v. State of Bihar<\/a> [(1987) 3 SCC 404], wherein this Court was not
\ndealing with a situation of the present nature.  It was held :
\n\t“3. The dealer filed a revision before the Tribunal
\nand contended that the demand of Sales Tax payable at
\ndifferent rates on the calculated turnover of gunny bags
\nwas not at all warranted as no price had been charged for
\nthe containers. The Tribunal found:\n<\/p>\n
(1) The dealer transferred the property in the gunny bags,
\nthe packing material, to the purchasers for price.
\n(2) The price of the gunny bags was included in the
\nconsolidated rates of price charged by the dealer.
\n(3) There was an implied agreement for the sale of gunny
\nbags between the dealer and the different purchasers to
\nwhom the wheat products were supplied.\n<\/p>\n
(4) The transfer of gunny bags was impliedly covered by
\nthe contract of sale with regard to the wheat products.
\nOn these findings the Tribunal held:\n<\/p>\n
We hold that the learned lower courts were justified in
\nlevying tax at a different rate on the turnover on account
\nof sale of gunny bags in which the wheat products were
\nsold.\n<\/p>\n
It further found:\n<\/p>\n
The learned Deputy Commissioner has given a direction
\nfor determination of the turnover on account of sale of
\ngunny bags. On being asked the applicant accepted that
\nthe accounts maintained by him would reveal the exact
\nnumber of gunny bags used in the transaction of sale
\nunder consideration as also the price of the same. Hence
\nwe direct in modification of the orders passed by the
\nlearned Deputy Commissioner in this behalf that the
\nlearned Assessing Officer should ascertain from the
\naccounts, the turnover on account of sale of gunny bags
\nas container of wheat products during the period under
\nconsideration and assess tax thereon at the prescribed rate
\nof 4=per cent The balance turnover shall be assessed at 2
\nper cent.”\n<\/p>\n
\tReliance has also been placed by Mr. Dwivedi on M\/s Chhatta Sugar
\nCompany Ltd., Mathura v. Commissioner of Sales Tax [1991 UPTC 341],
\nwherein a learned Single Judge of the Allahabad High Court, without any
\ndiscussion, opined that the containers would also be taxed.\n<\/p>\n
\tInclusion of bottles as a separate item in the notification dated
\n07.09.1981, in our opinion, is not relevant.  Appellant is not a dealer of
\nbottles.  Had it been a dealer of the bottles, he might have been exigible to
\nsales tax in terms of the said provision.\n<\/p>\n
\tThus, without adverting to the question as to whether there had been
\nan implied sale, Entry 20 will have no role to play.\n<\/p>\n
\tWe may also consider the matter from another angle.  A tax may be
\nleviable at different rates.  Definition of ‘turnover’ having undergone an
\namendment and being expansive in nature, would it be permissible to
\nsegregate it to make different commodities for the purpose of imposition of
\ntax at a higher rate, would, in our opinion, merit consideration.  We are not
\noblivious of the fact that if the sale is in relation to two different
\ncommodities, it may be permissible to levy tax at different rates, but not
\nwhen the definition of ‘turnover’ includes a wide range of subjects including
\nthe package.  Only for the purpose, the concept of implied contract of sale
\nwould assume significance.\n<\/p>\n
\tWe, however, are not impressed with the arguments of Mr.
\nRadhakrishnan that Section 3AB<\/a> of the Act introduced in the statute by
\nreason of the U.P. Trade Tax Tax (Amendment) Act, 1991 is clarificatory in
\nnature.  The said amendment came into force with effect from 25.04.1990.
\nThe assessment year, as noticed hereinbefore, is 01.04.1989 to 31.03.1990.
\nThe Act<\/a> having been brought into force from a particular date, no
\nretrospective operation thereof can be contemplated prior thereto.   The said
\nprovision furthermore contains a substantive provision which is itself a
\npointer to the fact that for the earlier period packing materials would not be
\nexempted merely because main commodity is exempted from tax, but albeit
\nsubject to the condition that there was an agreement to sell in respect
\nthereof.  The amendment sought to deal with a matter which created some
\nproblem in implementation of the Act.\n<\/p>\n
\tWe, therefore, are of the opinion that the matter requires
\nreconsideration by the High Court.  The High Court must on the basis of the
\nmaterials available on records arrive at a finding as to whether there existed
\nany implied contract for sale and\/or whether in effect and substance keeping
\nin view the fixation of price of different materials by the excise authorities in
\nterms of the U.P. Excise Act and\/or rules framed thereunder any separate
\ncharges have been levied for prices of the bottles separately or not.\n<\/p>\n
\tFor the reasons aforementioned, the impugned judgment cannot be
\nsustained, which is set aside accordingly.  The  appeal is allowed.  The
\nmatter is remitted to the High Court for its consideration afresh.  No costs.<\/p>\n","protected":false},"excerpt":{"rendered":"
Supreme Court of India M\/S Co-Operative Company Ltd vs Commissioner Of Trade Tax, U.P on 24 April, 2007 Author: S.B. Sinha Bench: S.B. Sinha, Markandey Katju CASE NO.: Appeal (civil) 2124 of 2007 PETITIONER: M\/s Co-operative Company Ltd RESPONDENT: Commissioner of Trade Tax, U.P DATE OF JUDGMENT: 24\/04\/2007 BENCH: S.B. Sinha & Markandey Katju JUDGMENT: […]<\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_lmt_disableupdate":"","_lmt_disable":"","_jetpack_memberships_contains_paid_content":false,"footnotes":""},"categories":[30],"tags":[],"class_list":["post-249230","post","type-post","status-publish","format-standard","hentry","category-supreme-court-of-india"],"yoast_head":"\nM\/S Co-Operative Company Ltd vs Commissioner Of Trade Tax, U.P on 24 April, 2007 - Free Judgements of Supreme Court & High Court | Legal India<\/title>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/www.legalindia.com\/judgments\/ms-co-operative-company-ltd-vs-commissioner-of-trade-tax-u-p-on-24-april-2007\" \/>\n<meta property=\"og:locale\" content=\"en_US\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\"M\/S Co-Operative Company Ltd vs Commissioner Of Trade Tax, U.P on 24 April, 2007 - 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