M/s. Cement Corporation of India Ltd, Vs State Representative

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[³³⁸⁶ ]

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IN THE HIGH COURT FOR THE STATE OF TELANGANA AT HYDERABAD

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MONDAY, THE ELEVENTH DAY OF SEPTEMBER TWO THOUSAND AND TWENTY THREE

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PRESENT

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THE HON'BLE SRI JUSTICE P.SAM KOSHY AND

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THE HON'BLE SRI JUSTICE LAXMI NARAYANA ALISHETW

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TAX REVISION CASE No: 128 of 2004

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Tax revision under Section 22 (1) [See rule 40], aggrieved by order dated 11-10-2000 in T.A.No.1023 of 1996 on the file of the Sales Tax Appellate Tribunal, Andhra Pradesh, Hyderabad, against the order dated 6-1 1-1996 made in R.R.No.58/9-97/G.l.No.687B/93-94 (CST) on the file of the Deputy Commissioner (CT) Hyderabad Rural Division, Hyderabad preferred against the order dated^'t 9-0396 made in Assessment No.6878/93-94 (CST) on the file of the Commercial Tax Officer, Rajendranagar, Eta€*

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U

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Between:

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M/s. Cement Corporation of lndia Ltd, Tandur, R.R.District

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...Petitioner

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AND

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State Representative before the Sales Tax Appellate Tribunal of Andhra Pradesh at Hyderabad.

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...Respondent

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Counsel for the Petitioner: SRI TEJPRAKASH TOSHNIWAL

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Counsel forthe Respondent: SRI K. RAJI REDDY, SPL GP FOR TAXES

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The Court made the following: ORDER

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7

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THE HON'BLE SRI JUSTICE P.SAM KOSHY

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AND

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THE HON'BLE SRI JUSTICE LAXMI NARAYANA ALISHETTY

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Tax Revision Case No.128 of2OO4

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ORDER :(per Hon'ble Sri Justice P.SAM KOSHtI)

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The instant Tax Revision Case is liled by the petitioner assailing the order passed by the Sales Tax Appellate Tribunal in T.A.No.1O23 of 1996, dated 11.10.2000

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The appeal of the petitioner was rejected by the Tribunal so far as the issue raised in the present Tax Revision Case is concerned.

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The issue to be considered in the present Ta:: Revision Case is " uhether the responden.t-Department were^justified in leuying tax on High Derusitg Polgethylene (HDPE) u)oue'n sack at par uith tle cement manufactured and sold bg the petitionerestablishme nt or not7

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During the course of hearing, it has been brought to our notice that the present Tax Revision Case was admitted by a learned Division Bench of this Court on 30.08.2004 and it was ordered to be listed along with Special. Appeal Nos.9, 1O and 13 ---) of 200 1, all of which were on the sarne issue.

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2 PSK,.J & LN\ trevc_128_2004 \

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We could lay hands on the decision rendered in Special Appeal No.iO of 2001 which stood decided oo 77.04.2015 by this Court. The Division Bench while taking up the matter framed the same question of law to be adjudicated upon that was " whether the appellant-Dealer hnd established tfe sale of cement and container bags is not an integrated sale?; tuhether the sale of cement and HDPE bags / packing materials, i.e., the containers are distinct and separate sales?; whether ttere uas a contract expressed or implied for such separate sale of cement?". The Division Bench, aJter much deliberation and also taking note of the various judicial pronouncements on the said issue, i.e., including that of the decisions rendered in the cases of M/s.Raj Sheel vs. State of Andhra Pradeshl, Priyadarshini Cements vs. State of Andhra Pradesh2, Commissioner of

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Taxes, Assam vs. Prabhat Marketing Co.3, Jamana Flour and Oil Mill (P) Ltd. vs. State of Bihar4, State of Tamilnadu vs. EID Parry (India| tr1{.s, State of Tamilnadu vs. Subramania

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Chettiar6, Annapurna Insecticides Industries v

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' 1rses1 za s.r.c. ng. :us

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'1rsse1^z2 lesl^{141 (srAr)}

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s 1985 Supp. S.C-C. 31

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61997 SCC OnLine Mad 1375 (1998) 109 SrC 52

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PSK,J & LNA,I irevc 128 2004

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3

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Commissioner of C.T.7, The Government of Madras vs Simpson & Co. Ltd.8, Hindustan Coco-Cola Beverages Rrt Ltd. vs. State of Andhra Pradeshs and Commissioner of Sales Tax, M.P. vs. Gill & Co. Ltd., Ujjainto referred to th<: principles laid down in the above precedents and held at paragraph No.9 as under :

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"9. Hauing regard to the findings coupled u-tith reasons, u)e otlsu)er Point No.l accordinglg holding that the appellant had established that the sale of cement and the HDPE bags / containers is not an integrated sale and that the sale of cement and HDPE bags / packing mateials i.e., the containers are dGtinct and separate sales and that *Lere was a contract for such separate sales of cement and *e bags / packing mateialAs a sequel to the said finding, u.te hnld that the appeal is hnuing meit and, tlerefore, deserues to be allou-ted and tftat the impugned order of the Commissioner, u.thich is controry to facts and legal position obtatning at the releuant time, is liable to be set aside. Po[nts are accordingly anstuered.."

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After giving the said lindings, the Special Appeal stood allowed and the impugned order passed by the respondent was set aside and the order passed by the Assessing Officer stood conflrmed.

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4 PSK,J & L trevc 128 200

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Now, in the instant case, what is required to check is whether in the findings given by the Assessing Officer the facts of the present case were identical to the decision rendered by the learned Division Bench of this Court in M/s.Andhra Cements Company Ltd. vs. Commissioner of Commercial Taxes, Hyderabadrr. In the course of scrutiny, we find that there is a categorical finding given by the Assessing Officer so far as the proof of evidence which was led by the respondentestablishment, and for ready reference the relevant portion of the Assessing Officer is reproduced as under, viz.,

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"N. Fourthlg, regarding proposed leuy of higher rate of to: on inter-stdte sales of packing moteial amounting to {.15,82,472.OO, {.14,62,537.00 respectiuely, assessee has stated that theg haue sold ement with packing mateial i.e., HDPE Bags as per State rate b onlg lok and reqttested to leug tax at 1o/o (basic rate) Contention of the assessee has been uerified uith reference to f since filed and found. in ord.er. hence the lew of tax ls nous reduced. from 7O%" lbdslc ratd to 7%i^(bd.slc rrrtel"

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In the given factual background, if we look into the hndings given by the Hon'ble Supreme Court in Raj Sheel (1 supra), we find that the Hon'ble Supreme Court in very categorical terms held at paragraph No.9 as undff, viz.,

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1r Special Appeal No.10 of 2001, dated 17.M.2015

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PSK,J & LNA,I t.evc 128 2004

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"9.^{It is, therefore, perfecttA plain that the issue as to} uthether the packing material has been sold or merely transfered u.tithout consi.d-eration depenls on the contract betueen the parties. The fact tfat thE packing is of insignificant uolue in relation to the ualue of th.e contents mag implg that there uas no intention to sell the packing, but where ang packing moteial is of signiftcant ualue it may imply an intention to sell the pocking mateial. In a case u.there the patking material is an independent commodity and the pocking material as well as the contents are sold independentlg, the packing mateial is liable to tox on its oun footing.^{Whether a transaction} for^{sale of packing material b} an independent transaction uill depend upon seueraL fat'tors, some of them being:

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Tle packing material is a commodity hauing its own identity and is separatelg classified in th.e Schedule;

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There is no change, chemical or phgsical, in the packing either at the time of packing or at the time of using tLe content;

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Tle packing i.s capable of being reused afier the conte-nts haue been ansumed;

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The packing i-s used for conuenience of transport and the quantitg of the goods as such is not dependent on packing:

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The mere fact that the consideration for the^packing is merged uith the consideration for the product toould not mcLke the sale of packing an integrated^part of the sale of^the produd,.'

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Given the said findings ol the Hon'ble Supreme Court in Raj Sheel (1 supra) and also the lindings given by the I)ivision Bench of this Court in M/s.Andhra Cements Company Ltd.

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,,/

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5 PSK,J & L trevc 128 20

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(11 supra), we find that the issue raised and challenged in the present Tax Revision Case is pari mateia and therefore we are inclined to endorse the view taken by the Division Bench of this Court in M/s.Andhra Cements Company Ltd. (11 supra).

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As a consequence, the im.pugned order passed by the Saies Tax Appellate Tribunal in T.A.No.1023 of 1996 dated 1 1.10.2000 becomes unsustainable, and the same deserves to be and is accordingly set aside. The Tax Revision Case stands allowed. The order passed by the Commercial Tax Officer, dated 19.03.1996 for the Assessment Year 1993-94 stands affirmed. No costs.

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Consequently, miscellaneous petitions pending, if any, shall stand closed.

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\

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SD/. B.S. CHIRANJEEVI JOrNT REqISTRAR

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A //TRUE COPY// I

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SECTION OFFICER

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To, 1 The Sales Tax^{Appellate Tribunal,Hyderabad (with record)} 2 fne Oeputy Commissioner^{(CT) Hyderabad RuralDivision, Hyderabad'} 2 The Commercial^{Tax Officer, Rajendranagar, Hyderabad'}

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4 One CC to SRI^{TEJPRAKASH TOSHNIWAL,Advocate [OPUC]} 5 iwo CCs to SRI K. RAJI^{REDDY, SPLS'C' FORTAXES, High Court for the} State of Telangana^{at Hyderabad.(OUT)}

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Two CD CoPies

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DATED:1110912023

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ORDER

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TREVC.No.128 of 2004

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THE TAX REVISION CASE STANDS ALLOWED

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M/s. Cement Corporation of India Ltd, v. State Representative

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M/s. Cement Corporation of India Ltd, v. State Representative

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