Partly allowed

M/S Raasi Cement Limited, Hyderabad. v. State of Ap, Rep.by State Representative Before Stat, Hyd.

Telangana HC16 Oct 2025TREVC/68/2009

Case brief

AI extract

What is this about?

Batch of eight tax revision cases between cement manufacturers and the State on whether HDPE packing bags are taxable separately or with cement under Section 6C APGST Act. Following Supreme Court precedent, the High Court held bags are taxable separately in favour of assessees; ancillary questions on diesel, fly ash and freight were decided against assessees.

What the court decided

AI extract

M/S Raasi Cement Limited, Hyderabad. Vs State of Ap… — GST and Indirect Tax | Telangana HC (2025)

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134471

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IN THE HIGH COURT FOR THE STATE OF TELANGANA AT HYDERABAD

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THURSDAY, THE SIXTEENTH DAY OF OCTOBER TWO THOUSAND AND TWENTY FIVE

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PRESENT

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THE HONOURABLE SRI JUSTICE P.SAM KOSHY AND

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THE HONOURABLE SRI JUSTICE NARSING RAO NANOIKONDA

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TAX REVISION CASE No.229 oI 2008 TAX REVISION CASE No.29 of 2009 TAX REVISION CASE No.40 of 2009 TAX REVISION CASE No.42 of 2009 TAX REVISION CASE No.43 of 2009 TAX REVISION CASE No .46 of 2009 TAX REVISION CASE No .68 of 2009

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AND

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TAX REVISION CASE No.110 of 2 009

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TAX REVISION CASE No.229 of 2008

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Tax Revision Case under Section 22(1) Read with Rule^.10 of ApGST Rutes U/S APGST Act to revise the order dated 23.06.2008 passed in T.A. No..1033 of 2004 on the file of the Sales Tax Appellate Tribunal, Andhra pradesh, Hyderabad

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Between:

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The State of Andhra Pradesh, rep. by the State Representative before STAT., D No. 5-4-404 to 408, Nampally, Andhia Pradesh, Hyderabad

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..Petitioner

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AND

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Ail/S. Priyadarshini Cements Ltd., Kodad, Nalgonda District

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...Respondent

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Counsel for the Petitioner :SRl SWAROOP OORILLA ( sc FoR coMMERtCAL TAX)

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Counsel for the Respondent: SRI KARTHIK RAMANA PUTTAMREDDY

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TAX REVISION CASE NO 29 0F 2009

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Tax Revision case under section 22(1) of the Andhra r adesh Generar sares Tax Act, 1957 to revise the order dated 29-dB-2008 passed rr - A No.12o5 of 2001 on the file of the sares Tax Appelate Tribunar, Andhra pradesr Hyderabad.

¶22

Between:

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M/S Priyadarshrni Cement Ltg:. fa.Tapyram. Nalgonda D,s rrct. Rep. by its Chief Generat Manager ( Fand A ) Mr GNVSRC K;;;,'-

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...Petitioner

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AND

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Iffi"il?:"r;1ffi:iidJ1gT^{rep. its stateRepresentai,e beroreSares rax}

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... Res pondent

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Counsel for the Petitioner :SRt KARTHIK RAMANA PUTTAL IEDDy

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Counsel for the Respondent :SRl SWAROOP OORTLLA (sc FoR COMMERTCAL TAX)

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TAX REVISION C ASE N O: 40 OF 2009

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Tax Revision case under section 22(1) of the Andhra pr: cesh Generar sares Tax Act, 1957 to revise the order oateo 23-'i0-200g passed in T A No 8 or 2002 on the file of the Sales Tax Appellate Tribunal, Andhra pradesh, H1r erabad.

¶32

Between:

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M/s Raasi cement Ltd ( I\4erged with rhe rndia cement rr ) white House, 3rd iJH!^3:"fii '[ .BesumePet^{niJ",roio- s"00"0i6"R;pov i, j o"',,r,.ri rr,r""]dli}

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...Petitioner

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AND

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The State of Andhra pradesh rep. its State Representatir ( before Sales Tax Appellate Tribunal, Hyderabad.

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..Respondent

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Counsel for the Petitioner :SRl KARTHIK RAMANA PUTTAMII :DDy

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Counsel for the Respondent :SRt SWAROOP OORILLA ( sc FoR COMMERTCAL TAX)

¶40

TAX REVISION CASE NO: 42 OF 2OO9

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Tax Revision Case under Section 22('1) of the Andhra Pradesh General Sales Tax Act, 1957 to revise the order dated 23-10-2008 passed in T.A. No.'l0 of 2002 on the file of the Sales Tax Appellate Tribunal, Andhra Pradesh, Hyderabad

¶42

Between:

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M/S Raasi Cement Limited, [Merged with The lndia Cements Lltd] Rep.by its General Manager [FandA], Mr. G.S.Naidu White House, 3rd Flooi, Block'-lll, Begu mpet,

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...Petitioner

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ANO

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The State of Andhra Pradesh, rep its State Representative before Sales Tax Appellate Tribunal, Hyderabad.

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...Respondent

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Counsel for the Petitioner :SRl KARTHIK RAMANA PUTTAMREOOY

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Counsel for the Respondent :SRl SWAROOP OORILLA

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(sc FoR coMMERTCAL TAX)

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TAX REVISION CASE NO: 43 OF 2009

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Tax Revision Case under Section 22('1) of the Andhra Pradesh General Sales Tax Act, 1957 to revise the order dated 05-09-2008 passed in T.A. No.1332 of 2001 on the file of the Sales Tax Appellate Tribunal, Andhra Pradesh, Hyderabad.

¶53

Between:

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M/S. Raasi Cement Ltd, ( ti/erged with The lndia Cement Ltd) White House, 3rd Floor, Block-lll, Begumepet, Hyderabad- 500 016, Rep. by its General Manager (FandA), Mr. G.S.Naidu

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...Petitioner

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AND

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The State of Andhra Pradesh. rep. its State Representative before Sales Tax Appellate Tribunal, Hyderabad.

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... Respondent

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Counsel for the Petitioner :SRl KARTHIK RAMANA PUTTAMREDDY

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Counsel for the Respondent :SRl SWAROOP OORILLA ( SC FOR COMMERICAL TAX,

¶61

TAX REVISION CASE NO: 46 OF 2009

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Tax Revision Case under Section 22(1) of the Andhra [) adesh General Sales Tax Act,^'1957 to revrse the order dated 23-10-2008 passed rr t A No 7 of 2002 on the file of the Sales Tax Appellate Tribunal, Andhra Pradesh, l-1, derabad.

¶63

Between:

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It//S. Raasi Cement Ltd , [Vlerged with The lndia Cements L:d) White House. 3rd Floor. Block-lll ^B^eg gmpet Hyderabad -500 0'16, Rep. bl ts Generat Manager (F and A), It/lr G S Naidu.

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...Petitioner

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AND

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The State of Andhra Pradesh, rep. by the State Representrr ve before Sales Tax Appellate Tribu nal, Hyderabad.

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...Respondent

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Counsel for the Petitioner :SRl KARTHIK RAMANA PUTTATV REDDY

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Counsel for the Respondent :SRl SWAROOP OORILLA

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( sc FoR coMMER|CAL TA) )

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TAX REVISION CASE NO: 68 OF 2009

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Tax Revision Case under Section 22(1) of the Andhra^p., desh General Sales Tax Act, 1957 to revise the order dated 23-10-2008 passed in A. No.9 of 2OO2 on the file of the Sales Tax Appellate Tribunal, Andhra Pradesh. H I lerabad

¶74

Between:

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M/S Raasi Cement Limrted, [Merged with The lndia Cemen:: Limited,] Rep by its General Manager[ FandA], lVr. G.S.Naidu White House 3rd ftooi, Bioc(ilt. Begumpet, Hyderabad - 500 016.

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...Petitioner

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AND

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The State of Andhra Pradesh, rep. its State Representatrv: before Sales Tax Appellate Tribunal, Hyderabad

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... Res pondent

¶80

Counsel for the Petitioner :SRI KARTHIK RAMANA PUTTAM I IEDDY

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Counsel for the Respondent :SRl SWAROOP OORILLA

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( SC FOR COMMERICAL TAX)

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TAX REVISION CASE NO:^'l'10 OF 2009

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Tax Revision Case under Section 22('l) of the Andhra Pradesh General Sales Tax Act, 1957 to revise the order dated 05-09-2008 passed in T.A. No. 1 333 of 2001 on the file of the Sales Tax Appellate Tribunal, Andhra Pradesh, Hyderabad.

¶85

Between:

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White M/S Raasi Cement Limited, [tr/lerged with The lndia Cements Limited,] House,3rd floor, Block-lll, Begumpet, Hyderabad - 500 016. Repby its General Manager[ FandA], Mr. G.S Naidu

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...Petitioner

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AND

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The State of Andhra Pradesh, rep. its State Representative before Sales Tax Appellate Tribunal, Hyderabad.

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... Respondent

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Counsel for the Petitioner :SRI KARTHIK RAMANA PUTTAMREDDY

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Counsel for the Respondent :SRl SWAROOP OORILLA

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( sc FoR coMMER|CAL TAX)

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The Court made the following: COMMON ORDER

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THE HONOURABLE SRI JUSTICE P.SAM K(] SHY

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AND

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THE HONOURABLE SRI JUSTICE NA sING RAO N' NDIKONDA

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TAX REVISION CASE No .229 of ZOOa TAX REVISION CASE No .29 oJ 2OO9; TAX REVISION CASE No.4O of 2OO9; X REVI I CASE No.42 9 TAX REVISION CASE No. 43 of 2OO9; TAX REV SION CASE No. 46 of 2OO9: TAX REVISION CASE No. 68 of 2OO9; AND TAX REVISION CASE No.11O of 2OO9

¶100

COMMON ORDER: i )!:t a,1e tla )'b!e Sii lustrce ?.Satn Kosn'/)

¶101

Hearo Mr. Kai-thik Ramana Puttamreddy, learnec ounsel fo i- the petiticner in Tax Revision Case Nos.29, 40,42,43,46,5a & r 10 cf 2009 a;rd for rne respondent in Tax Revision Case Nr...22! of 2008; and Mr. Srnrai-oop Oorrlia, learned Standing Counsel for (- rmmercial Tax aDpealng on behaif of tire petitioner - State in Tax Revis ( n Case lrlo.229 ci 2003 and tor the respondent in Tax Revision Case Nos. '9,^{10, 42, 43,} 46, 68 & 110 of 2009.

¶102

Thes: are eiqni Tax F.e',,isiori Cases fileri ui,Je!- Serr on 22(1) read with Rule 1C of the Ancihra pracesh Gooa's anC Ser,,ce Tax Ruies (hereinai-tei- referred to as 'APGST Rules') irnCer the rr rdhra pr-adesh Goods and Service Tax Act, 1957 (her-einafter i-eferr-e.J to ; s 'ApGST Act,) .nailengirrg the orCers passed b.,; tiie Saies Tax Apoeiiate^-:- ounal, Andhr-a Pradesh, r..lvde;-abao (her-einaftei- referi-ed tc as the^,STAT,..'Ihe details of

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Page 2 cf 15

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each of the case;^{like the assessmentyear, whetherthe Revision is filed} by the State or the^petitioner /^{assessee,ano the Tax Appealnumber} along with dates^{in each of the casesare reproduced hereunder:}

¶105

No. sl.	TREVC. No	ASSESSMEN YEAR ^iI	rnEvE'irleoairHEI AssEssEEoRsrArEl	^{ttapucneoonorn} VrypEEQIALLINcE
1	229of2OoB	1992-93	State	T.A.No.1033of2004 Decided on23.06.2008
2	29of2OO9	1993-94	i Assessee^(M,/s. Pnyadarsh rniCement^Ltd)	T.A.No.1205of2001 Decrdedon 29.08.2009
3	40 of2OO9	1993-94	Assessee(M/s,Raast CementLtd)	T.A.No.8of2002 Decided on23.10.2008
,..-] 4	42cf2009	19939	Assessee(l\4/s.Raasi CementLtd)	T.A.No.10of2002 Dec,Cedon23.10.20C8
5	43af2OO9	199r-92	Assessee(M/s.Raasi Cement Ltd)	I.A.No.1332of20C1 Decrdedon05.09.2008
6	46 of2OO9	1991-92	essesiec⁽t''t^.^naas, Cernent Ltd)	T.A-No.7of2002 Decrdedon 23.10.2008
7	68of2C09	1992-93	AisesseeiM7s.nuas, CementLtd) L	IA.No.9of2002 Decidedon23.r0.2008
8	110of2009	1992-93	n-esseelt"t7s.naas, CementLtd) l	No.1333oF2001 DecrdedonO5.09.2OO8 rA

¶106

In all these cases^{Since the point of Contention iS Same,they have} beerr iaken up and^{heard togethei-and are dccided b',' this Cc''nmcn} Order.

¶107

4.ThequestionoFlawWhichWaSprimarilyraisedbythepetitioner/ assessee as also by the Revenue^{in their respectivecases that they have} filed is^"whether the HDPE bags used for^{packing cementshould be taxed} separatelv at a lower rate or tcgether^{with cement at a higher rate under} Section^{6C of the} APGST Act?"

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Page 3 of 16

¶109

In addition, there appears to be certain additiorr ti^questions also raised in these Tax Revision Cases, which are:-

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a) Whether the diesel issued to the transporters or-) i-eturnable basis anC which was not returned constitutes taxable sair^?

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b) Whether tax could be levied on the undocument€⁽ fly ash used by the assessee in the manufacturing process?

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c) Whether tax on freight relating to^purchase of cn ore could be lev ied ?

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For convenience, we first intend to take up the fir! -^questron oF law which is running through in all these Tax Revision Cases nciuding the Tax Revision Case which has been filed by the State i.e. "rl rether the HDPE bags used for^packrng cement should be taxed separatoi / at a lower rate or together^ir'.,iin cement at a higher rate under Section iC of the APGST A :'l)

¶114

In ihe Tax Revision Cases reflected at Sl.Nos.2 t r B in the table reproduced above, the STAT has held that HDPE bags ur ed in packing of cement being an integral part of the sale, it has to be axed along with cement at a hiqhei- r-ate. Just contrary to this is the find r g of STAT in the Tax Revision Case filed by the State reflected at Sl,l'.J ).1 in the table reproduced above n rvhich the STAT has taken an al:,gether opposite

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Page 4 of 16

¶116

stand that the^{HDPE bags and cement are two distinct entitiesand} therefore they^{have to be taxed separately and in the process held that} the HDPE^{bags have to be taxed at a lesser rate and cement has to be} taxed at a^higherrate.

¶117

In the Tax^{RevisionCasespreferredby the assessee'we find that} the Commercial^{Tax Officerinitiallyhad granted exemption on the packing} material turnover.^{However,the DeputyCommissioner subsequently} initiated^{revisionalproceedingsand revised the order of the Commercial} Tax Officer^{holding that the HDPE bags used for packingcements would} not be entitled^{for exemption and that it has to be taxed at the cement} rate under^{section6C of the APGSTAct' Aggrievedby the said order'the} respective assessee's^{preferredTax Revision Casesbefore the STAT} where the^{impugned orderswere passed and which are underchallenge} before this^Court'

¶118

In respect of^{the Tax Revision Case preferredby the Revenue, the} 7992-93 ordered^for Commercial^{Tax Officer, for the assessment year} levying tax on^{HDPEbags along with cement at the rate fixed for} cements.However,onanappealpreferredbytheassessee'theAppellate Deputy Commissioner^{reversed the order of the CommercialTax Officer} vide order dated^{25.04.1999 holding that the HDPEbags and cement} were to be taxed^{separately'The order ofthe APPellate DePutY} Commissioner^{wassubjectedto chaiienge before} the Additional^DePutY

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Page 5 ot 16

¶120

Commissioner and the Additional Deputy Commission( r vide order dated 18.10.2002 affirmed the order passed by the Commer.r ial Tax Officer. It was this order of rhe Additional Deputy Commis; cner rvhich was subjected to challenge by the assessee beFore the 5i^-AT, which stood allowed by the STAT vide order dated 23.06.2008, arl which is under challenge before th is Court.

¶121

So far as the ground whether the HDPE bags rad io be taxed independently or it has to be taxed along with its conte -. i.e. cement, the contention on behali of the assessee is that the STAT h.r, previously ruled in their iavor- on iCentical facts for assessment years 1; )l-92 and 199293, decisiorrs that were confirmed by the High Court. Thi assessee argues that since the irrvoice formats and selling terms reme n simila. across these assessrnent periods showing separate pricing for r:3ment and HDpE bags, the same iavo.able treatment should apply. F r rthermore, they assert thai invoices themselves constitute contracts br: rr,reen buyer and seiler, evidencing impiied separate sales of packing mati, ial.

¶122

ihe contention of the assessee all along was t tat ihe prlmary question oi law framec in this batch of Revisions stood I ready settled by the Supreme Court in the case cF Raj Sheel and Oth€rs vs. State of A.P.1. Likelvise, in the case oF M/s. priyadarshini Cerneni; Ltc. also it was settled bv the High Corrt that HDpE bags was being su I ected to second

¶123

1989 3 SCC 262

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Page 6 of 16

¶125

sale and the cost of^{HDPE bagswas not exigableto tax and that the} turnover for the^purchase of^HDPE bags^{was entitled for exemption.}

¶126

L2. It was also the contention^{of the assessee that the packingmatei-iai} is a commodity having its own^{identity and is separateiy classified.It was} also contended that there is no^{change, chemical or physical in the} packing either at the time of^packing or at the time of using^{the contents} and the^packing is capable cf^{being reusedafter the contents have been} consumed. Further, the^{packingmaterialis used for convenienceof} transport and the^quality oF^{goods as such is not dependent on packing.} This test is also satisfied and cement is^{oackedin bags only for} convenience of ti-anspcrt and the^{quality of cement does not depend cn} HDPE bags.

¶127

It rvas further contended by the^{assesseethat if the consideration} for packing is merged with the consideration^for the^{product would not} make the sale of^packing an integrated^{part of the sale of the product.In} the^present case, in fact, the^{packing materialis separatel'/charged.}

¶128

It was lastly contended by the assessee^{that thereis a separateand} independent sale of the^{packing materiai} and^{it is taxableon its own} footing and not at the rate applicable to the contents.

¶129

The learned Standing Counsel for Commerciai Tax,^{while opposing} the Tax Revision Cases filed by the assessee, as also^{while addressing the}

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Page 7 of 76

¶132

Tax Revision Case oreferred by the^{State has contendtl I that the HDPE} bags will iose its own^{identity the moment cement s packed in it.} Therefore, what was soli^{would be} the^{packedamountqs the assessee} was not engaged^rn the business of^{re-sale oF pacK I g material, the} question of assessee having any express or implied i!^{reement to sell} packing material separately to customers along with : )ment^{does not} arise. Any split-up of the ,Driceⁱⁿ the^{sale invoiceas pr ( 3 of the cement} and price of^packirlg rraterial, the^{HDPEbags tantani} 'unt^{to artificial} bifurcation of the^price of^{cement only to avoid paymenrlf higher rate of} tax on the^packing rnaterial under Section^{6C of the APG:;t Act.}

¶133

The learnec Standing Counsel for^{Commerri rlTax further} contended that l-he STAT failec to analysis the^facts cf^{, e case properly} and mechanically allowed the case. That the^{HDPE Bags ; re primaryused} for oacking of cement anC sele of cement.^Thus, withotr^{bags the same} cannot be visualized and the value of the bag^{is iess t ran 10o/o of the} value of cement. Ti'e^prcperty in bags^passes on to the^{ustcmersalong} with the cement. Ticr,:fore, it is an integrated / corr,cc site^{sale of the} cement and the bags and a consolidated consideration^{vt ruld be received} from the customers. There was no agreement either el(^)ress or^implied between the assessee and the customers for separate s; e of^{bags while} selling cement. In the absence of such agreement,^{the1r lnsaction would}

¶134

Page 8 of 16

¶135

be regarded composite^{transaction involvingsale of cement and packing} material like HDPE bags^{for a fixed consideration.}

¶136

L7, It was further^{contended that an order of STATmechanically} allowing the case of the^{assesseewithout any justification is also} prejudicial to the interest of Revenue^{warranting revision under section} 20 of the APGST^Act. In^{this regard, the judgmentof MaruthiFasteners} Ltd, vs. State of A.P.2^{was reliedupon.}

¶137

18, According to the^{learnedStanding Counselfor Cornmercial Tax, the} judgment in 94 STC 24 relied upon by the assessee^{reiated to a Tax} Revision case under sectlon^{22 of the APGSTAct before the High Courtof} A.P. A Tax Revision Case to^{the High Courtis maintainableonly whenthe} STAT decides any^{qL:estion of iaw or on fact erroneously. such a situation} does not arise ai all here^when the^{judgment of STAT in Tax Appeal} No.553 of 1995, dated 13.02.1997,^has a direct^{bearingto the facts oF} th is case.

¶138

it was aiso the contentlon of the^{learned Standing Counselfor} Commercial Tax that in the original assessment order^{the STAThad came} to the conclusion that there was no agreement either express^{or implied} to sell HDPE bags separately. Therefore, there was composite^saleoF cement and bags. Ho/ever, the STAT took a different stand that there

¶139

' 30 APSrJ 212

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Page 9 of 16

¶141

was a separate sale of HDPE bags and they would be .i xable at the rate applicable under the entry instead oF under Section 6C,,f the APGST Act The splitting up of the value of cement and cost of packi)g material in the sale invoices is done for obvious reasons and ih: is undoubtedly permitted under the Indian Law as held by the Suprr me Court in Mc. Dowells case (59 Sf C 227).

¶142

20, it was further contended by the learned Stafr ling Counsel for Commercial Tax that as held by the STAT in Bharat Ca. l Cola's case (46 APSTJ 49) the sale invoices themselves withcut l rv corroborative evidence establish the agreements between the p; r ties. In such a situation, the grani of exemption by the STAT on the ,. I re of the packing materials in effectuating the orders of the Appellate Ll thority is rightly withdrawn by the Revisional Authority !-estoring the oli I^{inal assessment} order and.;udgment in lt4/s, Priyadarshrnr Cernents vritrut,verifying the facts in that case the facts in the present case are at vil ia nce. Each case has to be decided on its own set of facts and relative me r ts.

¶143

2L, It was also the contention of the learned Starrr ing Counsel for Commercial Tax that all the judgments reiied upon by ire assessee had been extensively deait with in Tax Appeal No.553 cf 1995, dated 13.02.1997, and those^judgments were cleariy distinguis red to the effect that in those^{jirdgi-renr-s} both the STAT and the cc,rcerr r d High Court on facts found that there M/as a separate agreement Fo. sale of packing

¶144

fI-

¶145

Page 10 of 16

¶146

material and the contents and the value of packing material was separately charged in the bills. In the present case, there was no agreement for saie of packing materials separately.

¶147

It was lastly contended by rearned Standing counser for commerciat Tax that in the absence of any agreement between the sefler and buyer, it is clear that the HDPE bags soid along with its content is a composite sale. The splitting up the value of cement and packing material in the sale invoice is not conclusive in the light of judgment of the supreme Court in Bharat coca cola vs. state of A.p.3, thus. the Revisionar Authority has rightly proposeci revision under Section 2O(2) of the ApGST Act.

¶148

23, Having heard the contentions put forth on either side and on perusal of records, it would be relevant at this juncture to take note of the judicial precedents on the subject matter.

¶149

The predominant case in this context is that of Raj sheer and others (supra), wherein uncei- simirar circumstances, the supreme Court dealing with the issue held at paragraph Nos.9 and 10 as under:

¶150

"9, It is, therefore, perfectly plain that the issue as to whether the packing materiai has been sold or merely transferred without consideration depends on the contract between the parties. The fact that the packing s of insignificant value in relation to the value of the contents may imply that there vlas no intention to se the packing, but where any packing material is of significant vatue it may impiy an intention to sell the packing material. In a case where

'q6^APsrjq9

Page i1 of 16

-a--a

the packing^{material is an independentcommodity an i} the packing material as vtell as the^{contents are sold indepencientl;,} the packing material is tiable to tax^{an its own footing.Whethera t-'} nsaction for sate of^{packtngmaterial is an indepenCenttransacticl} will depend upon several faciors,^{some of themberng:}

¶155

"1. The packing material^{is a commaditYhet ng its own} identity and is separatety^{classifledin the Schedtl;}

¶156

There is no change,^{chemicai or physical,ti) thepacking} either at the time of^{packing or at the time fusingthe} content;

¶157

The^{packing is} capable^{of being reuseC after he contents} have been consumed;

¶158

The packing is used^{for .onvenienceof trans )art and the} quantity of the goods as such is not^{dependent6r p1cking:}

¶159

The mere iact^{that the cansideration for t't t packing is} merge,l with the consideratnn^{for the proci,icttat t ild not make} the sale of^{packing an integratei part tf thi sale cf the} product. "

¶160

In one case, Punjab^{Distitling IndustriesLtd. v. C:T :\IR 1959SC} 346 : 1959 Supp^{1 SCR 683 : (1959) 35 ITR5191 v''hee the bottles} were sald by the assessee^{under a buY-back schemt, the securitY} deposit for the return^{of the bottles was held to be r lerehy' in the} nature of an incentive^{to the buyer to returnthe battl€t}

¶161

70.......1f the transaction^{is one of sale of the goods cr} 'y, clearly^all that can be taxed^{in fact is the sale of the} ?acds,^andi .'t e rate to be applied must be read rn the case^{of such goods. It ma} , be :hat the price of the goods is determined upon a^consideratrt n of several components, including the^{value of the packinE} ' )aterEl, but nonetheless the^{price is} the^{price of the gcods. Itts} not cpen to anyone to say that^{the value cf the differentcontlt} 'nents^which have entered into a determinatian^{of the price of the} Toods^should be anatvsed and separated, in^{order that difiereni} rates of tax should be apolied according^{to the characterof the c:} nponent^(for example,^{packing material). l'Vhat Section 6-Cintends,} : lay down is that e,/en upcn such^{analysis the rate of tax to be.} )Dlied to the component^{vriil be the rateapplied to the goods th)} ,tselves. And that is for lhe^{simDle reason that it is the prrce cf ti i} goods alone which constittLtes the^{transactian betweet' the dt:,} ler and the

¶162

Page 12 ol l6

¶163

purchaser. No matter whai may be the component which enters into such price, the parties understand between ihem that the purchaser is paying the price of the goods. Section 6-C merely clarifies and explains that the comDonents v,rhich have entered into determining the price of the gcods cannot be treated separately from the goods themselves, and that no account was in fact taken of the packing material when the transactrcn took place, and that if such account must be taken then the same rate must be applied to the packing material as is applicable to the goods themselves. We find it difficult to accept the conteniicn of the appellants that a rate applicable to the packing material in the Schedule should be applied to the sale of such packinE material in a case under Section 6-C, when in fact thefe was no such saie af packing material and it is only by legai fiction, and for a llmited purpose. that ;uch sale can be contenplated......"

¶164

In the case of Andhra Cements Company Limited vs. Commissioner of Commercial Taxes, Hyderabada, the High Court of Andhra Pradesh at Hyderabad also in somewhat similar factual backcjrop following the^judgment of Raj Sheel and Others (supra) held as under:

¶165

"The question as to whether there is an agreement ta sell packing materia! is a pure .iuestion of fact depending upon the circumstances found in each case."

¶166

In Jarnana Fiour & ail !\li!i (P. ) Ltd. v. State of Bihar [1987] 65 STC 462 (SC), tne SLiprerne Ccurt hed considered the ratio in the before- mentioned cited case. In State cf Tamil Nadu v. E. i. D. Parryt (India) Lid. [1998] 109 STC 146 (l4ad) the fa.ts show that the respondent-dea ler had sold sugar, a controlled and exempted commodity. in gunny bags anci chemicals in plastic jerricans. The assessing authorit/ brought to tax an estimated turnaler of gunny bags and the turnover of plastic jerricans for the years, which are relevant. He had disallowed the exemption under section 6(2) cf the Central Sales tax Act, 1956 for failure to file the declarations in form E-1. On appeal, the Appettate Assistant Commissioner had atlowed exemption on the gunny bags and confirmed the assessment order in other respects. The respondent appealed to the Tribunat contending far the first time that ti)ere v'!as no sale of the polythene

¶167

t lzcls; sz vs: 431 : 2c1 s scc on.Lile Hv. 19)

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Page 13 of 16

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jerricans and that the deposits which were colle: ed from the customers therefor were returned when the cans^wert) -eturned. The Department had filed enhancement^petitions tn it ;oect of the turnover af gunny bags. The Tribunal had¹ s,.nrs-sed the enhancement^petitions and ordered^{remand of the oe} tier's appeals in two respects, i.e., in respect of the cclle:tion oi^t :;:osit for the sale oi chemicals in the polythene lerricans and^ref,.t,'t I af ihe same as and when the said cans were returned,^bes des allowing exemptian therefor ; and in respect of the exenption⁽ aimed on the basis of El forms to consider the^genuineness cr.t terwise of E7 forms and to grant relief therefor. The High Court af f'ladras vvh ile answering the^{question-whether} the^gunny bags,^in,1 hich sugar-a controlied commodity-is packed and sold s assessat^I 'to^{sa les tax,} by including it in the turnover of the assessee,^r"l en especially sugar is exempt from tax hacj held as follovts^(pa l '^{153 in 149} STC):

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"on the face of the rationale or reasontng, as prali tec in the decisions referred to above, it goes without saying hat in the instant case aiso, gunny bags, in which suEar ati exenpted commodity-is packed and solC cannot at all b! aid to be exempt from tax on the^ground thai ihe cont:t ts of the container are exempt from tax."

¶171

It is not cut cf place to state that in Raj Sheel case^r 9B9l 74 STC 379 (SC) the Supreme Court upheld the validity of ser :ion 6C which was inserted by Act 11 af 1984 and ha,l held that th€ ;a ici provision vtas only clarificatory in nature and observed tha'. the^question vlhether there was actual sa!e of coniainers or not t; i question of fact to be determined on the facts of each case. l,-.; her, in R aasi Cement Ltd. v. Ccmmercial Tax Officer, Miryatagtri' t19971 106 STC 169^(AP) , (1997) 24 APSTI 100, the constituii) tal validity of section 6C after its amendment as amended by Act 2, af t995 with effect from Aprll 1, 1995 feli for consideration. This c.L rt haC 'Jpheld the constituticnal validity of the provision in the saro d, cisicn. "

¶172

R.ecently, this High Ccurt again had an occasion r f hearing a similar

¶173

matter in the case of M/s. Cement Corporation of Ir dia Ltd. vs. State

¶174

Representative before the Sales Tax Appellate Tr bunal of Andhra

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Page 14 oF 16

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Pradesh at Hyderabad^s wherein relying upon the^judgment of Raj Sheel and Others^(supra) and Andhra Cements Company Limited

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(supra) this High Court at paragraph Nos.9 and 10 has held as under:

¶178

Given the said findings of the Hon'ble Supreme Court in Raj Sheel ( 1 suprat and alsa the finCings given by the Division Bench of this Court in M/s.Andhra Cements Company Ltd. (11 supra), we find that the issue raised and challenged in the present Tax Revision Case is pari materia and therefore we are inchned to endorse the view taken by the Division Bench of thrs Court in M/s. Andhra Cements Conpany Ltd. (1i supra).

¶179

As a consequence, the inpugneo order oassed by the Sales Tax Appellate^Tribunal rn T.A.No.1023 oi 1996 dated 11.10.2000 becomes unsustainable, and the same deserves tc be and is accordingly set aside. The Tax Revtsion 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."

¶180

Further, what is also reflected is that the STAT which has passed the impugned orders itself has in the past held that circumstances beyond doubt go to prove that ther-e was an implied conti-act of sale in respect of the disputed HDPE bags. and the tests laid down by the Supreme Court rn Raj Sheel and Others (siipra) were applied and satisfied. On a careful consideration of the relevant aspects, havrng dile regard to the totality of the facts and circr.imstances of the case, the STAT had held that it cannot persuade itself to accept the contention of the State for to endorse the views expressed Dy the lo//er authorities lvhich were found by STAT to be erroneous in the above cited dlscussions. On the other hand, the STAT

¶181

5 Tax Revision Case No.128 ol 2OO4, decided ofl ii.09.2023

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Page 15 of 16

¶183

was satisfied that the orders under appeal, rend(r ed by the lower authorities are erroneous, invalid and unsustainablr: as rhe disputed turnover relates to second sales of HDPE bags.

¶184

There is also no dispute that the assessee has prrchased the HDPE baqs from locally registered dealers who suffered tax ls is evident from the set off given to the assessee in the assessmenr' orders. When the assessees' are selling the same along with the cem: rt during relevant years cf assessment, the said HDPE bags are only s::.nc sales and as such the turnorrer pertaining to the cost of HDPE baLi, is not exigible to tax. On the other hand, it is eligible for exefitptron.

¶185

From all the facts and circumstances of the ca ;e, we are of the considered opinion that the findings given by the STA i insofar as the Tax Revision Case reflected at Sl.Nos.2 to B of the ti tle r-eproduced ln paragraph No.2 of this order is not sustainable and tir ) prirnary quest!on of law raised in these batch of cases so far as rivhei ler the HDPE bags used for packing cement should be tax separatel) t a iower rate or together with cement at a higher rate is ansurerec in favoi:r of the assessee and against ihe Revenue holding that i: nas to be taxed separately. The^Tax Revision Case Nos.29, 40,42, 46, 68 & i00 of 2009 accordingiy stand partly allowed. !_ikewise, tl.t iax Revisi6n g65s I'to.229 of 2008 irrhich is filed by the State is cne whi h is in accordance with the judicial orecedents on the subject matter. Fr> the same reason,

¶186

f-r

¶187

Page 16 of 16

¶188

the Tax Revision Case No.229 of^{2008 being devoid of merit, deservesto} be and is accordingly dismissed^{affirming the findingsgiven by the STAT.}

¶189

However, so far as the^{challengeby the assesseeto the other} questions Iike the diesel issued to the transporters on returnable^basis which was not returned,^levy of^tax on^{undocumentedfiy ash and levy of} tax on freight relating to^purchase of^{iron ore, this Court is of the} considered opinion that since the^{assesseehave failed to substantiate} their contention, the^{questions so raised are decided against the assessee} and in favour of the Revenue^{warranting no rnterference to the findings} given by the STAT on these issues.

¶190

As a sequel,^{miscellaneous petitions pending ii any, shall stand} closed. However, there shall^{be no order as to costs.}

¶191

SD/. K SRINIVASA RAO JOINT REGISTRAR

//TRUE COPY//

SECTICN CFF!CER

To,

The Sales Tax Appellate Tribunal, Andhra Pradesh. Hyderabad 2. One CC to SRI SWAROOP OORILLA (SC FOR COMMERICAL TAX) [OPUC] 3 One CC to SRI KARTHIK RAMANA PUTTAIVREDDY Advocate [OPUC]

¶196

Two CD Copies

ly AD}(/ABK

HIGH COURT

DATED:16/10/2025

COMMON ORDER

TAX REVISION CASE No.229 of 2008; TAX REVISION CASE No.29 of 2009; TAX REVISION CASE No.40 of 2009; TAX REVISION CASE No.42 of 2009; TAX REVISION CASE No.43 of 2009; TAX REVISION CASE No.46 of 2009; TAX REVISION CASE No.68 of 2009;

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AND

¶204

G
o
't:')i-) 04 L t, uus ' I
i

¶205

TAX REVISION CASE No.110 of 2OO9

¶206

PARTLY ALLOWING THE TREVC Nos.29, 40,42,.t),46,68 & 110 of 2009 and DISMISSING THE TREVC No.229 of 2OOti

¶207

WITHOUT COSTS

¶208

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