ivil Appeal No 103 of 1975
From the Judgment and Order dated 1941974 of the Patna High Court in Taxation Case No 21 of 1970
SK Dhingra and KB Rohtagi for the Appellants
D N Goburdhan and D Goburdhan for the Respondents
The Judgment of the Court was delivered by RANGANATH MISRA J
This appeal is by special leave
Challenge herein is to the decision of the Patna High Court rendered on a reference under Section 331 of the Bihar Sales Tax Act 1959
The following question was referred to the High Court for its opinion by the Commercial Taxes Tribunal of Bihar 1049 Whether in the facts and circumstances of the case the direction of the Tribunal to ascer tain the price of the containers gunny bags of wheat products sold for an all inclusive price under the provisions of the Roller Mills Wheat Products Price Control Order 1964 for taxing the same at a higher rate of 4 12  is legally valid For the year 1964 65 the assessee a registered dealer under the Bihar Sales Tax Act returned a gross turnover of Rs5339981 which was accepted by the assessing officer
He determined the taxable turnover at Rs5279962 representing sale of wheat products taxable at 2 per cent
He found that the dealer had sold gunny bags in which wheat products had been packed and determined its turnover at Rs 137150 and assessed the same at 4 12 
The First Appellate Authority on assessee s appeal held The learned Assessing Officer was not justi fied in adding back the price of container in the gross turnover
What he should have done is to tax a portion of the taxable turnover at a different rate or in other words out of the turnover taxable under the Bihar Sales Tax Act the price of bags calculated  Rs
O70 paise per hundred kilogram should have been deducted and taxed  12
The remaining was to be taxed 2 The dealer filed a Revision before the Tribunal and contended that the demand of sales tax payable at different rates on the calculated turnover of gunny bags was not at all warranted as no price had been charged for the contain ers
The Tribunal found 1 The dealer transferred the property in the gunny bags the packing material to the purchasers for price
2 The price of the gunny bags was included in the consolidated rates of price charged by the dealer
3 There was an implied agreement for the sale of gunny bags between the dealer and the different purchasers to whom the wheat products were supplied
4 The transfer of gunny bags was impliedly covered by the contract of sale with regard to the wheat products
1050 On these findings the Tribunal held We hold that the learned lower courts were justified in levying tax at a different rate on the turnover on account of sale of gunny bags in which the wheat products were sold
 It further found The learned Deputy Commissioner has given a direction for determination of the turnover on account of sale of gunny bags
On being asked the applicant accepted that the accounts maintained by him would reveal the exact number of gunny bags used in the trans action of sale under consideration as also the price of the same
Hence we direct in modifi cation of the orders passed by the learned Deputy Commissioner in this behalf that the learned Assessing Officer should ascertain from the accounts the turnover on account of sale of gunny bags as container of wheat products during the period under consideration and assess tax thereon at the prescribed rate of 4 12 
The balance turnover shall be assessed at 2 Reliance was placed on the provisions of clause 3 of the Roller Mills Wheat Products Price Control Order 1964
That clause provides 3
Maximum ex mill prices of wheat products
No owner or other person in charge of a roller mill shall sell or offer for sale ex mill any of the wheat products specified in column 1 of the Schedule II to this Order  a           b In the State of Maharashtra excluding Greater Bombay and in any other State not being a State specified sub clause a to which this Order applies at a price exceeding the price specified against the clause 3 thereof
Explanation  The prices referred to in this clause are i Exclusive of 1051  a            b           ii for net weight inclusive of the cost of the bag but where wheat products are sold in cloth bags in quantities of 40 kgs
net 20 kgs
net and 10 kgs
net a sum of 70 np
37 np
and 19 np
respectively towards the cost of the cloth bag may be charged in addition to the said prices
 In our view the Tribunal rightly came to the conclusion that there was implied agreement of sale of the gunny bags
Admittedly gunny bags are a different commodity and sale thereof is assessable to tax at 4 12 
It is not disputed that appellant bought gunny bags for packing wheat products for the purpose of sale
The Control Order contemplates a net weight which means that the weight of the bag is includ ed in the price to be charged by the dealer
Under the explanation when packing is done in cloth bags a higher rate is admissible
The scheme clearly suggests that the price of gunny bags is inclusive and where cloth bag is used a higher price over and above what has been provided for ordinary containers is permitted
This Court in Commissioner of Taxes vs Prabhat Marketing Company Ltd 19 STC 84 has held In Hyderabad Deccan Cigarette Factor  vs The State of Andhra Pradesh 17 STC 624 it was held by this Court that in a case of this description what the Sales tax Authorities had to do was to ask and answer the question whether the parties having regard to the circumstances of the case intended to sell or buy the packing materials or whether the subject matter of the contracts of sale was only an exempted article here exigible to tax at redical rate and 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
 In that decision it was further pointed out that the ques tion as to whether there was an agreement to sell packing material was a pure question of fact depending upon the circumstances found in each case
The Tribunal and the High Court have recorded a clear finding that there was an im plied contract for sale of the gunny bags along with the products contained therein
1052 In this Court the assessee filed an affidavit and produced a communication purporting to be of the Regional Director Food Eastern Region Government of India dated July 23 1957
This not being the part of the record and the affidavit having been filed at a belated stage has got to be rejected
There is no scope to dispute the assessability of sales tax on the turnover of gunny bags
This appeal fails and is dismissed
Parties are directed to bear their own costs
APJ Appeal dismissed


Summary:
For the year 1964 65 the assessee a registered dealer under the Bihar Sales Tax Act 1959 returned a gross turn over of Rs5339981 which was accepted by the Assessing Officer
He determined the taxable turnover at Rs5279962 representing the sale of wheat products taxable at 2
He found that the dealer has sold gunny bags in which wheat products had been packed and determined its turnover at Rs137150 and assessed the same at 4 12
The First Appellate Authority on assessee s appeal held that the Assessing Officer was not justified in adding back the price of container in the gross turnover
What he should have done is to tax a portion of the taxable turnover at a different rate or out of the turnover taxable the price of bags calculated at the rate of 70 paise per 100 kilogram should have been deducted and taxed at the rate of 4 12
The remaining was to be taxed at the rate of 2
In the revision before the Tribunal the assessee con tended that the demand of sales tax payable at different rates on the calculated turnover of gunny bags was not at all warranted as no price had been charged for the contain ers
The Tribunal held that the lower Courts were justified in levying tax at a different rate on the turnover on ac count of sale of gunny bags in which the wheat products were sold and directed that the Assessing Officer should ascer tain from the accounts the turnover on account of sale of gunny bags as container of wheat products during the period under consideration and assess tax thereon at the prescribed rate of 4 12
The balance turnover shall be assessed at 2
In the reference the High Court affirmed this view
Dismissing the appeal 1048 HELD 1
The Control Order contemplates a net weight which means that the weight of the bag is included in the price to be charged by the dealer
Under the explanation when packing is done in clothbags a higher rate is admissi ble
The scheme clearly suggests that the price of gunny bags is inclusive and where cloth bag is used a higher price over and above what has been provided for ordinary containers is permitted
1051C D Commissioner of Taxes vs Prabhat Marketing Company Ltd 19 STC 84 referred to 2
The Tribunal rightly came to the conclusion that there was implied agreement of sale of the gunny bags
Admittedly gunny bags are a different commodity and sale thereof is assessable to tax at 4V1
It is not disputed that appellant bought gunny bags for packing wheat products for the purpose of sale
1051C 3
The question as to whether there was an agreement to sell packing material is a pure question of fact depending upon the circumstances found in each case
1051G H 4
The Tribunal and the High Court in the instant case have recorded a clear finding that there was an implied contract for sale of the gunny bags with the products con tained therein
1051H