vil Appeal NO 186875 of 1986
From the Judgment and Order dated 2821986 of the Andhra Pradesh High Court in WP Nos
10181 of 1983 11830 4677 4763 4778 of 1985 4926 4935 and 4948 of 1986
308 AK Ganguli AK Sen Shanti Bhushan Harish N Salve section Krishnan JB Dada Chanji Mrs AK Verma Joel Pares R Dave A Subba Rao Sunil Kumar Jain Vijay Hansaria K Srinivasa Mufti Kailash Vasudev Nauni Lal ATM Sampath R Karanjawala Mrs M Karanjawala and HS Anand for the Appellants
MK Banerjee Solicitor General B Datta Additional Solicitor General TVSN Chari Ms Sunita and Ms Vrinda Grover for the Respondents
The Judgment of the Court was delivered by PATHAK CJ
These appeals are directed against the judgment of the High Court of Andhra Pradesh dismissing several writ petitions filed by the appellants challenging assessments made under the Andhra Pradesh General Sales Tax Act 1957 on the value of packing material at the rate ap plicable to goods packed therein
The appellants in some of the appeals are manufacturers of or dealers in beer the appellants in the other appeals are manufacturers of or dealers in cement
The beer is sold in bottles packed in cartons
The cement is sold in gunnies
Section 5 of the Andhra Pradesh General Sales Tax Act hereinafter referred to as the Act  provides for the levy of sales tax on the turnover of goods at the rates specified in that provision
In the case of goods mentioned in the First Schedule to the Act tax is leviable at the rates and at the point of sale specified therein
In the case of goods mentioned in the Sixth Schedule likewise tax is leviable at the rates and at the points specified therein
Item 19 of the First Schedule speaks of Containers other than gunnies and bottles 
These goods are subject to tax at the rate of 5 paise in the rupee at the point of first sale in the State
Item 123 of the First Schedule enumerates glass and glassware  which is subject to sales tax at 9 paise in the rupee at the point of first sale in the State
In respect of cement tax is leviable by reference to item 18 of the First Schedule at the rate of 10 paise in the rupee at the point of first sale in the State while gunnies formerly mentioned under item 67 of the First Schedule and now included in item 157 of that Schedule are subject to tax at the point of first sale in the State
And beer is covered by item 1 of the Sixth Schedule under the category Country Liquor  taxable at the rate of 10 paise in the rupee at every point of sale other than at the point of last sale at which point the rate is 5 paise per rupee
309 Clause s of Section 2 of the Act defines turnover  to mean the total amount set out in the bill of sale or if there is no bill of sale the total amount charged as the consideration for the sale or purchase of goods whether such consideration be cash deferred payment or any other thing of value including any sums charged by the dealer for anything done in respect of goods sold at the time of or before the delivery of the goods and any other sums charged by the dealer whatever be the description name or object thereof or the aggregate of amounts charged under section 5 C With effect from 8 July 1983 section 6 C was inserted in the Act by Andhra Pradesh Act No 11 of 1984 and it provides Notwithstanding anything in sections 5 and 6 A where goods packed in any materials are sold or purchased the materials in which the goods are so packed shall be deemed to have been sold or purchased along with the goods and the tax shall be leviable on such sale or purchase of the materials at the rate of tax if any as applicable to the sale or as the case may be purchase of goods themselves  The net turnover of a dealer assessable to tax is deter mined under rule 6 of the Andhra Pradesh General Sales Tax Rules after deducting the amount specified in clauses a to 1 of that rule from the total turnover
Of these clauses clause g speaks of Amounts relating to charges for services rendered in connection with the packing of goods when specified and charged for by the dealer separately without including them in the price of goods sold  The appellants filed the writ petitions out of which the present appeals arise in the High Court at Hyderabad challenging the assessments to sales tax made on the turn over of packing material employed either by way of bottles for containing beer or by way of gunny bags for packing cement
The appellants challenged the application of such rate in assessments made in relation to the period before 8 July 1983
The appellants also challenged the application of that rate proposed pursuant to section 6C in show cause no tices issued by the concerned authority
While dismissing the writ petitions the High Court has proceeded on the basis that having regard to the nature of the goods and to the trade practice in respect of beer and cement the con tainers were necessary concomitants in the transactions and the transfer of 310 property in the containers was incidental or unavoidable that the sale transactions had to be regarded as composite and integrated sales of the containers and their contents and what was really sold was the bottled beer or the cement packed in gunny bags
The learned Judges observed further that even where money was paid to the dealer as security deposit refundable on the return of the bottles the sale of the bottle could not be treated as an independent transac tion different and distinct from the transaction of sale of the beer
So also was the case in the sale of cement con tained in gunnies
The learned Judges expressed the view that the consideration paid by the purchaser to the dealer consists not only of the price of the contents namely beer or cement but also includes the price of the containers that is the bottles and the cartons in the case of beer and gunnies in the case of cement
It is commonly accepted that a transaction of sale may consist of a sale of the product and a separate sale of the container housing the product with respective sale consider ations for the product and the container separately or it may consist of a sale of the product and a sale of the container but both sales being conceived of as integrated components of a single sale transaction so
 what may yet be a third case it may consist of a sale of the product with the transfer of the container without any sale consid eration therefore
The question in every case will be a question of fact as to what are 
the nature and ingredients of the sale
It is not right in law to pick on one ingredi ent only to the exclusion of the others and deduce from it the character of the transaction
For example the circum stance that the price of the product and the price of the container are shown separately may be evidence that two separate transactions are envisaged but that circumstance alone cannot be conclusive of the true character of the transaction
It is not unknown that traders may for the advantage of their trade show what is essentially a single sale transaction of product and container or a transaction of a sale of the product only with no consideration for the transfer of the container as divisible into two separate transactions one of sale of the product and the other a sale of the container with a distinct price shown against each
Similarly where a deposit is made by the purchaser with the dealer the deposit may be pursuant to a transac tion where there is no sale of the container and its return is contemplated and in the event of its not being returned the security is liable to forfeiture
Alternatively it may be a case where the Container is sold and the deposit repre sents the consideration for the sale and in the event of the container being returned to the dealer the deposit is returned by way of consideration for the re sale
In every case the assessing authority is obliged to ascertain the 311 true nature and character of the transaction upon a consid eration of all the facts and circumstances pertaining to the transaction
That the problem almost always requires factual investigation into the nature and ingredients of the trans action has been repeatedly emphasised by this Court
In Hyderabad Deccan Cigarette Factory vs The State of Andhra Pradesh 1966 17 STC 624 this Court said It is not possible to state as a proposition of law that whenever particular goods were sold in a container the parties did not intend to sell and buy the container also
Many cases may be visualized where the container is comparatively of high value and sometimes even higher than that contained in it
Scent or whisky may be sold in costly containers
Even cigarettes may be sold in silver or gold caskets
It may be that in such cases the agreement to pay an extra price for the con tainer may be more readily implied
In the present case if we may say so with respect all the authorities including the High Court dealt with the question as a question of law without considering the relevant factors which would sustain or negative any such agreement  
A perusal of the orders of the various author ities and the High Court shows that a simple question of fact has been sidetracked by copious citations
Whether there was an agree ment to sell the packing materials is a pure question of fact and that question cannot be decided on fictions or surmises
That is what has happened in this case
The Commercial Tax Officer invoked a fiction the Assistant Com missioner of Commercial Taxes relied upon the doctrine of finished product the Appellate Tribunal relied upon surmises and the High Court on the principle of implied agreement
But none has tackled the real question
The burden lies upon the Commercial Tax Officer to prove that a turnover is liable to tax
No doubt he can ask the assessee to produce the relevant material and if he does not produce the same he may draw an adverse inference against him
But he must decide the crucial question whether the packing materials were subject of the agreement of sale express or implied
To ascertain the said fact he can rely upon oral statements accounts and other documents personal enquiry and other relevant circumstances such as the nature and the purpose of the packing materials used
 312 Again in Commissioner of Taxes Assam vs Prabhat Marketing Co Ltd 1967 19 STC 84 this Court accepted as well founded submission that the parties may have intended in the circumstances to sell hydrogenated oil apart from the con tainers and the mere fact that the price of the containers was not separately fixed would make no difference in the assessment of sales tax and went on to observe It is well established that in order to constitute a sale it is necessary that there should be an agreement between the parties for the purpose of transferring title to goodS the agreement must be supported by money consideration and that as a result of the transaction the property should actually pass in the goods
Unless all the ingredients are present in the transaction there could be no sale of goods and sales tax cannot be imposed State of Madras vs Gannon Dunkerley and Co Madras Ltd            
The question as to whether there is an agree ment to sell packing material is a pure ques tion of fact depending upon the circumstances found in each case
 There can be as many different kinds of transactions as the circumstances of the case may require either by reason of prevailing trade practice or market conditions or person al convenience and as human ingenuity may devise for bona fide reducing the burden of tax
In The State of Karnataka vs Shaw Wallace and Company Ltd 1981 48 STC 169 the High Court of Karnataka pointed out that there was an agreement to sell the bottles and crates in which the liquor was conveyed and there was also an agreement in regard to the price of those containers and therefore the turnover in regard to those items had to be determined and the appropri ate rate of sales tax had to be charged as provided in the Karnataka Sales Tax Act
Reference was made to the require ment in the Karnataka Excise Act 1966 that the liquor had to be sold in sealed containers but that the High Court said did not automatically lead to the conclusion that the same rate of sales tax was applicable to containers also
It was observed that such a presumption could not be made specially when separate rates were specified in the Sales Tax Act in regard to the containers and the contents
In Arlem Breweries Ltd vs The Assistant Commissioner of Sales Tax Panaji 1983 53 STC 172 the Panaji Bench of the High Court of Bombay noted that item 22 of the First Schedule to the Goa Daman and Diu Sales Tax Act 1964 which spoke of the item foreign liquor and 313 India made foreign liquor indicated that the tax was levied only on the liquor and not against the bottle and liquor or bottled liquor
The sale was of beer and the bottles were treated separately
It was also pointed out that the agree ment by the assessee with the wholesaler did not create any obligation on the purchasers to return the bottles nor did it fix any time for their return
The payment of an amount for the bottles in advance as a term of the sale was re ferred to as cost of the bottles and this the High Court said constituted the sale price of the bottles although described as a deposit
In Ms Jamana Flour  Oil Mill P Ltd vs State of Bihar  this Court affirmed the finding that there was an implied agreement of the sale of gunny bags
It said Admittedly gunny bags are a different commod ity and sale thereof is assessable to tax at 4 12 
It is not disputed that the 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 included in the price to be charged by the dealer
Under the Explana tion 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
 It is therefore perfectly plain that the issue as to whether the packing material has been sold or merely trans ferred without consideration depends on the contract between the parties
The fact that the packing is of insignificant value in relation to the value of the contents may imply that there was no intention to sell the packing but where any packing material is of significant value it may imply an intention to sell the packing material
In a case where the packing material is an independent commodity and the packing material as well as the contents are sold independently the packing material is liable to tax on its own footing
Wheth er a transaction for sale of packing material is an inde pendent transaction will depend upon several factors some of them being 1
The packing material is a commodity having its own identity and is separately classified in the Schedule 2
There is no change chemical or physical in the packing either at the time of packing or at the time of using the content 314 3
The packing is capable of being reused after the con tents have been consumed 4
The packing is used for convenience of transport and the quantity of the goods as such is not dependent on pack ing 5
The mere fact that the consideration for the 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 one case Punjab Distilling Industries Ltd vs The Com missioner of Income Tax Simla 1959 Supp 1 SCR 683 where the bottles were sold by the assessee under a buy back scheme the security deposit for the return of the bottles was held to be merely in the nature of an incentive to the buyer to return the bottles
Turning to section 6C of the Act it seems to envisage a case where it is the goods which are sold and there is no actual sale of the packing material
The section provides by legal fiction that the packing material shall be deemed to have been sold along with the goods
In other words although there is no sale of the packing material it will be deemed that there is such a sale
In that event the section de clares the tax will be leviable on such deemed sale of the packing material at the rate of tax applicable to the sale of the goods themselves
It is difficult to comprehend the need for such a provision
It can at best be regarded as a provision by way of clarification of an existing legal situation
If the transaction is one of sale of the goods only clearly all that can be taxed in fact is the sale of the goods and the rate to be applied must be read in the case of such goods
It may be that the price of the goods is determined upon a consideration of several components including the value of the packing material but nonetheless the price is the price of the goods
It is not open to anyone to say that the value of the different components which have entered into a determination of the price of the goods should be analysed and separated in order that dif ferent rates of tax should be applied according to the character of the component for example packing material
What section 6C intends to lay down is that even upon such analy sis the rate of tax to be applied to the component will be the rate applied to the goods themselves
And that is for the simple reason that it is the price of the goods alone which constitutes the transaction between the dealer and the purchaser
No matter what may be the component which enters into such price the parties understand between them that the purchaser is paying the price of the goods
Section 6C merely clarifies and explains that 315 the components which have entered into determining the price of the goods cannot be treated separately from the goods themselves and that no account was in fact taken of the packing material when the transaction 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 conten tion of the appellants that a rate applicable to the packing material in the Schedule should be applied to the sale of such packing material in a case under section 6C when in fact there was no such sale of packing material and it is only by legal fiction and for a limited purpose that such sale can be contemplated
In the circumstances no question arises of section 6C being constitutionally discriminatory and therefore invalid
In the appeals before us we find that the High Court has proceeded on the assumption that the transactions are covered by trade practice and having regard to the nature of the goods it has inferred that what is charged is the price of the bottled beer or of cement packed in gunny bags and reference has also been made to the Excise Law and the Cement Control Order requiring that the liquor or the ce ment as the case may be must be sold in bottles or in gunny bags respectively
We are constrained to observe that no attempt has been made by the tax authorities to ascertain the facts of each case and to determine what were the actual ingredients of the contract and the intention of the par ties
Assumptions have been made when what was required was a detailed investigation into the facts
We have indicated earlier the several possibilities which are open in cases of this kind and how the ultimate conclusion can be vitally affected by the tests to be applied
Because of the lack of adequate and clear factual material the High Court also was compelled to proceed on the basis of generalised statements and broad assumptions
We are unable in the circumstances to hold that the cases can be regarded as disposed of final ly
It is regrettable but the cases must go back for proper findings on facts to be ascertained on fuller investigation
In the circumstances the appeals are allowed the impugned judgment and order of the High Court in the several cases are set aside and the cases are remanded to the High Court for further consideration and disposal in the light of the observations made by us
In the case of the writ peti tions before us the assessing authority will allow the dealer to show cause and thereafter upon evidence led before it determine the matter
There is no order as to costs
RSS Appeals allowed


Summary:
Lions Club
Pottery Town Khurja UP actuated by the desire to provide relief and facilities of opthalmic surgi cal services particularly to the persons residing in rural areas suffering from eye troubles arranged and opened an Eye Camp at Khurja after obtaining necessary permission from the Chief Medical Officer Buland Sahar
In this con nection the Club invited Dr RM Sahay of the Sahay Hospi tal at Jaipur and team of Doctors to do the surgical job
The Club published propaganda literature with attractive slogans eg Get operated and go home  No restriction on food  No bed rest  and No stitches to be removed 
In response thereto substantial number of patients visited the Camp
Dr Sahay arrived in Khurja on 2141986 and examined about 122 patients
One hundred and eight patients were operated upon 88 of them for cataracts
Dr Sahay left Khurja that evening for Moradabad where he was schedule to conduct another similar Eye Camp
It is unfortunate that the project which was opened for the good of the suffering people proved a disastrous medi cal mis adventure as the operated eyes of the patients were irreversibly damaged owing to a post operative infection of the intra Ocular Cavities of the operated eyes
and the eyes were completely damaged
Similar mishap happened at Morada bad also though on a lesser scale the number of affected persons being 15 only
To remove the infection that caused this damage
Doctors gave the necessary treatment but to no avail
242 In order to find out the causes of this mishap ie the source of infection
the Government appointed Inquiry Committee
reports whereof were placed before the Court for favour of perusal
Two social activists Shri AS Mittal and Shri Om Prakash Tapas have filed these Writ Petition in the form of a Public Interest Litigation
The Petitioners have made serious allegations about the very bona fides behind the sponsoring of iII fated eye camp  and have alleged monetary gains on the part of the sponsors but the Court did not find any material to substan tiate the said allegation
The petitioners prayed that i the victims of this medical mishap be given expert rehabili tatory treatment and appropriate compensation ii that the Government do conduct a thorough investigation as to the conditions which rendered a medical misadventure of such a scale possible and evolve proper guidelines which will prevent recurrence of such tragedies and
iii that appro priate legal action be instituted against Dr Sahay and his team and other Government officials concerned
Pursuant to the reports of the Inquiries conducted into the causes of mishap
penal action had been initiated against Dr Sahay  others
The Court considered the following aspects of these proceed ings a Whether the Guidelines prescribing norms and condi tions for the conduct of Eye Camps are sufflciently com prehensive to ensure the protection of the patients who are generally drawn from the poor and less affluent section of the society or whether any further guidelines are required to be evolved
b What relief monetary or otherwise should be afford ed to those who have suffered Disposing of the Writ Petition this Court HELD Modern techniques in opthalmic surgery render cataract a minor operation
A cataract affected eye when properly operated Is expected to become normal
The opera tion Is meant to remove an obstruction to vision and resto ration of normal eyesight This Implies that the eyes of patients selected for operation has the potential for resto ration of sight
In the Instant case they have become totally blind In the operated eyes 247H 248A B 243 A mistake by a medical practitioner which no reasonably competent and careful practitioner would have committed is a negligent one
250D One of the questions that might arise in the appropriate forum is whether the Doctors judged by the circumstances in which they were working made a mistake and if so whether such a mistake was negligent
250D E Law recognises the dangers which are inherent in surgi cal operation
Mistakes will occur on occasions despite the exercise of reasonable skill and care
250G Jackson and Powell on Professional Negligence 1982 Edn
The necessity of the highest standards of aseptic ster ile conditions at places where opthalmic surgery or any surgery is conducted cannot be over emphasised
It is not merely on the formulation
of the theoretical standards but really on the professional commitments with which the pre scriptions are implemented that the ultimate result rests
254B C The factual foundations requisite for establishing the proximate causal connection for the injury has yet to be established conclusively
On humanitarian consideration the victims should be afforded some monetary relief by the State Government
In addition to the sum of Rs5000 already paid by way of interim relief the State Government shall pay a further sum of Rs 12500 to each of the victims
The vic tims entitled to receive the additional payment shall be the same as those who had the benefit of the interim relief of Rs5000
255D F That the Revised Guidelines dated 921988 with the suggested modifications can be held to be satisfactory
254F The Court abstained from pronouncing on the question of culpable rashness or negligence on the part of the Doctors or others against whom separate action is either pending or contemplated
246G Dr Laxman Balakrishna Joshi vs Trimbak Bapu Godbols   Para 11 and Street on Torts 1983 7th Edn referred to