ACC Limited Vs State of Bihar (Patna High Court)
Patna High Court held that packing materials namely gunny bags and HDPE bags are integral part of cement sales hence cannot be charged separately. Consolidated sales tax rate of 11% is applicable. Accordingly, appeals stand dismissed.
Facts- The appellant, M/s ACC Limited, is a company incorporated under the provisions of the Indian Companies Act, 1913, and is represented through its Chief Manager (Finance). The appellant company is engaged in the business of manufacture and sale of cement. Its three manufacturing units are located in the State of Bihar at Sindri, Chaibasa, and Khalari, and it has a network of warehouses situated throughout the State for the distribution and sale of cement received from its factories located within Bihar as well as from various factories located outside the State.
According to the appellant, the rate of tax on different goods is fixed u/s. 12 of the Bihar Finance Act, 1981. Sales tax at the rate of 4% on gunny bags (packing material), 7% on HDPE bags (packing material), and 11% on cement was payable during the period under consideration. The appellant duly paid the said tax on packing material and cement u/s. 12 of the Act. It is further submitted that, the appellant paid the taxes at the prescribed rates from time to time, no dues remained outstanding against the appellant. The assessing authority rejected the appellant’s contention with regard to the applicable rate of tax on packing materials, namely gunny bags and HDPE bags.
