GOVERNMENT OF ANDHRA PRADESH vs GUNTUR TOBACCOS LTD.

The Supreme Court held that under the Madras General Sales Tax Act, 1939, the packing of tobacco is an integral part of the redrying process, and thus, no separate sales tax is applicable on the packing material as there was no independent sale. The Court emphasized that for a transaction to be considered a sale, there must be a clear intention to sell the goods, which was absent in this case. The High Court's decision to set aside the tax order was upheld, confirming that the packing material did not constitute a separate sale.