JUDGMENT This is a sales tax reference under section 44(1) of the M.P. General Sales Tax Act, 1958 (hereinafter referred to as "the Act"), at the instance of the applicant/assessee - M/s. Ganga Enterprises, Katni and the following question of law has been referred by the Board of Revenue for answer of this Court, which reads as under : "Whether deduction under section 2(r)(ii) of the M.P. General Sales Tax Act, 1958, is not allowable to an assessee on packing material purchased after paying full tax when sold along with other goods in view of Explanation to section 2(o) of the M.P. General Sales Tax Act, 1958 ?" 2. The applicant/assessee deals in agarbattis at Katni. The assessee was assessed to sales tax under the Act for the period from April 28, 1980 to March 31, 1981, by the Assistant Sales Tax Officer, Katni, vide his order dated August 28, 1982 (annexure B). The assessee claimed exemption on account of purchases of packing material from registered dealers worth Rs. 57,302. His contention was that this packing material was that this packing material was used for the packing of agarbattis for sale and he is entitled to a deduction under section 2(r)(ii) of the Act. But this contention was not accepted by assessing authority in view of the Explanation below section 2(o) of the Act, which was inserted with effect from September 1, 1976. 3. Aggrieved against the order dated August 28, 1982 (annexure B), the assessee/applicant preferred fist appeal before the Appellate Deputy Commissioner of Sales Tax, Jabalpur and there also, he failed and ultimately he preferred second appeal before the Board of Revenue. The Board of Revenue by order dated November 23, 1983 (annexure D), dismissed the appeal of the assessee. Hence, the assessee moved an application dated February 10, 1984 (annexure A) before the Board of Revenue for referring the matter to this Court and the Board of Revenue referred the aforesaid question to this Court for answer. 4. We have heard the learned counsel for the Revenue as none has appeared on behalf of the assessee/applicant. 5. Hence, the assessee moved an application dated February 10, 1984 (annexure A) before the Board of Revenue for referring the matter to this Court and the Board of Revenue referred the aforesaid question to this Court for answer. 4. We have heard the learned counsel for the Revenue as none has appeared on behalf of the assessee/applicant. 5. Shri S. K. Seth, learned counsel for the Revenue, has submitted tat in view of Explanation to section 2(o) of the Act, the assessee/applicant is not entitled to any deduction under section 2(r)(ii) of the Act as per the Explanation, when the packing material is used for finished goods and same is sold and the incumbent charges the price for agarbattis; therefore, it is a sale price and it is a part of its turnover and as such, he is not entitled to any benefit under section 2(r)(ii) of the Act. 6. We had able assistance of Shri B. L. Nema, learned counsel and he has invited our attention to two decisions of this Court in K. P. Sons v. Sales Tax Officer [1987] 67 STC 38 and Kukreja Udyog v. Commissioner of Sales Tax [1987] 67 STC 43 [App.]. 7. Shri S. K. Seth, learned counsel for the Revenue, has invited our attention to a decision of the honourable Supreme Court given in Raj Sheel v. State of Andhra Pradesh [1989] 74 STC 379; AIR 1989 SC 1696 , where a validity of similar provision was challenged and the validity was upheld and we will refer the aforesaid decisions at the appropriate place. 8. Before we proceed, it will be necessary to refer to the provision which was in existence at the relevant time. Section 2(o) of the Act reads as under : "Section 2(o) : 'Sale price' means the amount payable to a dealer as valuable consideration for the sale of any goods less any sum allowed as cash discount according to ordinary trade practice but inclusive of any sum charged for anything done by the dealer in respect of the goods at the time of or before delivery thereof other than the cost of freight or delivery or the cost of installation when such cost is separately charged. Explanation I. - Where goods are sold together with packing material or container, then notwithstanding anything contained in this Act the sale price of such goods shall be inclusive of the price or the cost or value of such packing material or container, whether such price or cost or value is charged separately or not, as if such packing material or container were the parts of the goods sold; Explanation II. - Where goods are sold on hire purchase or any system of payment by instalments, the sale price of such goods shall be exclusive of insurance charges, interest and hire charges and such other charges as may be prescribed." Section 2(r)(ii) or the Act reads as under : "Section 2(r) : 'taxable turnover' in relation to any period means that part of a dealer's turnover for such period which remains after deducting therefrom - (i) ........ (ii) the sale price of goods mentioned in Parts II to VI of Schedule II, which are in the nature of tax-paid goods in the hand of such dealer;" Section 4 of the Act deals with the "incidence of taxation" and which says that the dealer is liable to pay tax under this Act on his taxable in respect of sales or supplies of goods effected in Madhya Pradesh during a period of twelve months immediately preceding the commencement of this Act exceeding the limit specified in sub-section (5). Therefore, the incidence of tax is on taxable turnover and the taxable turnover is defined in section 2(r) of the Act as reproduced above. 9. Now, in this scheme of the relevant provisions, we have to examine that whether the assessee is entitled to the deduction on the packing material used by him for selling end-product, i.e., agarbattis, in the packing material. Section 2(r)(ii) of the Act lays down that the sale price of goods mentioned in Parts II to VI of Schedule II which are in the nature of tax-paid goods in the hands of such dealer; then the dealer shall be entitled to the deduction of a tax, if he has used the goods for further sale. Section 2(r)(ii) of the Act lays down that the sale price of goods mentioned in Parts II to VI of Schedule II which are in the nature of tax-paid goods in the hands of such dealer; then the dealer shall be entitled to the deduction of a tax, if he has used the goods for further sale. We are here concerned with the packing material only which is covered under item No. 15 of Part IV of Schedule II, which contains a list of 13 materials, which reads as under : SCHEDULE II PART IV Item 15 : Goods for use as containers and packing material, that is to say - (i) Gunny bags and hessian; (ii) Jute twine; (iii) Cardboard boxes and cartons; (iv) Empty tins and empty barrels; (v) Wooden boxes (khokas) and tin boxes; (vi) Empty bottles and corks; (vii) Polythene packing materials; (viii) Paper labels; (ix) Tin seals; (x) Paper bags; (xi) Wooden frames and reels; (xii) Paper cones; (xiii) Such other goods as may be contified as containers or packing material." 10. All the authorities below have not given any deduction on the tax paid by the assessee on the packing material which he has used for sale of agarbattis and they have taken a resort to the Explanation I under section 2(o) of the Act, i.e., under "sale price". Explanation I of section 2(o) of the Act lays down that where goods are sold together with packing material or container, then notwithstanding anything contained in this Act, the sale price of such goods shall be inclusive of the price or the cost or value of such packing material or container whether such price or cost or value is charged separately or not, as if such packing material or container were the parts of the goods sold. The effect of this Explanation is that when the finished goods are sold along with the packing material, then the finished goods shall include the cost of the packing material also. It is also said that when the packing material or a container is sold together with the goods contained therein then the price shall be worked out by including the cost of the packing material also. It is also said that when the packing material or a container is sold together with the goods contained therein then the price shall be worked out by including the cost of the packing material also. This provision has been specifically provided for the welfare of the dealers as well as for the consumers, as is apparent from the "Statement of Objects and Reasons" which reads as under : "STATEMENT OF OBJECTS AND REASONS The Madhya Pradesh General Sales Tax (Amendment) Ordinance, 1976, was promulgated consequent upon the abolition of octroi with a view to raising the resources to compensate the local bodies for the loss of their revenues. The turnover tax which was being levied under a separate enactment was made leviable under the Madhya Pradesh General Sales Tax Act, 1958 (No. 2 of 1959), at a higher rate. It is now proposed to replace the said Ordinance with the following modifications with a view to afford certain relief to dealers as well as consumers, - 2. Opportunity has also been taken to introduce a few urgent amendments in some other sections of the principal Act - (a) reduction of rate of tax on packing material from 8 per cent. to 4 per cent., when sold separately and equal to the contents when sold along with it. ............." It is clearly mentioned in the "Statement of Objects and Reasons" that these amendments are being made for the benefit of dealers as well as consumers. In fact, there was no need for providing the said Explanation under the "sale price". But, it appears that the Legislature in their wisdom thought it proper in order to make a definition of the "sale price" more specific and put it beyond any confusion; the said Explanation was added to the definition of "sale price". When the container is also sold together with the material contained therein then sale price is to be worked out as total sale price inclusive of the price of the packing material. Therefore, an Explanation was inserted for abundant caution and it cannot be stretched beyond the context where it has been used. The whole idea behind insertion of this Explanation was to make this definition elf-contained. Shri Seth, learned counsel, has emphasised on th non obstante clause "notwithstanding" contained therein. Therefore, an Explanation was inserted for abundant caution and it cannot be stretched beyond the context where it has been used. The whole idea behind insertion of this Explanation was to make this definition elf-contained. Shri Seth, learned counsel, has emphasised on th non obstante clause "notwithstanding" contained therein. This clause means that if there is any provision in the Act, which is contrary to the definition of the "sale price", then by virtue of this non obstante clause, it will automatically give away to this Explanation I. Therefore, non obstante clause "notwithstanding" appearing in Explanation I does not mean that it ousted the applicability of the relief which is given in the definition of the "taxable turnover" as defined under section 2(r)(ii). As a matter of fact, in the definition "taxable turnover", certain reliefs have been given that how the total taxable turnover shall be worked out and for that, it is clearly mentioned in clause (ii) that the tax-paid goods which is being used, or becomes a part of another finished goods, which is sold in the market, then that amount of tax will be deducted in order to work out the taxable turnover. This deduction cannot be affected by the Explanation attached to section 2(o) of the Act. The sale price as mentioned above, has to contain the cost price, cost of the packing material including tax already paid. That was only with a view to make definition of the sale price self-contained. But that self-contained definition of "sale price" does not adversely affect the deduction, which has been made available to the assessee under section 2(r)(ii) of the Act. It will not be proper to confuse the said two provisions as both the provisions operate in separate areas of operation and one cannot be mixed up with the other. The effect of determination of "sale price" is one act and deduction from taxable turnover is another thing and to deny the benefit of deduction by virtue of Explanation I to section 2(o) of the Act to the assessee, is against the intended intention of the Legislature. If the Legislature wanted to deny this deduction under clause (ii) of section 2(r) of the Act, they would have made a necessary amendment in taxable turnover also. But the Legislature did not extend that effect into this definition and confined it to the definition of the "sale price" only. If the Legislature wanted to deny this deduction under clause (ii) of section 2(r) of the Act, they would have made a necessary amendment in taxable turnover also. But the Legislature did not extend that effect into this definition and confined it to the definition of the "sale price" only. 11. Shri S. K. Seth, learned counsel for the Revenue, submitted that the effect of non obstante clause has to be kept in view. It is true, but that non obstante clause has only to be extended wherever any different provision has been made under the Act for working out the definition of "sale price" and which runs counter to the Explanation I, then it will have the overriding effect. But in clause (ii) of section 2(r) of the Act, there is no effect of this Explanation on "sale price" because there only deduction has to be given from the sale price of the goods which has been used as one of the components of finished goods. Therefore, the deduction is one part and determination of sale price is an another part and two cannot be confused together so as to deny the specific intended purpose with which the Legislature has conferred the benefit of the deduction to the assessee in the definition of the "taxable turnover". 12. It is a trite position that the taxing statute has to be construed strictly and by giving a strict interpretation to the provisions, it would follow that the Explanation I has to be strictly construed in the context where it appears and it cannot be imported or it cannot be read in other provision where it is not warranted. The view we have taken finds support in three successive decisions of this Court given in the case of Kukreja Udyog v. Commissioner of Sales Tax [1987] 67 STC 43 [App.], K. P. Sons v. Sales Tax Officer [1987] 67 STC 38 and Himalaya Chatni Bhandar v. Commissioner of Sales Tax [1989] 73 STC 84. In the case of Kukreja Udyog [1987] 67 STC 43 (MP) [App.], their Lordship had an occasion to consider the Explanation I to section 2(o) of the Act with the definition of the "taxable turnover" specially with reference to clause (ii) of section 2(r) and their Lordships observed : "...... In the case of Kukreja Udyog [1987] 67 STC 43 (MP) [App.], their Lordship had an occasion to consider the Explanation I to section 2(o) of the Act with the definition of the "taxable turnover" specially with reference to clause (ii) of section 2(r) and their Lordships observed : "...... The expression in the explanation 'where goods are sold' means the sale of the main goods, then for the purpose of determining the sale price of those goods, the explanation clarifies that if those sold goods are delivered duly packed, the cost of the packing material will also form part of the sale price. The word 'together' in the explanation in the context means that when the goods are sold duly packed, the cost of the packing material will also be included in the sale price of the goods. The purpose of adding this explanation is abvious." The same view was subsequently expressed by the Division Bench of this Court in the case of K. P. Sons [1987] 67 STC 38. There also, while dealing with the Explanations to section 2(o) read with section 2(r)(ii) of the Act, their Lordships have held that both provisions should be harmonised in such a way that it should not be construed widely and it was observed that : "........ The definition of 'sale price' as given under section 2(o) of the Act is only for the purpose of determining the tax and hence, it is to be given effect to while interpreting that provision in the context of other relevant definition provided under section 2, i.e., section 2(rr), 2(r), 2(t) and 2(o) of the Act, and therefore, the Explanation appended to section 2(o) normally be so read as to harmonise and clear up any ambiguity in the main section and should not be so construed as to widen the ambit of the original provisions." Similarly view was also expressed by the another Division Bench of this Court in the case of Himalaya Chatni Bhandar [1989] 73 STC 84 and there also, their Lordships have considered the effect of section 2(o) read with section 2(r)(ii) of the Act and it was held that : "....... in view of the Explanation to section 2(o) of the Madhya Pradesh General Sales Tax Act, 1958, read with section 2(r)(ii), the dealer was entitled to the deduction from its taxable turnover of the value of the tax-paid packing material." Therefore, inspite of the Explanation I, the consistent view of this Court has been that the deduction, which the assessee is entitled under section 2(r)(ii), is still admissible to him and the Explanation I does not deprive that deduction to the assessee. 13. Shri S. K. Seth, learned counsel for the Revenue, has also invited our attention to the decision of the honourable Supreme Court given in the case of Raj Sheel v. State of Andhra Pradesh [1989] 74 STC 379; AIR 1989 SC 1696 and in that case, section 6-C of the Andhra Pradesh General Sales Tax Act came up for consideration and section 6-C was almost in pari materia with the Explanation I of section 2(o) and there, the validity of this section was challenged and the same was upheld by their Lordships. It was held that "section 6-C merely clarifies and explains that 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." Therefore, it was mere for examining the validity of section 6-C and any observation in that decision does not in any way militate against the view which has been taken by this Court and by us presently. Therefore, we are of the opinion that the view taken by the authorities below was not correct and we hold that the assessee is entitled to the benefit of deduction on the packing material used by him for packing the agarbattis, under section 2(r)(ii) of the Act. Hence, the question is answered in favour of the assessee/applicant and against the Revenue/non-applicant. Reference answered in the negative.