TMI Blog1975 (9) TMI 161X X X X Extracts X X X X X X X X Extracts X X X X ..... ssioner subject to certain modifications. On further appeal, the Tribunal confirmed the order of the Appellate Assistant Commissioner. 4.. The assessee had contended before the authorities that he was not a dealer. He only executed works contract, for the purpose of which he used his own paper. He charged his clients for the cost of the paper as well as for the remuneration for work and service. He had produced his order books and bill books before the assessing authority as well as the Appellate Assistant Commissioner. According to him, these documents fully supported his contentions. The assessee maintained that the sale of paper used for printing could not be taxed under the Sales Tax Act as he was not the first seller of paper in the State. The remuneration received by him from the clients for the work and labour could not also be taxed under the Act. 5.. The Tribunal, by its order dated 17th July, 1973, rejected the contentions of the assessee and held as follows: "......paper, when printed, becomes printed material, which is different from paper and paper product within the meaning of item 42 of Schedule 1 of the Act. So it becomes a finished product and when the appell ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s; where it is of the second category, it is a contract for execution of work not involving sale of goods." 8.. In the instant case, the authorities have, on the basis of the materials produced before them, come to the conclusion that the orders placed by the customers were for the sale of printed materials in the form of bill books, vouchers, receipt books, letter heads, question papers and notices. The assessee's clients had not indented to buy and he had not intended to sell mere paper. What he had intended to sell and what he had in fact sold were printed materials. In the above cited case', at page 256, the Supreme Court extracts the following passage from its judgment in Gannon Dunkerley's case 2: "......to constitute a transaction of sale there should be an agreement, express or implied, relating to goods to be completed by passing of title in those goods. It is of the essence of this concept that both the agreement and the sale should relate to the same subject-matter ...... Under the law, therefore, there cannot be an agreement relating to one kind of property and a sale as regards another." 9.. If what the customers had contracted to buy was not mere paper, but docume ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... x Officer1966 K.L.T. 1139., as follows: "Applying the above principle it is clear that the contract in the cases of printing of letter heads, binding of books and supply of journal forms are contracts for sale. But it seems to me impossible to say that the contract for printing judgments of courts is a contract for sale. It appears to me that this is a contract for work and labour." This principle was restated by this court in Sales Tax Officer, Palghat v. I.V. Somasundaran[1974] 33 S.T.C. 68; 1973 K.L.T. 814, This court stated as follows: "The question must first be what essentially is the nature of the contract. For instance, if there is an agreement for printing judgments, essentially the contract is one for work and labour and if the contract is essentially for work and labour, there is no justification for bifurcating that contract and creating two different contracts which we think will be non-existent, one for cost of labour and the other for sale of paper. There are many activities which cannot be indulged in without material. It may be canvas in the matter of a painter and the paint that he uses, an example which will glaringly illustrate the mistake of applying the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the buyer buys is a finished product which is a work of art. On the other hand, when a person gets his manuscript printed as an article or a book of verses, the printer does no more than a mechanical or technical job. The printer does not create the article or the poem, but merely renders his services to print which is in the nature of a job-work. The manuscript as such is the result of the skill, industry and scholarship of the author. In such a case, there is no sale of the article or book by the printer; nor would it be possible in such a case to spell out an agreement for the sale of materials such as paper or ink, which may have been incidentally used in the production of the printed work. While the painter sells a finished product which is a work of art, quite distinct and different from the materials used in its production, the printer merely does a job-work involving no sale; one is the work of an artist who is endowed with the finer qualities of imagination and taste and the other that of an artisan who is trained as a mechanic or technician. A printer of judgments, for example, does not produce and sell them; his work is purely that of a technician. This court has theref ..... X X X X Extracts X X X X X X X X Extracts X X X X
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