9911796707
TMI Blog2008 (12) TMI 706X X X X Extracts X X X X X X X X Extracts X X X X ..... ad "labour charges and other like charges" but the same was not acceptable to the assessing authority and accordingly exemption was denied and the taxable turnover was computed. Challenging the assessment order dated March 27, 1997, the assessee filed a statutory appeal before the Appellate Assistant Commissioner. Before the Appellate Assistant Commissioner, the assessee contended that though chemicals were used for conversion of raw skins into tanned leather, the chemicals have no independent existence and the same were completely washed away in the process and as such it was only a "catalyst". However the Appellate Assistant Commissioner negatived the said contention on the ground that raw skins which are perishable have been converted into dressed leather by using chemicals and in that process, the materials used have improved the product and enhanced the value and as such there has been accretion of property in the finished goods and accordingly rejected the case of the assessee. Aggrieved by the said order, the assessee preferred an appeal before the Tamil Nadu Sales Tax Appellate Tribunal. The Tribunal endorsed the view of the Appellate Assistant Commissioner that there was ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... is presupposes the existence of goods, because there can be no transfer of property in goods unless the goods themselves exist. In the instant case, it is not disputed that the chemicals are used for the purpose of eradicating pests. The chemicals are sprayed through machines so that when the process ends, nothing tangible remains in which property is transferred. By the process of spraying or applying chemicals, a place is treated against insects and pests but in the process the chemicals are themselves consumed and there remains nothing in which property is transferred. I am of the view that a transaction as the one in question really does not involve transfer of any goods as understood in sub-clause (b) of clause (29A) of article 366 of the Constitution of India or under the provisions of the Bihar Finance Act, 1981. It is a service contract pure and simple and does not involve any sale of goods since there are no goods in which property can be transferred. . ." In Commissioner of Sales Tax v. R.M.D.C. Press Pvt. Ltd. [1999] 112 STC 307 a Division Bench of the Bombay High Court considered the issue as to whether in the execution of job-work of printing, there was transfer of p ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ge 167 of STC): "11. It is contended by the petitioners that none of the three categories of the photographic work undertaken by them, would come within the term 'works contract' as defined in the Act as it does not involve construction, fitting out, improvement, repair, manufacture, processing, fabrication, erection, installation, modification or commissioning of any movable or immovable property. The contract between them and the customer is only that of skill and labour in the nature of a service contract. Passing of property in the photographic paper while handing over the positive prints is only incidental to the contract of service and that the concept of the deemed sale has no application in the nature of the transaction. A customer approaching a photographer to take photos and get the photo prints, has no intention of buying a photograph. Apart from the above, it is contended that the general test in relation to a works contract is also not satisfied in the instant case. Peculiar character of a works contract is that such a contract is for execution of certain works in relation to pre-existing immovable or movable property. The question of works contract would not ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ng, computerised art work and taking out duplicate copies of photocopying and the stand of the assessee with regard to the use of paper and ink being incidental or accessory to the execution of the works contract, was rejected by holding that the value of goods transferred was of no relevance and once there was transfer of property, it shall be deemed as a sales transaction within the execution of the works contract. The issue to be decided in the present case is as to whether there was transfer of property involved in the process. In the event of transfer of property takes place in any form on account of usage of consumable goods, no exemption could be claimed in respect of such cost of consumable goods. A thing can have a form of its own, when it exists. Proof of such existence of a thing is a form in which it manifests itself. Therefore "the form" assumes significance. If it is demonstrated that there was accretion on account of the process involving particular goods, it amounts to "sale". There is no requirement that such accretion has to be in the form of a particular material. It could be in the form of colour transformation or any other form and in case it retains the iden ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
