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2015 (3) TMI 1161 - MADRAS HIGH COURT

2015 (3) TMI 1161 - MADRAS HIGH COURT - [2015] 82 VST 553 (Mad) - Liability of sales tax and imposition of penalty on supply of printed materials - Printed on the orders received from their customers and according to their specifications without ascertaining the predominant intention of the parties to the transaction - Works contract - Claimed exemption on sales effected on printed materials, printed out of his own materials such as paper, ink, etc. - Held that:- by following the decision of thi .....

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R. Karuppiah, JJ. ORDER This tax case (revision) filed by the Revenue as against the order of the Sales Tax Appellate Tribunal was admitted by this court on the following substantial questions of law:- "(1) Whether the Sales Tax Appellate Tribunal is right in holding that no sales tax is payable on the supply of printed materials which were printed by assessee on the orders received from their customers and according to their specifications without ascertaining the predominant intention of .....

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3, respectively claiming exemption on a turnover of ₹ 4,65,72,332 in the returns filed on the ground that they are doing only works contract. The assessing authority, while completing the assessment, rejected the exemption claimed on the sales effected on printed materials, which had been printed out of his own materials such as paper, ink, etc. Consequently, vide separate proceedings, the assessing authority levied penalty under section 12(3) of the Tamil Nadu General Sales Tax Act. 2. Ag .....

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the Tribunal, the Revenue has filed the present revision before the Tamil Nadu Taxation Special Tribunal. After the abolition of the Tribunal, the matter has been transferred to this court and renumbered. 5. Heard learned Additional Government Pleader appearing for the Revenue and perused the materials placed before this court. 6. The apex court, in similar circumstances, in the decision reported in [1989] 73 STC 1 (SC) (State of Tamil Nadu v. Anandam Viswanathan) while dealing with the case of .....

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passes to the other party, the contractor undertaking to do the work would not necessarily be deemed on that account to sell the materials. Therefore, in every case of this nature of transaction, the assessing officer has to point rat which part of the job-work related to sale. 7. For better clarity, the relevant portion of the decision of the apex court reads as follows (page 14 in 73 STC):- "The primary difference between a contract for work or service and a contract for sale is that in t .....

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54 STC 382 (Mad) and Commissioner of Sales Tax, Madhya Pradesh v. Ratna Fine Arts Printing Press [1984] 56 STC 77 (MP). In our opinion, in each case the nature of the contract and the transaction must be found out: and this is possible only when the intention of the parties is found out. The fact that in the execution of a contract for work some materials are used and the property in the goods so used, passes to the other party, the contractor undertaking to do the work will not necessarily be d .....

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