TMI Blog2002 (9) TMI 868X X X X Extracts X X X X X X X X Extracts X X X X ..... de the State of Meghalaya. The said certificate was issued to the appellant by the Superintendent of Taxes, Circle-6 on 19.1.1995 bearing registration No. KH/CST/7762 dated 27.1.1994. The firm of the petitioner has been registered as a processing unit-processing of film rolls and making colour prints for customers. 4. The Sales Tax authorities in Meghalaya seized 36 number of rolls of Agfa colour photo paper on 28.11.1994 at Byrnihat Check Gate. The said photo printing paper was being carried in a tourist taxi in six cardboard boxes. The said taxi was detained by the Superintendent of Taxes at the aforesaid barrier and the goods were seized. The Superintendent of Taxes at the barrier issued the following endorsement: The case may be considered provided that the permit of the vehicle along with the licence of the Driver is surrendered at this office as security. The composition money of ₹ 23,930 (Rupees twenty three thousand nine hundred thirty) only should be cleared within 5 (five) days from today, failing which the consignment may be auctioned by this office and the vehicle may be detained at this check gate in the future. Sd/- Superintendent of Taxes Taxation ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e, execution of works contract, adventure or concern.... The learned Single Judge was of the opinion that, in view of the aforesaid provision, defining business the case of the writ petitioner was covered against him by the Supreme Court's judgment in Builders Assiciation of India v. Union of India, (1989) 2 SCC 645. 6. Learned counsel for the appellant this appeal submitted, that it is not necessary not to go into any other judgment of the Apex Court inasmuch as the Apex Court itself in the judgment reported as Rainbow Colour Lab and Anr. v. State of M.P. and Ors., (2000) 2 SCC 385, has held that to the extent the paper is used in printing of positive prints by the photographers in their work, there was no transfer of property in the goods. After the decision of the Apex Court in State of Madras v. Gannon Dunkerley Co., AIR 1958 SC 560, 46th amendment of the Constitution was brought about. Clause 29A was added to Article 366 relevant extract of which is as follows :- (29A) 'tax on the ale or purchase of goods' includes - (a) a tax on the transfer, otherwise than in pursuance of a contract, of property in any goods for cash, deferred payment or other ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... service, it is possible that articles may have to be used by the person executing the work and property in such articles or materials may pass to the other party. That would not necessarily convert the contract into one of sale of those materials. In every case, the court would have to find out what was the primary obj ect of the transaction and the intention of the parties while entering into it. .' It further went to observe as under : Unless there is sale and purchase of goods, either in fact or deemed, and such sale is primarily intended and not incidental to the contract, the State cannot impose sales tax on a works contract simpliciter in the guise of the expanded definition found in Article 366(29A)(b) read with Section 2(n) of the MP General Sales Tax Act. The work done by the photographer is only in the nature of a service contract not involving any sale of goods, and, therefore, the stand taken by the respondent State cannot be sustained. In Everest Copiers v. State of Tamilnadu, (1996) 5 SCC 390 it was observed as under : Where the main object of the work undertaken by the person to when the price is paid is not the transfer of a chattel as a chattel, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Builders' case (supra) is concerned, the Apex Court observed as under: The reliance placed by the High Court on Builders' case is misplaced. Thought this Court in the said case held that by the 46th Amendment to the Constitution, the definition of the expression tax on the sale or purchase of goods stood enlarged, it also held that the 46th Amendment does no more than make it possible for the States to levy sales tax on the price of gods and materials used in the works contract as if there was a sale of such goods and materials. The Court also observed : (SCC pp. 674-75, para 40) 40. We are surprised at the attitude of the State which have put forward the plea that on the passing of the 46th Amendment the Constitution had conferred on the States a larger freedom than what they had before in regard to their power to levy sales tax under Entry 54 of the State List. The 46th Amendment does no more than making it possible for the States to levy sales tax on the price of goods and materials used in works contracts as if there was a sale of such goods and materials. We do not accept the argument that Sub-clause (b) of Article 366(29-A) should be read as being equivalen ..... X X X X Extracts X X X X X X X X Extracts X X X X
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