1967 (3) TMI 88 - HC - VAT and Sales Tax

Summary

Issues:
1. Whether amounts received by a printer for job-works are taxable under the Kerala General Sales Tax Act, 1963.

Analysis:
1. The petitioner, a printer and dealer in stationery articles, contested the taxability of amounts received for job-works and printing of court judgments under the Act. The respondent assessed job-works under Item 42 of the Act, taxable at 5%, but exempted printing of judgments. The petitioner argued that job-works do not constitute "sale" or "turnover" as per Act definitions.

2. The judgment distinguished two types of job-works: where the printer uses customer-supplied paper and where the printer provides the paper. It emphasized that the substance of the transaction determines tax liability, not the billing format. The Act's definition of "sale" and "turnover" was referenced to assert that job-works do not involve a taxable transfer of goods.

3. The court questioned the differentiation between printing court judgments and other job-works. It raised doubts on whether printed materials qualify as products of paper under Item 42. Referring to a Supreme Court ruling, it highlighted the need to interpret terms in their common sense. The judgment concluded that job-work amounts were not turnover and directed their exclusion from assessment.

4. Orders of assessment for 1963-64 and 1964-65 were set aside for reassessment after excluding job-work amounts. The provisional assessment for 1965-66, including job-work amounts, was annulled as the assessment year had lapsed. The judgment instructed the respondent to conduct a final assessment for 1965-66 in line with the court's decision.

5. Ultimately, the court allowed the original petitions, with each party bearing its costs. The judgment clarified the non-taxability of job-work amounts and provided directions for reassessment and final assessment in line with its findings.

This detailed analysis of the judgment addresses the key issues raised regarding the taxability of amounts received by a printer for job-works under the Kerala General Sales Tax Act, 1963.