1971 (6) TMI 54 - HC - VAT and Sales Tax

Summary

Issues:
1. Determination of whether the work undertaken by the assessee is a works contract or a sale of goods.

Analysis:
The judgment delivered by the High Court of Andhra Pradesh involved two revisions filed by the assessee against the Sales Tax Appellate Tribunal's order confirming the Deputy Commissioner's decision. The dispute revolved around whether the transactions carried out by the printing press constituted a works contract or a sale of goods. The petitioner, a printing press named M/s. S.R.P. Works and Ruby Press, supplied cinema tickets to customers based on orders specifying paper type and quantity. The assessing authority assessed the value of paper only, granting exemption for printing charges as labor costs. However, the Deputy Commissioner revised the order, considering the transactions as sales of finished goods. The Tribunal upheld this assessment, leading to the petitioner's appeal. The petitioner argued that the transactions were works contracts or, alternatively, consisted of two distinct contracts for paper supply and printing charges. The Court analyzed the orders placed by customers, which clearly indicated the intention for the supply of finished products, not just paper. Despite break-up figures in bills, the Court emphasized that the main question was whether there were separate contracts for paper supply and printing or a single contract for finished goods.

The Court further examined the nature of the contract to determine if it qualified as a works contract. Referring to the definition of "works contract" under the Act, the Court highlighted that such contracts involve construction, improvement, or repair of immovable or movable property. In this case, the printing of cinema tickets did not fall under the scope of "fitting out, improving, or repairing" movable property. Citing a similar case precedent, the Court concluded that transactions resulting in the transfer of property in finished goods, like cinema tickets, did not constitute a works contract. Instead, they were deemed as sales under the Andhra Pradesh General Sales Tax Act. The Court dismissed the revisions, upholding the Tribunal's findings and ordering costs to be paid by the petitioner.

In conclusion, the High Court of Andhra Pradesh determined that the transactions carried out by the printing press, involving the supply of cinema tickets, were not works contracts but sales of goods. The Court emphasized the intention of the parties, as evidenced by the orders, and clarified that the property in the goods passed to the buyer upon delivery of the finished products. The judgment underscored the distinction between works contracts and sales, ultimately affirming the Tribunal's decision and dismissing the revisions filed by the assessee.