1998 (9) TMI 635 - HC - VAT and Sales Tax

Summary

Issues involved: Interpretation of provisions of Maharashtra Sales Tax on the Transfer of Property in Goods involved in the Execution of Works Contracts Act, 1989 regarding the transfer of property in ink used for printing job-work where paper is supplied by customers.

Summary:
The case involved M/s. R.M.D.C. Press Pvt. Ltd., a printing press engaged in job-works of printing on customer-supplied papers. The issue was whether there was a transfer of property in the ink used for printing, under the Maharashtra Sales Tax Act. The Assistant Sales Tax Commissioner and the Tribunal had differing opinions on this matter.

The Revenue contended that the ink used in printing job-work should be taxed under the Act, considering the transfer of ink to the customer. On the other hand, the assessee argued that no property transfer occurred in the ink used for printing, as it was merely a tool of the printer and got consumed in the process, not resulting in any transfer to the customer.

After careful consideration, the Court held that in the job-work of printing, there was no transfer of property in the ink used. Ink was deemed a tool that loses its identity as goods during the printing process, and no property could be said to pass in ink during printing. The Court emphasized that what is taxable under the Act is the value of goods transferred to the customer, not the value of goods used or consumed in the process without resulting in a transfer of property.

Consequently, the Court ruled in favor of the assessee, affirming that there was no transfer of property in ink during the printing job-work. The reference was answered in the affirmative, disposing of the case with no costs incurred.