2007 (1) TMI 519 - AT - VAT and Sales Tax

Summary

Issues:
1. Maintainability of the application under section 8 of the West Bengal Taxation Tribunal Act, 1987.
2. Whether printing of computer papers and stationery as per client's specification falls within the definition of works contract under the West Bengal Sales Tax Act, 1994.

Issue 1: Maintainability of the Application

The West Bengal Taxation Tribunal Act, 1987 lacks provisions on who can file applications, thus the Code of Civil Procedure applies. The petitioner, an unregistered association, filed the application without legal capacity. However, as per Order I Rule 8 CPC, a member of such an association can file with court permission. The application was admitted, implying granted permission, supported by a letter of authority from some association members. Non-compliance with Order I Rule 8(2) CPC, while important, is not fatal if the respondent is not prejudiced.

Issue 2: Definition of Works Contract

The definition of works contract under section 2(42) of the West Bengal Sales Tax Act, 1994 includes processing goods for valuable consideration. Rule 2(mm) excludes making computer stationery from paper as manufacturing. The Constitution's Article 366(29A)(b) defines tax on works contract. The petitioner argued printing using own goods is a service, citing Rainbow Color Lab case. The State relied on Sarvodaya Printing Press case, where the Supreme Court held the supply of printed material was a works contract. The judgment emphasized the dominant intention to transfer goods for a works contract. The West Bengal Act's definition of manufacturing excludes making computer stationery, aligning with the petitioner's activity. Thus, the printing activity using own materials is not a works contract under the Act.

In conclusion, the application was deemed maintainable due to granted permission and the printing activity did not qualify as a works contract under the West Bengal Sales Tax Act, 1994. The judgment favored the petitioners, declaring their printing activity using own materials and computer under agreement was not a works contract as per the Act.