2015 (2) TMI 431 - HC - VAT and Sales Tax

Works contract - Printing press - Held that - Questions are squarely answered by the decision of this Court in the case Commissioner, Trade Tax, U.P. Lucknow Vs. M/s. Aristo Printers Pvt. Ltd. Ghaziabad 2010 (12) TMI 1095 - ALLAHABAD HIGH COURT wherein this Court has come to the conclusion that printing work is in the nature of works contract relying on the Apex Court decision in the case of State of Maharashtra vs. M/s Sarvodya Printing Press Fine Art Printer reported in 1994 (3) TMI 363 - BOMBAY HIGH COURT . Undoubtedly, ink is passed on to the customers as is apparent from the ultimate printed material. The tax assessed by the assessing authority on the value of ink and processing material as normal chemical is, therefore, justified. - Decided against assessee.

Issues:
1. Interpretation of the definition of 'contract' under Section 2(m) of the U.P. Trade Tax Act for job work of printing.
2. Tax liability on the value of plates, chemicals, and ink consumed in the printing process under Section 3-F(2)(b) of the Act.
3. Taxability of ink, chemical, and plates in the printing process.
4. Transfer of property in goods regarding ink consumed in printing.
5. Determination of incidental sale or purchase of goods in the printing process.
6. Taxability of pre-sensitive coated plate in printing.
7. Applicability of previous tribunal decisions.
8. Identity of ink, chemical, and coated plate during printing.
9. Consumable nature of ink, chemicals, and plates.
10. Consideration of decisions by appellate authority and assessing authority for other assessment years.
11. Evaluation of the plea raised by the applicant.
12. Tax liability under Section 3F(2)(b) of the Act for printed material supplied to a party outside the state.

Analysis:

1. The Court referred to the case law Commissioner, Trade Tax, U.P. Lucknow Vs. M/s. Aristo Printers Pvt. Ltd. Ghaziabad and the Apex Court decision in State of Maharashtra vs. M/s Sarvodya Printing Press Fine Art Printer to establish that printing work falls under the category of works contract. The passing of ink to customers through the printed material justifies the tax assessment on the value of ink and processing material by the assessing authority.

2. The revision filed by the State for the assessment year 1996-97 against the Tribunal's order was based on the questions of law regarding the inclusion of job work of printing under the definition of 'contract' and the tax liability on plates, chemicals, and ink consumed in the printing process. The Court upheld the tax assessment on ink and processing material, dismissing the revision due to lack of merit.

3. The Court addressed various aspects of taxability concerning ink, chemicals, and plates used in the printing process, emphasizing the justification for taxing the value of ink and processing material consumed during printing. The decision was supported by the nature of works contract in printing activities, as established in previous legal precedents.

4. The Court's decision highlighted the importance of considering the transfer of property in goods, especially regarding ink consumed in the printing process. The judgment emphasized the passing of ink to customers through the printed material, justifying the tax assessment on ink and processing material by the assessing authority.

5. The Court analyzed the concept of incidental sale or purchase of goods in the printing process, emphasizing that the use of ink and chemicals is incidental to the printing process. The decision was based on the specific circumstances of the case and the nature of the printing industry's operations.

6. The Court examined the taxability of pre-sensitive coated plates in printing, emphasizing their one-time use nature and the lack of property transfer in goods during the execution of work. The judgment drew on legal precedents to support the conclusion that such plates do not constitute a taxable transfer of property.

7. The Court scrutinized the applicability of previous tribunal decisions, emphasizing the need for relevance to the specific circumstances of the case. The judgment highlighted the importance of considering the facts and context of each case when relying on previous legal interpretations.

8. The Court discussed the identity of ink, chemicals, and coated plates during the printing process, emphasizing that these materials lose their identity as they are used for printing newspapers. The judgment concluded that no tax could be imposed on the purchase of such goods due to their consumable nature in the printing process.

9. The Court considered the consumable nature of ink, chemicals, and plates used in the printing process, noting that the applicant did not realize any cost from the publishers. The judgment highlighted the specific characteristics of these materials in the printing industry and their role as consumables rather than saleable goods.

10. The Court evaluated the decisions by the appellate authority and assessing authority for other assessment years in the case of the applicant. The judgment emphasized the need to consider the consistency and relevance of previous decisions in determining the tax liability and legal interpretation in the present case.

11. The Court examined the plea raised by the applicant in support of its case, emphasizing the importance of considering all relevant arguments and evidence presented during the proceedings. The judgment highlighted the need for a thorough review of the applicant's submissions to ensure a fair and comprehensive assessment of the case.

12. The Court addressed the tax liability under Section 3F(2)(b) of the Act for printed material supplied to a party outside the state, emphasizing the legal provisions regarding such transactions. The judgment considered the specific circumstances of the case and the applicability of relevant statutory provisions in determining the tax liability for printed material supplied to parties outside the state.

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