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TMI Blog2023 (10) TMI 990X X X X Extracts X X X X X X X X Extracts X X X X ..... act itself, it is the responsibility of the petitioner to use the required paper for the purpose of printing. Neither the printed material nor the raw material paper can be separated, nor can the aforesaid two materials be sold independently at the first instance and neither can the same can be sold by the petitioner in any manner. It can be sold only by the publisher who has got the materials printed. The fact which needs to be further looked into is that if the transaction between the printer and the publisher is treated as sale, then the publisher in turn would claim exemption on the sale value of the textbook on the ground of the same being second sale. Therefore, the contention of the learned counsel for the petitioner becomes difficult to be accepted - Yet another fact which needs to be considered is that if the contention of the learned counsel for the petitioner is to be accepted, then there shall be no distinction between the printing of textbooks, magazines and periodicals and the printing works of letter heads, bill books, account books, leaflets etc., as any printing carried on by the printer would have to be treated as sale upon which G.O. Ms. No. 625 would become appl ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nize the issue involved in the case, it would be trite at this juncture to refer to the contents of G.O. Ms. No. 65 which for ready reference is being reproduced herein under: "Exemption to periodicals and printed books for reading G.O. Ms. No. 625 Rev. (CT-II) dt. 31.7.1996. NOTIFICATION XI In exercise of the powers conferred by sub-Section (1) of Section 9 of the Andhra Pradesh General Sales Tax Act, 1957 (Andhra Pradesh Act No.VI of 1957), the Governor of Andhra Pradesh hereby exempts the sales tax payable under the said Act on the sales of Periodicals and printed books for reading. (Published in A.P. Gazette, Part I Extra-Ordinary dt. 1.8.1996" 8. Now we may further proceed to take note of the nature of work executed by the petitioner. As has been stated in the preceding paragraphs, the petitioner is a limited company engaged in the business of printing. They have highly automated printing press and they print books and also publish periodicals like magazines etc., apart from printing of brochures, leaflets etc. There is no dispute so far as payment of tax to other materials printed by the petitioner except for the printing of textbooks, magazines and periodicals for w ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... bunal * Kandula Radhakrishna Rao And Ors. vs The Province of Madras AIR 1952 Mad 718, (1952) * Commissioner Of Central Excise Versus Favourite Industries (2012) 7 Supreme Court Cases 153 * Union of India v. M/s. Ranbaxy Laboratories Ltd and Ors. AIR 2008 Supreme Court 2286 * Indian Farmers Fertiliser Co-operative Ltd v. Collector of Central Excise, Ahmedabad AIR 1996 Supreme Court 2542 * M/s. Swadeshi Polytex Ltd v. Collector of Central Excise AIR 1990 Supreme Court 301 * Tata Oil Mills Co. Ltd. Versus Collector Of Central Excise (1989) 4 Supreme Court Cases 541 13. It was also the contention of the learned counsel for the petitioner that it is a case where the entire raw material is used by the petitioner himself for the preparation of the textbook, magazines and periodicals and it is not being provided by the publisher. For this reason also it has to be considered as an outright sale rather than treating as a works contract. 14. Per contra, learned Senior Standing Counsel for the respondents took the Court through the decisions rendered by the Tribunal and also the order passed by the Revisional Authority on 14.09.2003 and contended that the Tribunal as also, the Re ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... its members, but does not include a mortgage, hypothecation or pledge of, or a charge on goods." (t) "works contract" includes any agreement for carrying out for cash or for deferred payment or for any other valuable consideration, the building construction, manufacture, processing, fabrication, erection, installation, fitting out, improvement, modification, repair or commissioning of any movable or immovable property. 18. Admittedly, the petitioner is a business organization which is otherwise into the business of printing of textbooks, periodicals and other materials as per the orders/demand received from the various customers. What is also undisputed is that there is a contract entered with the customers for the printing of the books and magazines as the case may be. The contract is for the quantity of the printed materials in the form of books and magazines. After getting it binded, the material to be printed is provided by the customers in the CD/Zip which after the printing is done is returned back to the customer. The charges for the printing are collected on piece rate basis of the finished product which is otherwise the textbook or the magazines. 19. It is a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... would clearly indicate that none of those petitions were decided dealing with a subject like printing of textbooks, magazines and periodicals. Therefore, those judgments cannot be made applicable to the facts of the present case. 26. The Hon'ble Supreme Court of India in the case of State Of Karnataka And Others Versus Pro Lab And Others (2015) 8 Supreme Court Cases 557 dealing with the issue of sale of 'goods' and 'services' in paragraph No. 20 held as under: "To sum up, it follows from the reading of the aforesaid judgment in Larsen and Toubro case that after insertion of clause (29-A) in Article 366, the works contract which was indivisible one by legal fiction, altered into a contract, which is permitted to be bifurcated into two: one for "sale of goods" and other for "services", thereby making goods component of the contract exigible to sales tax. Further, while going into this exercise of divisibility, dominant intention behind such a contract, namely, whether it was for sale of goods or for services, is rendered otiose or immaterial. It follows, as a sequitur, that by virtue of clause (29-A) of Article 366, the State Legislature is now empowered to segregate the goods ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... f any material such as paper, ink or standard money receipt books for general use. (3) The MPEB also does not deal in any goods. (4) Charges for supply are one composite amount for the entire job. (5) The applicant could not sell the receipt books to anyone else and was obliged to destroy the excess left over. (6) The receipt books were of no commercial use to anyone else and hence had no marketable value. 4. Having regard to the special type of job work done and other basic circumstances noticed above, it seems to us that the supply does not represent a transaction of sale but represents a works contract which is not subject to sales tax. The intention of parties is most material and it is obvious. The principal object of the MPEB was to get the material printed and not to purchase the printed material. Charges were composite. The books were specially designed for MPEB as per its specifications as to size, type, colour, format, background, etc. No space was left blank obviously because the books were valuable and upon misuse could cause terrible loss to the MPEB. Under the contract the applicant could not retain or use the printed books and the excess, if any, had to ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s possible only when the intention of the parties is found out. The fact that in the execution of a contract for work some materials are used and the property in the goods so used, passes to other party, the contractor undertaking to do the work will not necessarily be deemed, on that account, to sell the materials. Whether or not and which part of the job-work relates to that depends, as mentioned hereinbefore, on the nature of the transaction. A contract for work in the execution of which goods are used may take any one of the three forms as mentioned by this Court in Government of Andhra Pradesh v. Guntur Tobaccos [1965] 16 STC 240." 29. In the light of the aforesaid judicial pronouncements, if we look into the judgments which have been relied upon by the learned counsel for the petitioner as has been discussed earlier, those judgments are firstly under entirely different contextual background and none of those deal with the printing of the textbooks, magazines and periodicals or have been dealt under an entirely different jurisdiction other than the taxing regime. In view of the same, we are of the considered opinion that no strong case for interfering with the impugned order ..... X X X X Extracts X X X X X X X X Extracts X X X X
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