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Judgment
R. Subhash Reddy, J—T.R.C. Nos. 80, 83, 85, 100, 169 & 170 of 2002 and 11, 58, 92, 93, 255 & 292 of 2003 are filed by the Revenue, whereas T.R.C. Nos. 93, 96, 97 & 123 of 2002 are filed by the assessees aggrieved by the common order, dated 09.08.2000, passed in T.A. Nos. 683, 684, 685 & 757 of 1997; 124, 160, 161, 162, 249, 369, 370 & 371 of 1998 and 1747 of 1999 by the Sales Tax Appellate Tribunal, Andhra Pradesh, Hyderabad. The assessees are printers and dealers in cine-wall posters. The revisional and appellate authorities have treated the business transactions of assessees as sale of goods, but not as items falling under works contract. Aggrieved by the same, the assessees carried the matter by way of appeals before the Sales Tax Appellate Tribunal. The appellate Tribunal, by impugned order, dated 09.08.2000, has held that the first part of work involving preparation of negatives of wall-posters is exclusively a job work involving absolute skill and labour and hence, money charged for preparation of the same is not subjectable to sales tax. However, the second part of the work involving printing of positive prints of wall-posters in several number of copies was deemed as works contract and as such, tax was levied.
The questions of law framed for consideration in the revision cases filed by the Revenue read as under:
"1. Whether the activity of preparing negative and positive delivery to customers a job work as contended by dealers or a sale transactions.
Whether the S.T.A.T., is justified in setting aside the orders of the lower authorities and remanding the matter to the assessing authority."
When the matters are called, it is represented by the learned counsel for parties that in view of the latest judgments of the Honourable Supreme Court in Larsen and Toubro Limited and Another Vs. State of Karnataka and Another, (2013) 12 AD 107 : (2013) 199 ECR 413 : (2014) 303 ELT 3 : (2013) 13 JT 82 : (2013) 12 SCALE 77 : (2014) 1 SCC 708 : (2014) 34 STR 481 : (2013) 65 VST 1 and State of Karnataka Vs. M/s. Pro Lab and Others (Civil Appeal No. 1145 of 2006, dated 30.01.2015), the questions that arise for consideration in this batch of cases are already answered.
In the aforesaid judgments, with regard to the first limb i.e., preparation of negatives and delivery etc., to the customers, the Honourable Supreme Court has held that it also amounts to works contract, which is part of deemed sale. Hence, the issue involved in this batch of cases is covered by the aforesaid judgments. In that view of the matter, the order of the Tribunal to the extent of exempting tax on the first limb i.e., preparation of negatives of wall posters, is liable to be set aside.
Accordingly, T.R.C. Nos. 80, 83, 85, 100, 169 & 170 of 2002 and 11, 58, 92, 93, 255 & 292 of 2003 filed by the Revenue are allowed in part by setting aside the impugned order to the extent indicated above. Consequently, the matters are remanded to the assessing authority with a direction to make fresh assessment by treating the entire work as a works contract.
In view of the aforesaid findings, T.R.C. Nos. 93, 96, 97 & 123 of 2002 filed by the assessees are liable to be dismissed and are accordingly dismissed. Miscellaneous Petitions, if any, pending in these revision cases shall stand closed. No costs.