The Orient Litho Press vs The Commercial Tax Officer - I and The Joint Commissioner (CT)-III (SMR) Office of the Commissioner of Commercial Taxes

K. Chandru, J.—The two writ petitions are filed by the same petitioner M/s. Orient Litho Press, represented by its partner. In W.P. No. 2694 of 2005 the challenge is to the common order dated 14.12.2004 passed by the second respondent/Joint Commissioner in exercise of suo motu revisional power against the order of the Appellate Assistant Commissioner, Commercial Tax, Virudhunagar, in Appeal Number C.S.T. Nos. 74 of 1990 and 75 of 1990 dated 22.08.1990.

The Assistant Appellate Commissioner in those two orders had set aside the order of the Assessing Authority in C.S.T. No. 489413/84-85 and 85-86 dated 30.03.1990. Two questions came up for consideration before the Appellate Assistant Commissioner. One was whether the petitioner is liable to tax under the Central Sales Tax for the work done by him in the printing of books on the basis of the order placed, would amount to sale. Secondly, the printing of lottery tickets on behalf of Government of Andhra Pradesh and Uttar Pradesh would also amount to a sale.

It must be noted that the Central Sales Tax the definition of ''sale'' found in Section 2(g) came to be amended by Central Act 20 of 2002 and it was brought into effect from 11.05.2002. In the amended provision the definition of sale has undergone a vast change with the constitutional breaking given under a constitution amendment. Therefore, by the amended provision even a works contract can be treated as a sale. But in these two cases the transaction took place before the amendment.

The Government of Tamil Nadu by G.O.Ms. No. 976 Revenue dated 28.03.1959 had exempted the printing and selling of printed material is not a sale. Even a printer of the reading books was entitled to exemption under the said G.O. This question came up for consideration before a Division Bench of this Court reported in Tvl. Kannan Art Calenders, Sivakasi Vs. The State of Tamilnadu, . In that judgment the earlier judgment reported in State of Tamil Nadu Vs. Papco Offset Printing Works, was also commented upon.

In any event, taking note of the legal provision the Assistant Appellate Commissioner held that the printed materials as well as printing of lotteries would not amount to sale. Therefore, he allowed both the appeals by the order dated 22.08.1990. However, the second respondent/Joint Commissioner issued a notice on 28.04.1992 after a period of two years and asked the petitioner to show-cause as to why these two items should not be included for the purpose of assessment for tax. The petitioner gave his reply and thereafter after giving a hearing on 27.10.2004 the second respondent passed a final order dated 14.12.2004.

In that order he had held that printing of materials would amount to works contract and it is also amount to a sale. While setting aside the Appellate Assistant Commissioner''s order, he directed the Assessing Authority to make a fresh assessment after scrutinizing the account with reference to the liability under works contract. This is a self contradictory order. The moment the Revisional Authority came to the conclusion that it is a works contract then it is not liable for any tax, if the transaction relates to a period before 11.05.2002 when the comprehensive amendment was brought into the definition of Section 2(g) of the CST Act. The finding that if it is a works contract thereafter remanding the matter to the Assessing Authority for fresh consideration may not arise since it is a pre-amended transaction.

A detailed counter affidavit dated 15.09.2008 is filed by the Commercial Tax Officer/first respondent Assessing authority justifying the Tax by the Revenue. Though several arguments were stated for the first time, it is not explained as to why the revenue had not taken the appellate order on appeal. On the contrary the order had became final in the year 2000 and it is only by the suo motu revisional power the subject is sought to be reopened.

In any event, the counter affidavit goes contrary to the findings rendered by the Joint Commissioner who had categorically held that it amounts to a works contract. The first respondent in the guise of the counter affidavit cannot supply new basis to the order passed by the second respondent.

Under these circumstances, the order of remand made by the second respondent by the impugned order does not stand scrutiny of law and it is without jurisdiction. Having found the two transactions of the petitioner would amount to a works contract, there is no question of any further remand, as the transactions were admittedly made before 11.05.2002 and the amendment had not come into force. Hence, both the writ petitions are allowed. The impugned orders will stand set aside. No costs. Consequently, connected M.Ps. are closed.