The State of Tamil Nadu vs Tvl. The Nadar Press Limited

Sanjay Kishan Kaul, C.J.—Admit.

Learned counsel for the first respondent accepts notice.

At the request of the learned counsel for the parties, the writ appeal is taken up for final disposal.

The 1st respondent/assessee in its sales tax turnover for the Assessment Year 1995-96 claimed a turnover as works contract. The transaction in question pertains to the activity carried on by the 1st respondent assessee of printing and manufacturing of beedi labels for a particular customer. The Assessing Authority, however, treated it as out-right sale and also levied penalty. This order was set aside by the Appellate Assistant Commissioner and the matter was remanded back to the Assessing Officer, directing to reassess the transaction as works contract. Penalty was also set aside. Further appeal before the Tribunal met with the same fate.

In the further challenge laid by the appellant department before the learned single Judge, it has been rightly observed that the ultimate fact finding authority being the Tribunal, after taking into consideration the factual position, has confirmed the finding of the appellate authority that printing and manufacturing of beedi labels and supplying the same for a particular customer is only works contract and not sale.

It can be hardly disputed before this Court by the learned Special Government Pleader for the appellant that such labels cannot be sold in open market by themselves. In fact, in the impugned order, reference has been made to two judgments of the Hon''ble Supreme Court,

(i) State of Tamil Nadu Vs. Anandam Viswanathan, & Builders Association of India and others Vs Union of India and Others); and

(ii) 100 STC 417 - Thomson Press (India) Ltd., and another Vs State of Haryana and another,

while coming to the conclusion that where the finished product supplied to a particular customer cannot be sold in the open market to any other person, a transaction is only a works contract. The second judgment, in fact, deals with printing of stationary (akin to printing and manufacturing of labels in the present case).

The learned Special Government Pleader for the appellant seeks to rely upon a judgment of the Hon''ble Supreme Court in Patnaik and Company Vs. State of Orissa, , which was a case of building bodies on chassis supplied by the Government. The Supreme Court observed that property in bus body did not pass on its being placed or constructed on chassis but the whole vehicle including bus body was delivered and the construction of contract as a whole showed that transaction was for sale of goods and not contract for works. This judgment would, thus, hardly apply to the facts of the present case.

We are, thus, of the view that filing the present appeal is an example of the ritual followed by departments, without any basis only burdening the Court with litigation, despite the professed policy of the Government to not file unnecessary appeals. We thus dismiss the appeal with costs, quantified at Rs.5000/-. Connected miscellaneous petition is also dismissed.