MOHAN OFFSET PRINTERS Vs. STATE OF TAMIL NADU

JUDGEMENT

(1.) The above tax case revision was admitted on the following substantial questions of law:-

(2.) The tax case revision arises under the following circumstances as per the version of the petitioner. The revision petitioner (hereinafter referred to as "the assessee") is basically Offset Printers and doing the job work of printing and supplying labels, cartons and drappers for notebooks. The assessee prints and supplies the materials as per the specification, design and general layout of the customers with their name and address predominantly printed. The printed items cannot be sold to any other person in the market. According to the assessee, it undertakes the job only on work contract basis. The customers used to supply papers. The assessee used to purchase pigments, linseed oil and chemicals from dealers both locally and outside the State against 'C' forms and manufactures printing ink. When the ink is used for printing the materials on work contract basis, such ink is consumable one and no transfer of property is effected. In the circumstances, the provisions of Section 3-B of the Tamil Nadu General Sales Tax Act, 1959 (for short, "the TNGST Act") are not applicable, as it applies for levy of tax only on transfer in the goods involved in the execution of works contract. On the above ground, the assessee reported a total and taxable turnover of Rs.8,54,197/- and Nil respectively in the Form A1 returns filed for the assessment year 1993-94.

(3.) According to the assessing officer, the accounts of the assessee were called for and checked. It revealed the coolie printing charges collected as per accounts at Rs.8,54,197.20. Though the papers are supplied by the customers while they place orders, the assessee manufactures printing ink by purchasing the necessary raw materials and that such printing ink is used in the job work of printing. Therefore, a new commodity of printing ink emerges out and such printing ink had not suffered tax at earlier stage. When the printing ink is used, it amounts to transfer of property and the printing ink is visible and tangible even after printing and accordingly the printing ink is liable to sales tax at 8%. With the said finding, the assessing officer levied the tax.