STATE OF MADRAS Vs. BOMAS LIMITED

JUDGEMENT

(1.) THE assessee Messrs Bomas Limits are a firm of advertising agents. THE Joint Commercial Tax Officer, Mount Road , Madras, assessed them for the year 1959-60. THE assessee appealed to the Appellate assistant Commissioner in regard to a part of the turnover. While disposing of the appeal, the Appellate Assistant Commissioner enhanced the turnover by a certain amount, and included therein what the assessee had described in their bills as "art charges and translation charges". THE amount so added came to Rs. 14, 650-92. THE assessee appealed to the Sales Tax Appellate tribunal, Madras, disputing this addition. His contention was that for the customers, who came to him for advice in the matter of advertisement, he supplied ideas and sketches and also words to be used for advertisement purposes. THEreafter the nature of the design of the advertisement was settled between the customer and the assessee. If the customer so required, the assessee also placed an order in accordance with the design with the block-maker on the agreement that the price charged by the block-matter for making the block would be passed on to the customer together with a commission of 15 per cent. It was in the course of such a transaction that the assessee had come to charge in the bills supplied to his customers an item under "art charges and translation charges" separately from the amount due for the actual making of the block together with 15 per cent. commission thereon. THE Tribunal upheld the assessee's contention and held that the amounts described as art charges and translation charges formed no part of the taxable turnover and should not have been assessed.

(2.) THE state of Madras has filed this revision case against the said order. We will refer to the order of the Sales Tax Appellate Tribunal for the nature of the contract entered into between the customer and the assessee in this case : "the appellants in consultation with the customers prepare the drawing or photograph and their art department prepares the design for advertisement. We have been shown such products. It would appear that after approval thereof by the customer, it is entrusted to the block-makers. It is stated by the appellants that the photography is done by others and that the block is done elsewhere. THE appellants charge the cost of art work separately from charges for block-making. . . . . . THEy procure the photograph suitable to their idea to make the block and for that, they charge as art charges. " *