STATE OF TAMIL NADU Vs. ORIENT PACKAGING INDUSTRIES

JUDGEMENT

(1.) THE Revenue has filed the writ petition against the order made by the Sales Tax Appellate Tribunal (Additional Bench), Madurai, in MTSA No. 537 of 1999, dated March 30, 2000, wherein the order of the first appellate authority has been confirmed by reversing the order of the assessing officer, who held that in respect of a turnover to a sum of Rs. 18,39,869, the transactions are outright sale and it is not a works contract.

(2.) THE assessment year is 1992 -93. During the assessment year, it appearsthat the first respondent has manufactured biscuit boxes and labels for M/s. Cookies India (P) Ltd., 15/638, Chiyyaram, Tirchur, Kerala State, for whicha turnover of Rs. 18,39,869 was claimed as exemption as it is Central salestax transaction. The assessing officer rejected the claim of the first respondent and brought the turnover to taxes. As against that order, the assessee/first respondent carried the matter on appeal to the Appellate Assistant Commissioner (CT) in Appeal No. CST 144/1994. The first appellate authority, having regard to the nature of the activities carried out by the first respondent, has concluded that the transactions were only works contract and not outright sale. During the relevant period, there is no tax liability for inter -State works contract and gave a finding that the first respondent was entitled to claim exemption and remitted the matter back to the assessing officer for the purpose of redoing the assessment. The operative portion of the order of the first appellate authority is as under: In view of the above facts and falling in line with the decisions taken in MTA 660 of 1994 to 664 of 1994 dated August 6, 1997 and in MTA 183 of 1996 and 184 of 1996, 1 set aside the assessment made on Rs. 18,39,869 and remand back the case to the assessing officer with a direction to assess the transactions as works contract after observing the procedure.

(3.) AS seen from the assessment order, the first respondent's transaction in respect of the turnover for a sum of Rs. 18,39,869 is in respect of its transaction of making biscuit boxes and labels for a particular customer known as M/s. Cookies India (P) Ltd., 15/638, Chiyyaram, Tirchur, Kerala State. The activities carried out by the first respondent, as could be seen, were embossing, scoring and pasting cookies cashew drops on biscuit boxes and lamination thereon. The entire transaction is in respect of a particular customer. When that being the factual position, the first appellate authority as well as the Tribunal have correctly come to the conclusion that it was a works contract and not an outright sale, by following the various decisions on that issue. All those decisions have categorically stated that in respect of works contract, each case has to be decided on its own merits depending upon the contract entered into by the assessee with the customer. As already stated, here, in this case, the contract was only for manufacturing biscuit boxes, labels, printing and lamination in respect of a particular customer, namely M/s. Cookies India (P) Ltd., 15/638, Chiyyaram, Tirchur, Kerala State. Hence it can only be regarded as a works contract and not otherwise.