COMMISSIONER OF SALE TAX Vs. MATUSHREE TEXTILE LTD

JUDGEMENT

(1.) AT the instance of Commissioner of Sales Tax, bombay, the Maharashtra Sales Tax Tribunal has referred the following questions for our opinion, under section 61 (1) of the Bombay Sales Tax Act, 1959. (i) Whether on the facts and in the circumstances of the case, and on a true and correct interpretation of provisions of the Maharashtra Sales Tax on Transfer of Property in Goods Involved in the Execution of Works contract (Re-enacted) Act, 1989, the Tribunal was justified in holding that the processes of dyeing and printing of cloth do not fall within the ambit of purview of the said Act? (ii) Whether on the facts and in the circumstances of the case, and on a true and correct interpretation of provisions of the Maharashtra Sales Tax on Transfer of Property in Goods Involved in the Execution of Works contract (Re-enacted) Act, 1989, the Tribunal was justified in law in holding that the activity in which the transfer of property in goods is too insignificant will not attract the provisions of the said Act?

(2.) FACTS relevant for this reference, are that the respondent is a Limited company engaged in the business of dyeing, bleaching and printing of grey fabrics received from the customers. For the purpose of dyeing, bleaching and printing, the respondent uses materials such as colours, dyes and chemicals and these materials are converted into a solution and stored in a tank. Therefore, the grey fabric is passed through the above solution several times, till the requisite coloured shade is obtained on the fabric as per the specifications of the customer. Thereafter, the dyed fabric is washed through a water solution to drain away the chemical solution remaining on the fabrics. On completion of the job-work, the dyed/printed fabrics with the requisite coloured shade are returned by the respondent to the respective customers.

(3.) ON 1/11/1988, the respondent raised an issue before the Commissioner of Sales Tax, under section 52 of the Bombay Sales Tax Act, 1959 (hereinafter referred to as the "bst Act" for short), for determination, as to whether or not the respondent who undertakes the job work of dyeing, printing and bleaching, is a dealer, within the meaning of section 2 (l) (d) of the maharashtra Sales Tax on the Transfer of Property in Goods Involved in the execution of Works Contract (Re-enacted) Act, 1989 (hereinafter referred to as the "works Contract Act" for short ). It was the contention of the respondent that the colours, dyes and chemicals are consumed in the process of dyeing, printing and bleaching and, therefore, the property in those goods were neither transferred as goods nor in any other form and hence the provisions of the Works Contract Act are not attracted.