SARDAR PRINTING WORKS Vs. SALES TAX COMMISSIONER

JUDGEMENT

(1.) THIS reference by the Commissioner of Sales Tax under Section 13 (1) of the madhya Bharat Sales Tax Act, 1950, arises out of the matter of liability of Messrs. Sardar Printing Works to pay sales tax on the sales of printed stationery during the year 1952-53.

(2.) THE assessee carries on business in Indore as printers. That business consists in printing to the order of individual customers letterheads, bill-books,, registers etc. , and other stationery of business character. The Customers did not supply the paper for the stationery required by them. They merely explained to the printer exactly the goods they desired and the printer furnished the goods at a fixed price. For the year 1952-53, the total turnover of the assessee, as shown in his returns, was Rs. 24529-10-6. He claimed before the assessing authority that this taxable turnover was nil as the transactions of sales of paper were distinct and separate from the printing work done by him and the charges recovered for that work, and that he had from time to time issued separate cash and credit memos for the sale of the paper used by him and the printing charges. The assessing authority took the view that the cash and credit memos issued by the assesses for the paper were merely paper transactions and that there was nothing to show that the paper used by the assessee printer was sold by him separately to the customers before executing the printing work thereon. The assessing authority, therefore, after deducting the cost of the paper on which sales-tax had already been paid by the assessee and after making other permissible deductions determined the taxable turnover of the assessee at Rs 9,339-1-0 and levied sales tax accordingly. The assessee then preferred an appeal before the Appellate Judge which was rejected. He then took the matter in revision before the Sales-tax Commissioner who agreeing with the decisions of the assessing authority and the Appellate Judge rejected the revision petition. The Sales-tax Commissioner has how, at the instance of the assessee, made this reference stating the following questions for the opinion of this Court :

(3.) UNDER Section 3 (1), (b) every manufacturer whose turnover exceeds Rs. 5,000/.- is liable to pay tax under the Act on his taxable turnover in respect of the sales or supplies of goods effected in Madhya Bharat from the 1st day of May, 1950. Section 2 (k) defines 'manufacturer' as a dealer who from materials produces goods by manual or animal labour or by machinery, and also includes a processor. "goods" have been defined in Section 2 (g) as meaning all kinds of movable property other than certain things specified in the section. 'dealer' has been defined in Section 2 (f) as "any person or association of persons carrying on the business of selling or supplying of goods. . . . . " Under a notification issued by the government on 22nd May. 1950, in exercise of its powers under Section 5 of the act. sales-tax at the rate of Rs. 3/2/- per cent is liable on stationery goods of every kind which include ink, penci), holders, pad and things required in an office excluding exercise books. The relevant item in the notification is No. 34 which runs as follows :. . (VERNACULAR MATTER OMMITED ). . The tax is payable by am importer or a manufacturer of these goods.