Printed material under a printing arrangement is a works contract, not a sale, when transfer of materials is merely incidental.

A printing arrangement for supplied material was treated as a works contract, not a sale, because the customer received printed goods as the result of printing work carried out in the printer's press. The transfer of paper and ink to the customer was only incidental and ancillary to the composite charge for printing, so the substance of the transaction was work and labour rather than a sale of goods. On those facts, the Supreme Court of India held that the supply of printed material did not amount to a sale and the appeal failed.

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Issues: Whether the supply of printed material under the printing arrangement constituted a sale or a works contract.

Analysis: The supply was for printing work carried on in the respondent's printing press. The charge was composite, and the transfer of paper and ink to the customer was only incidental or ancillary to the printing contract. On the facts found, the transaction was not one of sale but was in substance a contract for work and labour.

Conclusion: The supply of printed material was a works contract and not a sale; the appeal failed.

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