Printed stationery as goods for sale: printing to order was treated as manufacture, and composite paper-and-print transactions remained taxable.

Printed stationery made to customers' specifications was treated as a commercial commodity and the printer as a manufacturer, because the substance of the arrangement was production of an article for delivery and sale rather than a mere contract of labour. Sales tax was therefore attracted. The court also rejected the attempt to split the supply of paper and the printing into separate transactions: separate cash and credit memos were insufficient to prove distinct contracts, and in the absence of evidence of an earlier purchase of paper followed by a separate printing contract, the finished printed material remained taxable as one composite sale of goods.

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Issues: (i) Whether printed stationery prepared to customers' specifications and supplied by the printer is goods manufactured and sold so as to attract sales tax under the Madhya Bharat Sales Tax Act, 1950. (ii) Whether the supply of paper and printing could be treated as two separate transactions so as to avoid tax on the printed material.

Issue (i): Whether printed stationery prepared to customers' specifications and supplied by the printer is goods manufactured and sold so as to attract sales tax under the Madhya Bharat Sales Tax Act, 1950.

Analysis: The definitions of "goods", "dealer" and "manufacturer" in the Act were applied to the business of printing stationery to order. The printed stationery was held to be a commercial commodity capable of sale, and the printer, by producing such stationery from materials, was treated as a manufacturer. The substance of the transaction was the production of an article to be sold to the customer, not merely a contract of labour and service.

Conclusion: Yes. Printed stationery supplied to customers was goods manufactured for sale and was liable to tax.

Issue (ii): Whether the supply of paper and printing could be treated as two separate transactions so as to avoid tax on the printed material.

Analysis: The separate cash and credit memos were treated as insufficient to prove distinct contracts. In the absence of evidence that the customer first purchased paper and thereafter separately engaged printing work, the taxing authorities were justified in treating the supply of paper and the printing as one composite transaction. On that footing, the finished printed stationery remained taxable, and the claim that it was merely a resale or that no tax could again be levied on the finished article was rejected.

Conclusion: No. The supply of paper and printing was not established as two separate contracts, and the finished printed material remained taxable.

Final Conclusion: The reference was answered against the assessee on the substantive taxability questions, and the printed stationery business was held to fall within the charging provisions applicable to manufacturers.

Ratio Decidendi: For sales tax purposes, the nature of a printing arrangement is determined by the substance of the contract; where the real object is production of printed stationery for delivery to the customer, the printer is a manufacturer and the transaction is a sale of goods, unless distinct transactions are proved.

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