Work and labour contract for advertisement paintings remains non-taxable despite incidental transfer of boards.

Where advertisement paintings are executed on boards purchased by the assessee and supplied to customers for a consolidated price, the transaction is characterised by the painter's skill and labour rather than a sale of goods. The supply of boards is incidental to the dominant obligation to perform work to customer specifications, so the composite contract remains one for work and labour. An incidental transfer of materials does not change the essential nature of the arrangement into a taxable sale, and the disputed turnover was therefore not liable to sales tax.

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Issues: Whether the turnover from advertisement paintings executed by the assessee on boards purchased by him and supplied to customers for a consolidated price was taxable as a sale, or was a contract for work and labour not liable to sales tax.

Analysis: The bargain was found to be primarily for the painter's skill and labour in preparing advertisement paintings to the customers' specifications. The supply of boards was only incidental to that main obligation. The transfer of the boards did not alter the essential character of the transaction, which remained a composite contract dominated by work and labour rather than a sale of specific goods.

Conclusion: The disputed turnover was not liable to sales tax, and the assessment and penalty on that turnover could not stand.

Ratio Decidendi: Where the substance of the transaction is a contract for work and labour, an incidental transfer of materials does not convert it into a sale for the purposes of sales tax.

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