Supply of publicity materials treated as sale where accounts and contract showed consideration and profit-making activity.

Supply of posters and other publicity materials to film producers was treated as a sale because the accounts showed debit to the producers and credit to a publicity sale account, the assessee offered no satisfactory explanation that the handling charges were only service remuneration, and the contract required bills to be drawn against the distributor. Those facts supported the inference that the assessee printed the materials at its own cost, supplied them for consideration, and earned profit. The transactions therefore fell within the definition of sale and the assessee was held to be a dealer under the Andhra Pradesh General Sales Tax Act.

---

---

Issues: Whether the supply of posters and other publicity materials by the assessee to film producers constituted a sale under the Andhra Pradesh General Sales Tax Act, and whether the assessee was a dealer liable to tax.

Analysis: The decisive factors were the manner in which the transactions were reflected in the accounts, the debit of the producers' accounts and credit to the publicity sale account, the absence of any satisfactory explanation that the handling charges represented service remuneration, and the contractual stipulation that bills were to be drawn against the distributor. These circumstances supported the inference that the assessee got the materials printed at its own cost, supplied them to the producers for consideration, and earned profit therefrom. On that basis, the transactions had the character of sales and the assessee fell within the statutory definition of a dealer.

Conclusion: The supply of publicity materials amounted to sales within the meaning of section 2(n) of the Andhra Pradesh General Sales Tax Act, and the assessee was a dealer under section 2(e) of that Act. The finding was against the assessee and in favour of the Revenue.

---