Works contract treatment for printed material prepared to order excluded sales tax on the transaction.

Printed material prepared to customer order, with paper and printing billed separately, was treated as involving two distinct components: a sale of paper and a printing activity. Because the finished material was produced only for the ordering customers and was not regarded as an independent sale of goods on these facts, the transaction was characterised as a works contract rather than a taxable sale. The printed material therefore was not liable to sales tax, and the revision was rejected.

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Issues: Whether the supply of printed material prepared on customers' orders, with separate billing for paper and printing, amounted to a sale liable to sales tax or a works contract not exigible to tax.

Analysis: The transaction was found to consist of two distinct components, namely, sale of paper and printing activity, each covered by separate vouchers and separately charged. The printed material was prepared only for the ordering customers and was not treated as an independent sale of goods in the circumstances of the case. On these facts, the supply was characterised as a works contract rather than a taxable sale.

Conclusion: The printed material supplied by the assessee did not amount to a sale and was not liable to sales tax. The revision was therefore rejected.

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