Works contract characterization kept printing labour charges outside taxable turnover where customer-supplied paper was used.

Labour charges for printing question papers and court judgments were treated as outside taxable turnover because the arrangement was characterised as a works contract rather than a sale of goods. The Tribunal applied the settled test that the contract must be assessed as a whole by the parties' intention and the substance of the transaction. Since the work was done on paper supplied by customers for remuneration, and the finished product was not treated as a commercial sale, only a contract for work was found. The labour component was therefore not exigible to tax, and the challenge to that view failed.

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Issues: Whether the labour charges for printing of question papers and court judgments under the relevant printing arrangement were liable to tax as part of a sale transaction, or whether the contract was a works contract with the labour charges outside the taxable turnover.

Analysis: The Tribunal had applied the settled test that the nature of the contract must be determined from the transaction as a whole and the intention of the parties. On the admitted facts, the printing work was undertaken on paper supplied by the customers for remuneration, and the finished product was not treated as a commercial sale of goods. The arrangement was therefore characterised as a contract for work, not a contract of sale, and the labour component was not exigible to tax.

Conclusion: The labour charges were not taxable, and the challenge to the Tribunal's view failed.

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