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of <h1>High Court Rules Supply of Printed Receipt Books to Electricity Board a Works Contract</h1> The High Court determined that the supply of specially designed, printed receipt books to Madhya Pradesh Electricity Board by the applicant constituted a ... - Issues Involved:1. Whether the supply of printed material to Madhya Pradesh Electricity Board (MPEB) by the applicant was a sale or a works contract.Summary:Issue 1: Nature of the Transaction - Sale or Works ContractThe High Court was called upon to determine if the supply of specially designed, printed receipt books to MPEB by the applicant constituted a sale or a works contract. The applicant, M/s. Sarvodaya Printing Press, filed an application u/s 52(1)(c) of the Bombay Sales Tax Act, 1959, seeking advance determination on the applicability of sales tax to this transaction. The Deputy Commissioner of Sales Tax initially held it to be a works contract, not liable to sales tax. However, the Commissioner of Sales Tax and subsequently the Tribunal held it to be a sale of goods. The matter was referred to the High Court u/s 61(1).Key Findings:1. Nature of Job Work: The applicant runs a printing press that performs only job-work and does not keep ready stock of materials. The receipt books were specially designed for MPEB and had no commercial value to anyone else. 2. Intention of Parties: The principal object of MPEB was to get the material printed, not to purchase printed material. The charges were composite, and the applicant was prohibited from selling the books to anyone else.3. Property Transfer: Although the property in the goods used passed to MPEB, it was incidental to the contract of printing. No transfer of chattel qua chattel was involved.4. Marketability: The receipt books had no marketable value and were of no use to anyone else. Excess materials had to be destroyed.Legal Precedents:1. State of Tamil Nadu v. Anandam Viswanathan [1989] 73 STC 1: The Supreme Court held that the transaction was a works contract, not a sale, as the primary intent was to get the material printed, and the supply of paper was incidental.2. State of Madras v. Gannon Dunkerley & Co. (Madras) Ltd. [1958] 9 STC 353: The Supreme Court observed that in a building contract, there is no sale of goods, and it is not within the competence of the Provincial Legislature to impose a tax on the supply of materials used in such a contract.3. Assistant Sales Tax Officer v. B.C. Kame [1977] 39 STC 237 (SC): The Supreme Court held that the contract for photographic work was a works contract, not a sale, despite the involvement of material supply.4. Hindustan Aeronautics Ltd. v. State of Karnataka [1984] 55 STC 314 (SC): The Supreme Court differentiated between a contract of service and a contract for sale of goods, emphasizing the intention of the parties and the nature of the transaction.Conclusion:The High Court concluded that the supply in question was not a sale but a works contract, thus not subject to sales tax. The question was answered in the negative and in favor of the applicant. No order as to costs.
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