Exempt treatment for textbook title covers upheld where the covers were integral to the book and not separately marketable.

Printed title covers made exclusively for nationally prescribed textbooks, to the educational authority's specifications and without independent marketability, were treated as part of the books rather than as standalone printed material. The reasoning was that a book is incomplete without its cover and that the cover identifies and completes the textbook as a whole. On that basis, the covers inherited the exempt character of books and did not fall under the taxable entry for printed material.

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Issues: Whether title covers printed under a contract for nationally prescribed textbooks are to be treated as part of the books and exempt under the entry for books, or as taxable printed material under the relevant schedule entry.

Analysis: The title covers were printed strictly to the specifications of the educational authority, were earmarked only for the prescribed textbooks, and could not be sold in the open market. The supply was thus confined to the textbook production process and was not an independent commercial sale. The reasoning adopted was that a book is not complete without its cover and that the cover serves to identify and complete the textbook as a whole. On that basis, the title cover was treated as inseparable from the textbook and not as standalone printed matter liable to tax under the entry for printed materials.

Conclusion: The title covers were held to fall within the exemption for books and not to be taxable as printed material.

Final Conclusion: The revisionist succeeded, the Tribunal's order was set aside, and the revisions were allowed.

Ratio Decidendi: Where printed material is produced exclusively as the title cover of a textbook under a restricted contract and is not independently marketable, it is an integral part of the book and shares the book's exempt character.

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