Court rules printed material supply not subject to sales tax due to customized production and lack of market value.

The High Court dismissed the Tax Case Revisions filed by the Revenue, ruling that the supply of printed materials by the assessee did not attract sales tax. Emphasizing the absence of market value for the materials and the customized production for specific customers, the Court held that the transaction constituted work and labor exempt from sales tax, following the precedent established in a previous case. No costs were awarded in this decision.

---

---

Issues:
1. Whether sales tax is payable on the supply of printed materials printed by the assessee on orders from customers without ascertaining the dominant intention of the partiesRs.
2. Whether the printed materials supplied by the assessee, having no commercial value in the open market, constitute transactions of work and labor exempt from sales taxRs.

Analysis:

1. The Tax Case Revisions were filed by the Revenue against the Tamilnadu Sales Tax Appellate Tribunal's order for the assessment years 1983-84 and 1987-88. The substantial questions of law admitted for consideration were related to the liability of sales tax on the supply of printed materials based on the dominant intention of the parties involved in the transaction.

2. The Court referenced a previous decision in the case of STATE OF T.N. v. PREMIER LITHO WORKS, where it was held that the supply of labels with printed particulars, tailored to a specific customer's needs, did not constitute a sale for tax assessment purposes. The Court emphasized that the labels themselves had no market value and were not intended for general sale, highlighting the importance of the dominant intention behind the transaction.

3. The assessee, a dealer in printing materials, had their sales assessed by the Assessing Authority. Upon appeal to the Appellate Assistant Commissioner, the order of assessment was set aside in favor of the assessee. Subsequently, the Revenue appealed to the Tamil Nadu Tax Appellate Tribunal, which upheld the decision of the Appellate Assistant Commissioner. The Revenue then brought the matter before the High Court for further review.

4. Citing the precedent set in the earlier case, the High Court determined that the transaction involving the supply of printed materials by the assessee could not be subjected to sales tax. The Court reiterated that the absence of market value for the materials and the focus on customized production for specific customers indicated a nature of work and labor rather than a sale transaction.

5. Consequently, the High Court dismissed the Tax Case Revisions filed by the Revenue, emphasizing that the transaction in question did not warrant tax assessment. No costs were awarded in this matter.

---