Customised printed materials treated as works contract, not sale, for pre-2002 Central Sales Tax assessment period.

Printed materials manufactured to a customer's specifications were treated as a works contract rather than a taxable sale under the Central Sales Tax regime for the assessment year 1994-1995. The Court applied the earlier Division Bench view that such customised printed labels or materials are not marketable goods sold as such, but transactions dominated by execution of work. It also noted that the extended statutory definition relied on for taxing such transactions came into force only from 11.05.2002, so it could not govern the relevant period. The levy was therefore unsustainable.

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Issues: Whether the supply of printed materials manufactured to a customer's specifications constituted a works contract and not a sale liable to tax under the Central Sales Tax regime for the assessment year 1994-1995.

Analysis: The dispute was governed by the earlier Division Bench decision holding that printed labels or materials prepared to suit a particular customer do not amount to marketable goods sold as such, but form part of a works contract where the dominant nature of the transaction is execution of work. The Court also noted that the extended statutory definition relied upon for taxing such transactions under the Central Sales Tax law came into force only from 11.05.2002, whereas the assessment year in question was 1994-1995. On that footing, the revisional authority could not sustain tax on the impugned transactions.

Conclusion: The transaction was a works contract and not a sale for the relevant period, and the levy under the Central Sales Tax law was unsustainable for the assessment year concerned.

Ratio Decidendi: Printed materials prepared and supplied to meet specific customer requirements, for a period prior to the statutory expansion of the sales definition, are to be treated as works contract transactions and not taxable sales under the Central Sales Tax law.

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