Works contract tax on printing ink upheld as part of the goods component transferred in execution.

After the Forty-Sixth Amendment and insertion of Article 366(29-A), a works contract is divisible into goods and service elements, and tax is attracted on the transfer of property in goods involved in execution. The dominant intention test no longer controls the levy. Applying that constitutional position, printing ink used in printing polythene rolls was treated as part of the goods component transferred in the works contract, not as a mere consumable escaping tax. Earlier contrary rulings were regarded as inconsistent with the settled law and overruled to that extent. The purchase and use of ink for printing was therefore held taxable under Section 3-B of the Tamil Nadu General Sales Tax Act, 1959.

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Issues: Whether ink purchased and used for printing polythene rolls in the course of a works contract is taxable under Section 3-B of the Tamil Nadu General Sales Tax Act, 1959.

Analysis: After the Forty-Sixth Amendment and insertion of Article 366(29-A), a works contract is legally divisible into a sale element and a service element. The taxable part is the transfer of property in goods involved in execution of the works contract, and the dominant intention test no longer governs the levy. On the authorities examined, printing ink used in the execution of the printing job is not a mere consumable escaping tax; it forms part of the goods component transferred in the works contract. Earlier decisions taking a contrary view were held to be inconsistent with the settled constitutional position and were overruled to the extent they suggested otherwise.

Conclusion: The purchase and use of ink for printing is exigible to tax under Section 3-B of the Tamil Nadu General Sales Tax Act, 1959, and the challenge to the assessment fails.

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