AI Drafter 
TaxTMI 
TaxTMI 
2010 (1) TMI 1101
X X X X Extracts X X X X
X X X X Extracts X X X X
....goods? 3. Whether the Appellate Tribunal was correct in not appreciating the law that the addition towards the gross profit is unwarranted since the same is included in the cost price of the goods which are transferred or involved in the execution of works contract? 2. The tax case revision arises under the following circumstances as per the version of the petitioner. The revision petitioner (hereinafter referred to as "the assessee") is basically Offset Printers and doing the job work of printing and supplying labels, cartons and drappers for notebooks. The assessee prints and supplies the materials as per the specification, design and general layout of the customers with their name and address predominantly printed. The printed items cannot be sold to any other person in the market. According to the assessee, it undertakes the job only on work contract basis. The customers used to supply papers. The assessee used to purchase pigments, linseed oil and chemicals from dealers both locally and outside the State against 'C' forms and manufactures printing ink. When the ink is used for printing the materials on work contract basis, such ink is consumable one and no transfer of pr....
X X X X Extracts X X X X
X X X X Extracts X X X X
....ed counsel appearing for the assessee and Mr.Haja Naziruddin, learned Special Government Pleader(Taxes) for the revenue. 7. According to the learned counsel for the assessee, there is no transfer of property of ink in the process of printing, as the assessee only prints labels, cartons and notebook wrappers, where the plants, animals, flowers etc., are alone embossed. He would further submit that unless and until there is a transfer of property in goods as defined under Section 2(j) of the TNGST Act, the assessing officer has no power to levy or collect tax on the transaction. 8. On the other hand, the learned Special Government Pleader would submit that the assessee used to purchase pigments and linseed oil against 'C' forms and manufactures printing ink to be used in the execution of job printing. Such printing ink used in the job work had not suffered tax at earlier stage. As the printing is involved in the execution of job printing, it amounts to transfer of property in goods. Hence the invocation of Section 3-B of the TNGST Act is justified. 9. We have carefully given our anxious consideration to the rival submissions. Clause (29A) was inserted to Article 366 of the C....
X X X X Extracts X X X X
X X X X Extracts X X X X
...., delivery or supply of any goods' shall be deemed to be a sale of those goods by the person making the transfer, delivery or supply and a purchase of those goods by the person to whom such transfer, delivery or supply is made. Hence, a transfer of property in goods under sub-clause (b) of clause (29A) is deemed to be a sale of the goods involved in the execution of works contract by the person making the transfer and a purchase of those goods by the person to whom such transfer is made. The object of the new definition introduced in clause (29A) of article 366 of the Constitution is, therefore, to enlarge the scope of 'tax on sale or purchase of goods', wherever, it occurs in the Constitution so that it may include within its scope the transfer, delivery or supply of goods that may take place under any of the transactions referred to in sub-clauses (a) to (f), thereof, wherever, such transfer, delivery or supply becomes subject to levy of sales tax. So construed the expression 'tax on sale or purchase of goods' in entry 54 of the State List, therefore, includes a tax on the transfer of property in goods (whether as goods or in some other form) involved in the execution of a works ....
X X X X Extracts X X X X
X X X X Extracts X X X X
....ove pronouncements in mind, the facts of the present case must be considered. The definition of property in Section 6 of the Transfer of Property Act is wide and includes not a mere transfer of movable property, but would cover a separable form of property as well. The Apex Court in Tata Consultancy Services v. State of Andhra Pradesh, (2001) 122 STC 198 (SC), for the purpose of levy of sales tax on computer software, has held as follows:- "A 'goods' may be a tangible property or an intangible one. It would become goods provided it has the attributes thereof having regard to (a) its utility; (b) capable of being bought and sold; and (c) capable of being transmitted, transferred, delivered, stored and possessed. If a software whether customised or non-customised satisfies these attributes, the same would be goods." 15. The learned counsel for the petitioner-assessee has contended that when once the printing ink is used in the execution of works contract, it would lose the character as a 'good' and thereafter cannot be called within the definition of 'goods' under Section 2(j) of the TNGST Act. In our opinion, the said submission cannot be accepted. The undisputed facts are tha....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... also rely upon another judgment of the Apex Court in Xerox Modicorp Ltd., v. State of Karnataka, (2005) 5 RC 389 to contend as to what is a consumable. That was a case where the Apex Court was considering the case of a dealer entering into maintenance agreement to supply materials like spare parts, toners and developers which were put into the xerox machine. Such toners and developers can be referred to the term 'consumables', as they are used in the execution of works contract so that nothing is left before the property in goods could pass to the buyer. In our opinion, the said judgment is not applicable to the present case, as the toners and developers are used in the course of maintenance of the xerox machine and no transfer of property is effected. Moreover, they had suffered tax already. 18. The learned counsel also relied upon yet another judgment of the Apex Court in Imagic Creative Pvt. Ltd., v. Commissioner of Commercial Taxes and others, (2008) 12 VST 371 (SC). That was a case where the Apex Court was considering the composite contract for advertisement services by creating original concept and design advertisement material for its clients and design brochures, namely....