P.G. Agarwal, J.
1. Heard Mr. B.K. Sharma, learned senior counsel for the petitioners and Mr. B.J. Talukdar, learned Government Advocate.
2. Petitioner No. 1is an Association of the Press Owners of Assam and in this writ petition, they have challenged the validity of Entry No. 30 of Schedule VI under Section 8(1)(e) of the Assam General Sales Tax Act, 1993, for short, the Act, whereby the sales tax has been imposed on job printing.
3. The case of the petitioner is that prior to the coming into force of the Act, that is, on 1.7.1993, there was no provision of imposition of sales tax on the Press Owners of Assam. However, in view of the definition of works contract, sales tax was made leviable Under Section 8(1)(e) of the Act as stated above. The main grievance of the petitioner is that in the process of printing works, there is no transfer of property in goods. It is submitted that generally besides other materials used in printing works, the paper which is generally is supplied by the persons placing the order. Paper even if supplied by the printing press under the Act, is not to be taxed again as under the provisions of the Act, the paper is taxable at the first point of sale only and there is no scope for taxing the same again. The petitioners have also challenged the enhancement of the rate of tax which was originally two paise in the rupees but subsequently it was increased to eight paise in the rupee. The enhancement of the rate of tax is within the legislative competence of the State and hence, it can not be challenged as such. The question on which we are concerned is whether the job works of printing is liable to be taxed under the provisions of the Act and in view of the provisions of Article 286 of the Constitution. The Apex Court had considered the question in the case of photographer in taking photographs and supplying prints as held in the case of the Assistant Sales Tax Officer and Ors. v. B.C. Kame, Proprietor Kame Photo Studio, reported in (1977) 1 SCC 634 wherein the Apex Court in para-6 observed as follows :-
'Thus, in considering whether a transaction falls within the purview of sales tax, it becomes necessary at the threshold to determine the nature of the contract involved in such a transaction for the purpose of ascertaining whether it constitutes a contract of sale or a contract of work or service. If it is of the latter kind it obviously would not attract the tax. From the decisions earlier cited it clearly emerges that such determination depends in each case upon its facts and circumstances. Mere passing of property in an article or commodity during the course of the performance of the transaction in question does not render it a transaction of sale. For, even in a contract purely of work or service, it is possible that articles may have to be used by the person executing the work and property in such articles or materials may pass to the other party. That would not necessarily convert the contract into one of sale of those materials. In every case the could would have to find out what was the primary object of the transaction and the intention of the parties while entering into it. It may in some case be that even while entering into a contract of work or even service, parties might enter into separate agreements one of work and service and the other of sale and purchase of materials to be used in the course of executing the work or performing the service. But, then in such cases the transaction would not be one and indivisible, but would fall into two separate agreements, one of work or service and the other of sale.'
4. After the amendment of Article 366 (46th Constitutional Amendment) in the case of Rainbow Colour Lab and Anr. v. State of Madhya Pradesh and Ors., reported in AIR 2000 Supreme Court 808, the Apex Court in para-15 observed as follows :-
'15. Thus, it is clear that unless there is sale and purchase of goods, either in fact or deemed, and which sale is primarily intended and not incidental to the contract, the State cannot impose sales-tax on a works contract simpliciter in the guise of the expanded definition found in Article 366(29)(A)(b)) read with Section 2(n) of the State Act. On facts as we have noticed that the work done by the photographer which as held by this Court in Kame's case (AIR 1977 SC 1642) (supra), is only in the nature of a service contract not involving any sale of goods, we are of the opinion that the stand taken by the respondent State cannot be sustained.'
5. The decision in the case of Rainbow Colour Lab and Anr. (supra) was followed by this court in the case of New Frontier Colour Laboratories Pvt. Ltd and Anr. v. Commissioner of Taxes and Ors., reported in 2003 (1) GLT 275. Mr. B.K. Sharma, learned senior Advocate submits that job-works of printing press and job print of photographers are more or less identical and in support of his submission, he has referred to a decision of the Full Bench of the Bombay High Court in the case of Sarvodaya Printing Press v. State of Maharashtra, reported in 93 STC 387, wherein it was held as follows :-
'Held, that having regard to the special type of job-work done and other basic circumstances, the supply represented a works contract. The intention of the parties was material and it was obvious. The principal object of the MPEB was to get the material printed and not to purchase printed materials. The charge are composite. The books were specially desingedj for the MPEB as per its specification to size, type, colour, format, background, etc. No space was left blank obviously because the books were valuable and upon misuse could cause terrible loss to the MPEB. Under the contract the applicant could not retain or use the printed books and the excess, if any, had to be destroyed. Although the paper and ink used were property of the applicant before printing thereafter they became the property of the MPEB by theory of accretion. The passing of property in the goods used to the MPEB was, by the very nature of thing only incidental or ancillary to the contract printing. No transfer of chattel qua chattel was involved. The work done was composite or indivisible with separate charges for the material. The applicant was responsible for protecting the goods and preventing them from falling into the hands of third parties. The goods were not standard goods and were not capable of any use to any one else and thus had no commercial value. Material could not be used even as scrap if rejected and had to be destroyed. Therefore, the supply of printed material to the MPEB by the applicant was not a sale but a works contract. (See pp. 38911-3900)
State of Tamil Nadu v. Anandam Viswanathan (1989) 73 STC 1 (SC) followed.'
6. The matter was taken to the Apex Court in Civil Appeal No. 919 of 1995 wherein the Apex Court held as follows :-
'The judgment of the Maharashtra Sales Tax Tribunal is not before us, but we find the facts found stated in its order on the reference application. They are that the respondent ran a printing press at Nagpur wherein it carried on printing work for its customers. The respondent entered into an agreement with the Madhya Pradesh Electricity Board for the supply of 'revenue money receipt books' at the rate of Rs. 8.88 per receipt book. The judgment of the High Court shows that only job work was done in the respondent's printing press and that the charge for the supply of the receipt books was of composite nature. The judgment states that the paper and ink used were the property of the respondent before printing but thereafter they became the property of the Board; while the property in these methods passed to the Board, this was, in the very nature of things, only incidental or ancillary to the contract of printing. The High Court laid stress on this Court's judgment in State of Tamil Nadu v. Anandam Viswanathan (1973 STC 1) where the printing and supply of question papers to a University was involved. This Court held that though there was sale of paper and ink, it was merely incidental. It was not a case of sale but a works contract having regard to the nature of the job to be done. Following this judgment, the High Court held that there was no sale.
Having regard to the fact as found, we do not see any error in the conclusion of the High Court. Accordingly, we dismiss the appeal with no order as to costs.'
7. In view of what has been stated above, we hold that the work of job printing is not liable for imposition of sales tax under the Act and Entry No. 30 of Schedule VI of the Act so far it related to the job work of printing press is concerned, stands excluded/exempted from tax. The writ petition stands allowed. Assessment made, if any, pursuant to such Entry in respect of job work of printing stands quashed.