The Sales Tax Appellate Tribunal Vs M/S.Srinivasa Litho Graphics

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134471

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IN THE HIGH COURT FOR THE STATE OF TELANGANA AT HYDERABAD

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TUESDAY, THE FIRST DAY OF JULY TWO THOUSAND AND TWENTY FIVE

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PRESENT

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THE HONOURABLE SRI JUSTICE P,SAM KOSHY AND THE HONOURABLE SRI JUSTICE NARSING RAO NANDIKONDA

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TAx REVISION CASE NO: 233 OF 2008

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Tax Revision case filed Uls 22(1) RAIV Rule 10 of APGST^Rules U/s^APGST ACT against the order dt.28.07.2008^passed in Tribunal Appeal No. 452 of^{2008 on} the file of the Sales Tax Appellate Tribunal,^{Andhra Pradesh, Hyderabad for the} assessment year 2001 -2002.

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Between:

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The State of Andhra Pradesh, rep by the State^{Representative beforeSTAT} O/o.D.No.5-4-404 to 408, Nampally, Andhra Pradesh, Hyderabad.

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...Petitioner

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AND

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M/S SRINIVASA LITHO GRAPHICS, Red Hills, Hyderabad

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...Respondent

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Counsel for the Petitioner : Mr. T. Chaitanya Kiran Assistant^Government Pleader representing Mr. Swaroop Oorilla, Special Government Pleader

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Counsel for the Respondent : Mr. A.V.A. Siva Kartikeya

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The Court made the following:

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-..,.-^,\6 ( :,i.]^:,

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THE HONOUITABLE SRI JUSTICE P.SAM KOSTIY ANt) THE HONOURABLE SRI JUSTICE NARSING RAO NANDIKONDA

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TAX RIMSION CASE No.233 OF 2008

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ORDFI,R, lpcr I lctn'hlc Sri Justicc P.Stn Koshv)

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I{eard Mr.^-f. Cliaitanya I(iran, lcarned Assistant Covernmcnt

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Plcader rellresenting Mr. Swaroop Oorilla, learned Special Covernment l'leader, appearing 1br the petitioner and ]{r. A.V.A Siva Kartikeya, learned counsel for the respondent. Perused thc record

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2, The^present is a Tax Revision Case preferred by the State Government assailing the order dated 28.07.2008 passed in Tribunal 't 't' Appeal No.452 ol 2008 by the Sales Tax Appellate Tribunal, Andhra Pradesh, Hyderabad (hereinrifter rcfcrrcd as, 'the Tribunal'), ior thet Assessment Year 200 1 -02.

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Thc cluestion of law raised by thc petitioner by assailing tlie order of the Tribunal was whether the nature of work executed by the petitioner in the br.rsiness of printing to be treated as a wor.ks contract or as an outright sale.

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Upon perusal of the impugned order and the^{findings given by} the Tribunal, we find that the learned^{Tribunalhasextensivelydealt} with the contentions raised by the^{respondentassesseewhile} challenging the order passed by the revisior.ral^{authority-Deputy} Comrnissioner (CT) IJyderabad. It has been also^{reflected that the} stand taken by the revenue was also^{extensivelydeliberated uponand} discussed in the course of^passing o{^{the order and it has been held} that thc nature of work executed by the^{respondents is in fact works} contract and not an outright sale.^{Thelearned Tribunalhad fortified} its view relying upon the^{judgrnentof the Hon'ble SupremeCourtin} sirnilar factual backdrop in^{the case} of^{State of TamilNadu v.} Anandam Visrvanathanr, wherein,^{the Hon'ble SupremeCourl in} paragraph Nos.25 to 28 has lteld as under:

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"25. The court has to find out the^{primary object of the transaction} and intention of the^{parties. ln this connection, it is necessaryto rely} on the observations of this^{Cowlin Hinduston AeronouticsLtd case} (supra)at pages 323.

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The primary difference bet\reen^{a contractfor work or servace} and a contract for sale is that^{in the former thereis in theperson} performing or rendering service no^property in the^{thingproducedas} a whole, notwithstanding that a^part or^{eventhe wholeof the} material used by him may have been his^{property. Wherethe} finished product supplied to a^particular customer^{is not a} commercial commodity in the sense that it^{cannotbe soldin the} market to any other^person, the transaction^{is only a workscontract'}

' 1rsss1^{t scc ot:}

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See the observation in Court Press Job Branch, Solem v. The Stote of Tomil Nadu, dnd CST v. Rotno Fine Arts Printing Press.

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ln out opinion, in each case the nature of the contract and the transaction must be found out. And this is possible only when the intention of the parties is found out. The fact that in the execu[ion of a contract for work some materials are used and the property/goods so used, passes to the other party, the contractor undertaking to do the work will not necessarily be deemed, on that account, to sell the materials. Whether or not and which part of the^job work reiates to that depends as mentioned hereinbefore, on the nature of the transaction. A contract for work in the execution of which goods are used may take any one of the three forms as mentioned by this Court in The Government of Andhro Prodesh v. Guntur Toboccos (su pra).

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,

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ln our opinion, the contract in this case is one, having regard to the nature of the^job to be done and the confidence reposed, for work to be done for remuneration and supply of paper was^just incidental. Hence, the entire price for the printed question papers would have been entitled to be excluded from the taxable turnover, but since in the instant case the deemed notes prepared by the assessee showed the costs of paper separately, it appears that it has treated the supply of paper separately. Except the materials supplied on the basis of such contract, the contract will continue to be a contract for work and labour and no liability to sales tax would arise in respect thereof. The High Court was, therefore. riBht in the view it took in Civil Appeals Nos. 2346-2347 of L97a".

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From the perusal of the afbresaid findings, we flnd that the

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objections and contentions raised by the petitioner herein also having been considered and decided by the Tribunal.^'l'herefore, we do not find any substantial ground made out by the petitioner calling for interference to the impugned order. Another reason wh1, we do not find any force in tlie arguments of the petitioner is that the Department itself had issued Fonn 'L1' for the purpose of cornputation of tax and Form 'Ll, is one which is issued to the

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a'l

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persons who carryout works^{contract. This itself wouldestablish the} fbct that the Departmcnt^{itsetf, at the flrst instance treated the}

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respondcnt's naturc of^{wotk to be one fallingunderworks contract'}

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