The central legal point established in the judgment is that the amounts received by a printer for job works do not constitute 'turnover' and are not taxable under the Kerala General Sales-tax Act, 1963.

1. These three Original Petitions raise a common question, namely, whether the amounts received by a printer for execution of job works is taxable under the Kerala General Sales-tax Act, 1963 (hereinafter referred to as the Act). The parties are the same in all these cases. The petitioner is a printer and a dealer in certain kinds of stationery articles. Some of the articles which he deals with are text books, exercise books, ledger books, diaries, printed forms required for general purposes etc. He also prints judgments of courts for which the paper is supplied by the petitioner. O. P. Nos. 441 and 931 of 1966 have been filed to quash the orders of final assessments made against the petitioner for the years 1953-64 and 1964-65 respectively. O. P. No. 1450 of 1966 has been filed to quash the notice of provisional assessment and demand made for the year 1965-66. In all these assessments, petitioner claimed, among other things, that the amounts received by him on account of job works and printing of court judgments were not liable to tax under the Act. This claim was rejected as regards job works; while it was allowed as regards printing of judgments. The respondent held that receipts on account of job works fall under item 42 in the I schedule of the Act, and therefore, he assessed the same at 5%. This item reads as follows:

"paper (other than newsprint), card-boards, straw boards, and their products."

The goods falling under item 42 are taxable at 5 % at the point of first sale in the State. The orders of assessment are sought to be quashed on the only ground that they levy tax on amounts received for the execution of job works. The petitioner's contention is that the execution of job works does not involve 'sale' of goods, and the amounts received thereby do not constitute 'turnover' as defined in the Act.

2. The execution of job works by a printer is of two kinds. One is that the customer gives to the printer the matter to be printed, and also the requisite paper. The printer executes the work and receives the charges for the same. The second kind is that the customer gives to the printer the matter to be printed; and the printer uses his own paper or buys paper for the printing, and gives the matter printed to the customer on such paper. The printer may bill the cost of paper and the charges for printing separately, or he may bill both items jointly. In either case, it makes no difference on the true character of the

transaction. What he receives from the customer is the cost of the paper plus the charges for the printing. It is the substance of the transaction that matters and not the form in which it is done.

The form may be helpful in determining the nature of the transaction. In the case of a consolidated bill, the cost of paper and the charges for the printing have to be determined separately, if need arises. This is what is being done, and it is an accepted mode of determining the taxable turnover, when goods exempted from sales-tax are sold in valuable containers under a consolidated bill, or when the goods sold together with their containers under a consolidated bill are subject to different rates of sales-tax. "Paper" falls under item 42 of schedule I to the Act; and it is taxable only at the point of first sale in the State. Admittedly, the petitioner in this case is not an importer or manufacturer of paper, and the sales by him are not the first sales in the State. So, in the case of job works, whether it may be of the first kind or of the second kind, the only question is whether the charges received by a printer for printing are taxable under the Act. Sub-section (xxi) of S.2 of the Act defines "sale" as follows:

It "sale" with all its grammatical variations and cognate expressions means every transfer of property in goods by one person to another in the course of trade or business for cash or for deferred payment or other valuable consideration, but does not include a mortgage, hypothecation, charge or