Contracts for work and labour are not subject to sales tax, while contracts for sale are taxable.

1. The question raised in this original petition has to be resolved on a consideration whether four items of turnover relating to (a) printing of the judgments of the court, (b) printing of letter heads, (c) binding of books and (d) supply of forms, totalling to Rs. 18,490.30 nP. is taxable or not. The assessing authority in the first instance exempted the turnover relating to the transactions. But the Deputy Commissioner purporting to act under S.12(2) of the Madras General Sales Tax Act suo motu revised the original order of assessment and directed a de novo enquiry which resulted in Ext. P-1 order wherein the exemptions claimed have been negatived.

2. Counsel for the petitioner raised two points before me. According to him, the Deputy Commissioner had no jurisdiction to revise the first order of assessment suo mote. He relies on the decision of the Supreme Court in State of Kerala v. Appukutty (1963 KLJ 432). I do not think that decision has any application. The revision in this case was not in relation to escaped turnover. It appears to me that the revisional authority was considering the legality of the order. He is entitled to do so.

3. Secondly he contended that the turnover relating to the four items mentioned above are not turnovers pertaining to sales and he mainly relied on the decision of the Andhra Pradesh High Court reported in Guntur Tobaccos Limited v. Government of Andhra (1961 II Andhra W. R.37 = XII STC. 668. That is a Full Bench decision and if I may so with respect, there is a clear enunciation of the law relating to this subject in the judgment. The learned judge said:

"There can be three types of contract: for work and labour simply, a mixed contract of labour and materials, and, another for goods sold and delivered."

The querry in those type of cases is under which of the above heads a particular transaction falls. If it falls under one or three specified above, the matter is simple. But if it falls under two, the question raises difficulties and the view taken by the Andhra High Court in the above decision is,

"The question is whether the work and labour is of the essence of the contract or whether it is the materials that are supplied".

Applying the above principle it is clear that the contract in the cases of printing of letter heads, binding of books and supply of journal forms are contracts for sale. But it seems to me impossible to say that the contract for printing judgments of court is a contract for sale. It appears to me that this is a contract for work and labour. I therefore hold that the imposition of sales tax on the turnover relating to the printing of judgments of court is unwarranted. I quash Ex. P-1 order to that extent and direct the first respondent to reassess and fix the tax payable by the petitioner in the light of what is stated above. There will be no order as to costs.