The assessee owns a printing press and supplies printed materials in the shape of envelopes, examination papers, certificates, result sheets, etc. In the assessment year 1972-73, it entered into an agreement with the Madhyamik Shiksha Mandal, Madhya Pradesh, Bhopal, for the supply of examination papers, mark sheets, certificate, etc. , in sealed envelopes and packages. Under the terms of the agreement they were to be prepared in accordance with the needs of each examination centre and were to be packed in sealed envelopes and put in boxes, and despatched to the examination centers notified by the Board. In the event of excess number of examination papers being printed by the assessee they were to be sent in a likewise manner to the Board Office. The agreement further stipulated that till such time that the examinations were over the assessee was to maintain secrecy about the contents of the papers, and in the event of a breach by the assessee he will be liable for damages and imposition of such penalty as the Secretary of the Board might determine. A schedule of rates for payment to the assessee was set out along with the agreement. Under the first heading, charges for composing, proof reading, printing, pasting and other similar operations including cost of paper were specified. Under clauses (c), (d) and (e) of the schedule of rates, prices for the cost of paper required for printing the examination papers, and for craft paper used for packing were detailed. The assessees contention was that the work done was a job-work, and was not liable to tax. He claimed exemption on the turnover of envelopes, craft paper, packages and the printed material including the question papers. The Sales Tax Officer accepted the accounts, but taxed the turnover of envelopes, and the turnover of the printed material and question papers. The revising authority has upheld this view. Counsel for the assessee contended that it was a works contract, and not liable to tax, as although the rates of payment for paper, envelopes, etc. , had been separately specified, but that was only for calculating the total amount payable to the assessee for printing the examination papers, despatching them to the examination centres and thereafter printing the result sheets and certificates, etc. He has particularly placed reliance on the decision of the Kerala High Court in the case of P. T. Varghese v. State of Kerala [1976] 37 STC 171 and on State of Tamil Nadu v. Anandam Viswanathan [1977] 39 STC 226. In the Vargheses case a question arose as to whether the assessee who was running a press and printing bill books, vouchers, receipt books, letter head, question papers and notices, as ordered by his client in which he used his own paper, was doing a works contract, or a contract for sale of paper, and a contract for work and labour involved in printing those materials. It was held that the contract for supply of the aforesaid material was a composite contract, and could not be broken up into one relating to sale of paper and the other for work and labour, and as it was a works contract, its turnover could not be taxed. In Anandams case the assessee had entered into a contract with Universities and other educational institutions for printing question papers. In the quotation the assessee had given separately the charges for printing, block-making, packing and handling and for the cost of paper and packing material. It was held that as the contract was a composite contract for the supply of printed question papers properly packed, it could not be broken up into a contract for sale of paper and for work and labour involved in printing them. These cases clearly support the contention of the assessee.

Sri V. D. Singh, the Learned Standing Counsel, however, referred to the decisions in the cases of Babulal Onkarmal & Co. v. State of Bombay [1964] 15 STC 598, Government of Andhra Pradesh v. Guntur Tobaccos Ltd. [1965] 6 STC 240 (SC), Hyderabad Deccan Cigarette Fa