The High Court · 2025

M/S SRINIVASA LITHO GRAPHICS, Red Hills, Hyderabad ...Petitioner ...Respondent Counsel for the Petitioner : Mr. T. Chaitanya Kiran Assistant Government Pleader representing Mr. Swaroop Oorilla, Special Government Pleader Counsel for the Respondent : Mr. A.V.A. Siva Kartikeya The Court made the following: -..,.-^,\6 ( :,i.] :, THE HONOUITABLE SRI JUSTICE P.SAM KOSTIY ANt) THE HONOURABLE SRI JUSTICE NARSING RAO NANDIKONDA TAX RIMSION CASE No.233 OF 2008 ORDFI,R, lpcr I lctn'hlc Sri Justicc P.Stn Koshv) I{eard Mr. -f. Cliaitanya I(iran, lcarned Assistant Covernmcnt 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 2, The present is a Tax Revision Case preferred by the State Government assailing the order dated 28.07.2008 passed in Tribunal Appeal No.452 ol 2008 by the Sales Tax Appellate Tribunal, Andhra 't 't' Pradesh, Hyderabad (hereinrifter rcfcrrcd as, 'the Tribunal'), ior thet Assessment Year 200 1 -02.

3. 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. 2

4. Upon perusal of the impugned order and the findings given by the Tribunal, we find that the learned Tribunal has extensively dealt with the contentions raised by the respondent assessee while 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 extensively deliberated upon and 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. The learned Tribunal had fortified its view relying upon the judgrnent of the Hon'ble Supreme Court in sirnilar factual backdrop in the case of State of Tamil Nadu v. Anandam Visrvanathanr, wherein, the Hon'ble Supreme Courl in paragraph Nos.25 to 28 has lteld as under: "25. The court has to find out the primary object of the transaction and intention of the parties. ln this connection, it is necessary to rely on the observations of this Cowl in Hinduston Aeronoutics Ltd case (supra)at pages 323.

26. The primary difference bet\reen a contract for work or servace and a contract for sale is that in the former there is in the person performing or rendering service no property in the thing produced as a whole, notwithstanding that a part or even the whole of the material used by him may have been his property. Where the finished product supplied to a particular customer is not a commercial commodity in the sense that it cannot be sold in the market to any other person, the transaction is only a works contract' ' 1rsss1 t scc ot: 3 See the observation in Court Press Job Branch, Solem v. The Stote of Tomil Nadu, dnd CST v. Rotno Fine Arts Printing Press.

27. 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).

28. 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". I ,

5. From the perusal of the afbresaid findings, we flnd that the 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 I t 4 a'l persons who carryout works contract. This itself would establish the fbct that the Departmcnt itsetf, at the flrst instance treated the respondcnt's naturc of wotk to be one falling under works contract'

6. Thc Tax Revision Casc, being devoid of-merits, deserves to be and is accordingty rejected There shall be no order as to costs' Consequently, uriscellaneous petitions pending, if any, shall stand closed Sd/- M. RAMANA KRISHNA JOINT REGISTRAR //TRUE COPY// hd- IION O SEC FFICER To, t. The Sales Tax Appellate Tribunal, Andhra Pradesh, Hyderabad. (With records)

2. One CC to tVlr. Swaroop Oorilla, Advocate [OPUC] 3. One CC to [Vlr. A.V.A. Siva Kartikeya, Advocate [OPUCI 4. Two CD Copies DUPSL lp HIGH COURT DATED:0110712025 ORDER TREVC.No.233 of 2008 ...t1-. ,,.s. 'a:Ll t -s- ,10 stP il[ .J,: o4 -C;ii-$_ * REJECTING THE TAX REVISION CASE 6