1 BEFORE THE MADURAI BENCH OF MADRAS HIGH COURT DATED: 23.03.2011 CORAM: THE HONOURABLE MS.JUSTICE K.SUGUNA AND THE HONOURABLE MR.JUSTICE A.ARUMUGHASWAMY W.A.(MD).Nos.158 and 330 of 2011 and M.P.Nos.1 and 1 of 2011 The State of Tamil Nadu, Represented by Deputy Commissioner (CT), Tirunelveli Division, Tirunelveli. : Appellant in both Writ Appeals Vs. 1.Tvl.Kavitha Offset Printers, 12/H, AVT South Street, Sivakasi, Virudhunagar District. 2.The Secretary, The Tamil Nadu Sales Tax Appellate Tribunal, (Additional Bench), Madurai 20. : Respondents in W.A.(MD).No.158 2011 1.Tvl.Sahadevan Offset Printers, 42/A, Velayutha Rastha Road, Sivakasi, Virudhunagar District. 2.The Secretary, The Tamil Nadu Sales Tax Appellate Tribunal, (Additional Bench), Madurai 20. : Respondents in W.A.(MD).No.330 2011 PRAYER: Writ Appeals are filed under Clause 15 of the Letters Patent against the Order dated 08.06.2007 made in W.P.(MD).Nos.3771 and 3922 of 2004 respectively on the file of this Court. Petitions under Section 226 of Constitution of India to issue a Writ of Certiorari calling for the records of the second respondent the Tamil Nadu Sales Appellate Tribunal (Additional Bench), Madurai relating to its order made in MTSA.No.543 of 2000, dated 26.02.2001, MTSA.No.353 of 1999 dated 6.1.2000 respectively and quash the same. For Appellant : Mr.S.C.Herold Singh in both Appeals Government Advocate For Respondent 1: Mr.R.D.Ganesan in both Appeals https://hcservices.ecourts.gov.in/hcservices/ 2 COMMON JUDGMENT *********************** [Common Judgment of the Court was delivered BY K.SUGUNA, J] These Writ Appeals have been filed as against the order dated 08.06.2007 passed in W.P.(MD).Nos.3771 and 3922 of 2004. 2. The facts of the case are as follows:- The first respondents herein reported total and taxable turn over of Rs.71,68,102/- and Rs.39,50,084/- and Rs.36,50,084/- respectively and claimed exemption for the transaction relating to the works contract. The Assessing Authority, after checking all the accounts, had rejected the claim and framed the assessment by treating the entire turnover as taxable out – right sale under the Act. (ii). Challenging the said order, the assessee/first respondents had preferred appeals in AP.CST.Nos.144 of 1996 and 72 of 1994 before the Appellate Assistant Commissioner. By order dated 19.01.1998, the Appellate Assistant Commissioner, in AP.CST.No.144 of 1996, had remanded the matter to the Assessing Authority to assess the transaction as "works contract" after observing the procedure. By order dated 06.10.1997, in AP.CST.No.72 of 1994, the Appellate Assistant Commissioner, had remanded the matter with regard to the transaction of printed labels and allowed the appeal with regard to the reading books and confirmed the order of the Assessing Authority with regard to the export sales. (iii). Aggrieved over the same, the appellant herein had filed appeals before the Tamil Nadu Sales Tax Appellate Tribunal. By orders dated 26.02.2011 and 06.01.2000, the Appellate Tribunal had dismissed the said appeals, thereby confirming the orders passed by the Appellate Assistant Commissioner. (iv). Challenging the above orders, the appellant herein had filed W.P.(MD).Nos.3771 and 3922 of 2004. The learned Single Judge of this Court, by orders dated 08.06.2007, had dismissed the said Writ Petitions and confirmed the above orders passed by the Appellate Assistant Commissioner (CT), Virudhunagar and the Tamil Nadu Sales tax Appellate Tribunal, (Additional Bench), Madurai. (v). As against the said order dated 08.06.2007, the present Writ Appeals have been filed by the appellant – State. 3. According to the learned Government Advocate appearing for the appellant – State, as per the settled principles, printed labels have to be treated as "works contract" and if no materials have been placed by the customer, who has placed an order, then it has to be treated as a "out – right sale" and not as "works contract". According to the learned Government Advocate, as far as the case in hand is concerned, as per the orders of the Tamil Nadu Sales Tax Appellate Tribunal, the burden lies on the appellant to prove, since no materials have been placed by the customer, who has placed order, so as to treat the same as "outright sale". Relying on Section 10 of the Tamil Nadu General Sales Tax Act, 1959, it is the stand of the learned Government Advocate that the burden lies only on the assessee and not on the appellant – State. When an order of assessment has been made treating the entire turnover as taxable as out – right sale under the Act, both the Appellate Assistant Commissioner (CT), Virudhunagar and the Tamil Nadu Sales tax Appellate Tribunal, https://hcservices.ecourts.gov.in/hcservices/ 3 (Additional Bench), Madurai, without giving any finding as to how it can be treated as "works contract" and also without giving any finding with regard to the fact as to whether materials have been placed by the customer, who has placed an order or the assessee himself has used his own materials, have come to the conclusion that it has be to treated as "works contract". 4. On the other hand, it is the stand of the learned counsel appearing for the first respondent that as far as the printed labels are concerned, it can be sold only to the customer, who has placed an order and not in the open market and there cannot be any general sale for the same, consequently, according to the learned counsel for the first respondents, this has to be treated only as "works contract", irrespective of the fact as to whether materials have been placed by the customer, who has placed order or the assessee himself has used his own materials. 5. In support of his contention, the learned counsel for the first respondents has relied on a Judgment of a Division Bench of this Court in the State of Tamil Nadu vs. Premier Litho Works and another reported in 2009 (26) VST 205. Apart from this, according to the learned counsel for the first respondents, as far as the issue in question is concerned, the work undertaken by the first respondents to print labels and calendars, which are not saleable in open market, should be considered as "works contract" and the same can be supplied only to the specific customer, who has placed orders, consequently, according to the learned counsel for the first respondents, irrespective of the fact of supply of materials, this has to be treated only as "works contract" and not as "out – right sale". 6. We have considered the above submissions made by the learned counsel on either side. 7. Admittedly, there is no whisper in the Judgment relied on by the learned counsel for the first respondents to the effect that though irrespective of the fact of supply of materials by the customer, who has placed order or the assessee himself has used his own materials, if they are printed labels or calendars, it has to be treated as "works contract". However, no other Judgment is brought to our notice by the learned counsel for the first respondents in support of the stand taken by him. A perusal of the orders passed by the Appellate Assistant Commissioner (CT), Virudhunagar as well as the order passed by the Tamil Nadu Sales tax Appellate Tribunal, (Additional Bench), Madurai, reveals that in the said orders, there is no finding with regard to this, and therefore, we are of the considered view that a portion of the order i.e., to treat the transaction as "works contract", passed by the Appellate Assistant Commissioner (CT), Virudhunagar, which was confirmed by the Tamil Nadu Sales tax Appellate Tribunal, (Additional Bench), Madurai, has to be set aside. 8. Accordingly, the order dated 08.06.2007 made in W.P.(MD).Nos.3771 and 3922 of 2004 is set aside, consequently, the orders dated 19.01.1998 and 06.01.2000, insofar as they relate to a portion i.e., "to assess the transaction as "works contract", which was confirmed by the Sales Tax Appellate Tribunal, are set aside and the Assessing Authority is directed to decide the issue as to whether the transaction has to be treated as https://hcservices.ecourts.gov.in/hcservices/ 4 "works contract" or as "out – right sale" basing on the fact as to whether the materials have been supplied by the customer, who has placed order or the assessee himself has used his own materials. 9. These Writ Appeals are disposed of in the above terms. No costs. Consequently, connected Miscellaneous Petitions are closed. Sd/- 23/03/2011 This Appeal having been posted on this day ie., on 29.3.11 for Being Mentioned in pursuance of the order dated 23.03.2011 and made herein in the presence of the aforesaid Advocate, the Court made the following order:- By Judgment dated 23.03.2011, these Writ Appeals were disposed of. Today, these Writ Appeals are listed under the caption For Being Mentioned, since according to the learned counsel for the first respondents, there are Judgments of the Hon'ble Apex Court to the issue in question. 2. In view of the above submission made, the first respondents are at liberty to cite all the Judgments before the Assessing Authority, who shall consider the same and take a decision as to whether the transaction has to be treated as "works contract" or as "out – right sale", as indicated in the Judgment dated 23.03.2011 and basing on the same, the assessment order has to be passed. 3. The Judgment dated 23.03.2011 made in W.A(MD).Nos.158 and 330 of 2011 is clarified accordingly. Sd/- Assistant Registrar (C.O) /True copy/ Sub Assistant Registrar (C.S) To 1. The Deputy Commissioner (CT), The State of Tamil Nadu, Tirunelveli Division, Tirunelveli. 2. The Secretary, The Tamil Nadu Sales Tax Appellate Tribunal, (Additional Bench), Madurai 20. + 2 ccs to Mr.R.D.Ganesan, Advocate, SR No.11876, 11877 + 1 cc to The Special Government Pleader, SR No.7802 W.A(MD).Nos.158 and 330 of 2011 29.03.2011 NB RJ/9.6.11 4p/6c https://hcservices.ecourts.gov.in/hcservices/