KWICK STATIONERY MART BOMBAY Vs. STATE OF MAHARASHTRA
LAWS(BOM)-1962-4-15
HIGH COURT OF BOMBAY
Decided on April 25,1962

KWICK STATIONERY MART, BOMBAY Appellant
VERSUS
STATE OF MAHARASHTRA Respondents

JUDGEMENT

Desai, J. - (1.)The questions, which are referred to us on this reference, arise out of the transaction of the supply of printed posters by the petitioners to their customers. The petitioners are dealers in stationery materials and publicity printers. They have no printing press of their own and get the printing work relating to the order received by them by other printing presses. The petitioners received orders from their customers for the supply of publicity posters. The petitioners were to supply the paper for the posters. They were also to prepare the designs for the printing according to the instructions of their customers and had to get the printing work done on the posters, which they got executed by other printing presses after paying the charges for the work done. The petitioners issued to the customers separate bills in respect of each of their orders for posters : one for the sale of the paper required for the posters and the other for charges for work, labour and skill. In the relevant assessment period in the present case, the petitioners had collected form their customers, apart from the price of the paper supplied, a total amount of Rs. 34,126-15-0 for work and labour charges which also included charges for their skill. At the time of the assessment, the petitioners contended that the said amount of Rs. 34,126-15-0 could not be included in their turnover liable to tax since it did not constitute the price of goods sold by them. This contention was not accepted by the Sales Tax Officer. In his view that petitioners had sold ready-made posters and the entire amount which they had charged to their customers which included the price of the paper, work and labour charges, constituted the price of the completed posters, which were sold by the petitioners. The petitioners went in revision to the Additional Collector to Sales Tax who upheld the decision of the Sales Tax Officer. According to him the separate bills which the petitioners had given to this customers, one for the paper and the other for the printing charges, were prepared by them simultaneously either at the time of the supply of the printed posters or thereafter and in his view it was an attempt on the part of the petitioners to disguise the real nature of the transaction. The confirmatory letters which the petitioners had produced in support of their case were ignored by him on the ground that they had no evidentiary value. He found that the printers' bills which had been submitted by the printers for the printing work done by them to the petitioners showed that the printing work was done on the paper, which vested in the petitioners and not in the customers of the petitioners. This showed, according to the Additional Collector, that the property in the papers had not passed to the customers before the printing was done on the paper. He pointed out that no stock book was maintained by the petitioners and although it was stated on behalf off the petitioners that paper was supplied to the printers under delivery challans no such challans had been produced by them. In the view of the Additional Collector, therefore, it was not conclusively proved by the petitioners that they had first supplied the paper to the customers and that thereafter they had undertaken to get the designs printed thereon and they, thereafter, were not entitled to have the amount of Rs. 34,126-15-0 excluded from the turnover. The petitioners then took the matter before the Sales Tax Tribunal in a revision. The view of the Tribunal was that the petitioners were unable to show that there were initially two separate contracts for appear and printing and since the petitioners had failed to produce any material to show that there were initially separate contracts for the supply of paper and for the printing work, they were not entitled to claim the exclusion of the amount of Rs. 34,156-15-0 from their turnover. Thereafter at the instance of the petitioners, the Tribunal drew up a statement of case and referred to this Court the following three questions :
(1) Whether on the facts and circumstances of the case the charges amounting to Rs. 34,126-15-0 received by the applicants have been rightly treated as sale price and included in the taxable turnover of the applicants ? (2) Whether the supply of paper and the contract of printing constitute one or two separate contract transactions ? (3) What should be the sum which should be taken as the correct turnover for the purpose of the sales tax under the circumstances ?

(2.)Mr. Trivedi, learned Advocate appearing for the petitioners has contended that the vies taken by the sales Tax Tribunal is erroneous. He points out that it was his case that the contract for the supply of posters between the petitioners and their customers was a composite contract consisting of two distinct and divisible parts one of which related to the sale of papers and the other for the work, labour and skill. The confirmatory letters which he and produced before the Sales Tax Authorities and the Tribunal and the bills which he had supplied to the customers as also the accounts which he had maintained in connection with the transactions clearly substantiated his case. The Sales Tax Authorities and the Tribunal have ignored this evidence, which is clearly in favour of the petitioners without assigning any good or proper reasons. The Tribunal, he points out, is in error when it says that the petitioners had not produced any material to show that there were initially separate contracts for the supply of paper and for the printing thereof when there was, as a matter of fact, prima facie evidence produced by them. The Tribunal in its judgment has not dealt with this evidence nor given any reasons for its ignoring the same. According to Mr. Trivedi, therefore, since the Tribunal has misdirected itself in holding that the petitioners have not produced any material to show that there were separate contracts for the supply of paper and the printing, its finding is vitiated and would not be binding as a finding of fact.
(3.)It is contended by the learned Advocate-General that the conclusion of the Sales Tax Authorities and the Tribunal is not as a result of their not having applied their mind to the material on record or to their having ignored the evidence on record, but on an appreciation thereof. Whether the appreciated of the evidence by the Sales tax Authorities and the Tribunal is erroneous or correct is not a matter which can be inquired into on a reference and the finding of fact arrived on the appreciation of evidence even if erroneous cannot be interfered with by this Court. The learned Advocate-General points out that the Tribunal has come to the conclusion that in the present case there were no separate contracts, one for the supply of paper and the other for doing printing work but the contract was one and indivisible for the supply of ready-made posters. This, he says, is a finding of fact arrived at on the appreciation of the material on record and is not capable of being disturbed.


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