S R P WORKS AND RUBY PRESS Vs. STATE OF ANDHRA PRADESH
LAWS(APH)-1971-6-9
HIGH COURT OF ANDHRA PRADESH
Decided on June 18,1971

S.R.P.WORKS AND RUBY PRESS Appellant
VERSUS
STATE OF ANDHRA PRADESH Respondents

JUDGEMENT

Obul Reddi, J. - (1.) These two revisions, preferred by the assessee, are directed against the order of the Sales Tax Appellate Tribunal in Tribunal Appeals Nos.195 and 196 of 1969 confirming the order of the Deputy Commissioner, Kakinada and rejecting the contention of the assessee that the work undertaken by the assessee is a works contract and not a sale of goods,
(2.) The facts giving rise to these two revisions are these: The petitioner is a printing Press known as M/s. S.R.P. Works and Ruby Press, Kakinada. It supplied cinema tickets printed on different colour papers and of different denominations to the customers, both within the State and outside. Before the customers place the orders for supply of large quantities, they obtain samples and then place orders giving specifications. The printers, while making out bills, gave break up figures, showing the cost of paper and the cost of printing separately and the total cost. No formal agreements were entered into. But orders were placed by the customers stating the quantity required and the type of paper that has to be used for printing the tickets. The assessing authority only assessed onthe value of the paper for printing the tickets and granted exemption in respect of printing charges on the ground that they represent the cost of labour. The Deputy Commissioner, Commercial Taxes, in exercise of his revisional powers, revised the order of the assessing authority holding that the transactions involved are sales of finished goods and not merely of paper and the price of paper cannot be dissociated from printing charges. It is against the order of the Deputy Commissioner treating the entile turnover as representing the sales of cinema tickets that the petitioner preferred the appeals to the Appellate Tribunal. The Tribunal agreed with the findings recorded by the Deputy Commissioner and confirmed the assessment made in respect of the turnover involved in these two cases.
(3.) Mr. Anantha Babu, the learned Counsel appearing for the petitioner contended that the Tribunal was in error in holding that the transactions involved are not works contracts and even if they are not works contracts, the bills presented by the assessee would show that they consisted of two separate or distinct contracts--one for the supply of paper and the other the charges lor printing of tickets. To determine whether there are two contracts one for the supply of paper and the other for printing it is necessary to look into the orders placed by the customers with the petitioner. Usually in commercial transactions of this nature, no written agreements are entered into but only orders are placed, sometimes orally and sometimes in writing and in these cases written orders were placed by the customers. The intention of the parties whether the contract was for sale of finished goods or only for sale of paper can easily be ascertained from a reading of the orders, pursuant to which the printed material was supplied to several customers. The four orders which have been exhibited read :- "1. Order of Sri \enkateswara Palace, Venkatagiri Town, Nellore District, dated 25th February, 1964: We are hereunder placing an order for the following tickets at an early date as we are badly in need of the said tickets Chair-Yellow-1 to 5,000 Bench-Green-I to 10,000 (20,000) Floor-Rose-1 to 10,000 (each bundle) (75,000) We are herewith sending Rs. 10 towards advance by M.O. and send us the bill of one lakh tickets through Andhra Bank; Venkatagiri. Draft send by V.P.P. Please let us know the rates of out- passes in the samples after which we will order you. Please send us the tickets immediately as we are not having stock. The samples are here- with enclosed. We await to receive your reply. 2. Order of Sesh Mahal, Nellore, dated 17th February, 1964. "We thank you for your kind letter of I5th instant with its enclosures. We give as under our order for the printing and supply of cinema tickets for both of our theatres and request you to kindly supply the same keeping the same quality and get-up as your previous supplies. Our requirements are For Sesh Mahal Males: 0-60 from No. 1 to one lakh in red colour specimen enclosed. 0-30 from No. 1 to one lakh in colour specimen enclosed-Yellow. Ladies: 0-30 from No. 1 to 50,000 specimen paper enclosed-Indigo. Rang Mahal Orange-Males: 0-60 Class froml to one lakh. Kraft-Ladies : 0-30 Class from 1 to 50,000. Specimens: Orange paper and kaki for 0-60 and 0-30 classes respectively enclosed. Please send quotation with samples for the supply of outpasses by next post". 3. Order of Sri Vijaya Talkies, Vijaya- wada, dated 25th February, 1964. "We have pleasure in placing with you an order for the following tickets:- 0-70-Males :80,000-Eight sets in different colours. R.Y.W.G.L.R. 1 to 10,000 each 2' 2' 0-0070 2,000-Two sets in two different colours 1 to 10,000 each. Please supply the above tickets neatly printed at your earliest convenience and oblige. Thanking you.";


Click here to view full judgement.
Copyright © Regent Computronics Pvt.Ltd.