Rajes Kumar, J. - (1.) These two revisions under Section 11 of U.P. Trade Tax Act (hereinafter referred to as "Act") are directed against the order of Tribunal dated 03.07.1996 relating to the assessment years 1991-92 both under the U.P Trade Tax Act and Central Sales Tax Act.
(2.) Following questions have been raised: "Whether the Tribunal is legally justified in holding the sale of printed polythene bags under the category of "Works Contract" and non taxable ?"
(3.) Dealer opposite party (hereinafter referred to as "Dealer") was involved in the manufacturing of polythene shopping bags. Tribunal referred that these bags are mainly used by various Government undertakings, textile manufacturers and large textile show rooms for their own use as well as for the distribution to their retailers for the purpose of delivering the goods to their customers. Manufacturing process involved are that the polythene granules are used to extrude rolls of polythene lay that tubings which are thereafter mounted on a flexographic printing machine for printing the approved design of the buyer alongwith name, address and telephone number of the buyer. Printed tubing thereafter, is cut and sealed into bags on automatic machine and despatched to the buyer after affixing handles on it. In some cases, no printing is being carried on and the dealer sold the simple bags to its customers on which liability of the tax has been admitted but in some cases, where manufacturing was being carried on the basis of the customers specification and the printing of the design, name, address and telephone number etc. had been done on the bags by the flexographic printing machine during the course of manufacturing itself. The supply of such printed bags against such orders have been treated as works contract and not sale and the liability of tax has not been admitted. Even the liability of the tax on the material used in the manufacturing of bags has not been admitted such works contract was not notified under the notification issued in the exercise of power under Section 3-F of the Act.;