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In State of Orissa v. Ramanath Panda [1971] 27 STC 98 a Division Bench of the Orissa High Court held that where the customer does not enter into any separate agreement but merely asks the assessee to supply the printed materials, the contract is indivisible and the supply of printed materials is a sale liable to sales tax. Likewise, a Division Bench of the Kerala High Court in Varghese v. State of Kerala [1976] 37 STC 171, while holding that sale of bill books, vouchers, receipt books, letter heads and notices was liable to be taxed as the sale of the aforesaid goods amounted to a sale of finished products, pointed out:
Only in respect of those goods to which title has passed as a result of contract, can it be said that the goods have been sold. Where a person buys a 'Picasso' or a 'Ravi Varma', he does not intend to buy or pay for the canvas or the paint, although canvas and paint are involved in the production of the painting, and title to such materials is transferred to him. But such transfer of title to the materials is not pursuant to any agreement for the sale of the materials as such. It would never have been in his mind to pay separately for the materials and for the labour. What the buyer buys is a finished product which is a work of art. On the other hand, when a person gets his manuscript printed as an article or a book of verses, the printer does no more than a mechanical or technical job. The printer does not create the article or the poem, but merely renders his services to print which is in the nature of a job-work. The manuscript as such is the result of the skill, industry and scholarship of the author. In such a case, there is no sale of the article or book by the printer; nor would it be possible in such a case to spell out an agreement for the sale of materials such as paper or ink, which may have been incidentally used in the production of the printed work. While the painter sells a finished product which is a work of art, quite distinct and different from the materials used in its production, the printer merely does a job-work involving no sale; one is the work of an artist who is endowed with the finer qualities of imagination and taste and the other that of an artisan who is trained as a mechanic or technician. A printer of judgments, for example, does not produce and sell them; his work is purely that of a technician. This court has therefore held that printing of judgments is only a works contract. The work of a printer in certain cases may involve more than printing; he may be a producer of finished articles such as bill books, vouchers and the like. When such articles are printed and sold to the customers, what is sold is not paper or paper products but printed materials which are finished products. Such contracts cannot be considered as contracts for the sale of paper coupled with an agreement to render service. The sale of paper had never been the subject-matter of the agreement between the parties. Like in the case of painting which is a finished product being a work of art, the bill books and vouchers are new products being printed materials; and the sale of such goods does not involve a composite contract which can be bifurcated into an agreement for the sale of goods--be they canvas and paint or paper and ink--and an agreement for work.
In Sales Tax Officer v. Somasundaran [1974] 33 STC 68 it was held by a Division Bench of the Kerala High Court that in order to spell out a contract of sale there must be an agreement which may be express or which may be inferred from the circumstances. There can be an agreement for work and labour or there can be one for sale of goods. If essentially the agreement is one for work and labour, complete exemption from taxation should be allowed. If, on the other hand, it is a contract for sale, the whole turnover should be taxed. There may be complex contracts for sale and for work and labour. In such cases, it may be possible and it may be necessary to bifurcate the contract into two by saying that really there are two contracts, one for work and labour and another for supply of materials. But if this view is to be taken, there must be material on the basis of which it is possible to say that the contract was not one and composite, but really two. A contract for printing of judgments of courts is essentially a contract for work and labour and there is no justification for bifurcating that contract into two different contracts, one for cost of labour and the other for sale of paper, whereas in the case of contracts relating to the printing of ration cards, it is in the nature of job-works and it is essentially a contract for the sale of finished articles.

9. Coming to the facts of the instant case, it would be seen that in view of the principles in this behalf laid down in the aforesaid decisions, particularly in the case of Sardar Printing Works [1958] 9 STC 75 by a Division Bench of this Court, articles falling under categories (1) to (7) specified in the opening part of this judgment would apparently constitute stationery and sale thereof being of finished goods, their turnover was exigible to sales tax. Annual audit reports and financial statements in book form to be circulated to the members at item No.(8) and the pamphlet entitled "Jabalpur Zila Me Nalkoop Yojna" would, however, stand on a different footing. They will fall in the same category as of a printer of a manuscript printed as an article or a book of verses, question papers or judgments in regard to whom it has been found in the case of Varghese [1976] 37 STC 171 (Ker) that he does not produce and sell them and their printing only is a works contract. As pointed out in that case also, the work of a printer in certain cases, for instance, with regard to bill books, vouchers and the like involves more than printing and in such a case he will be a producer of finished articles and when such articles are printed and sold to the customers, what is sold is printed material which constitutes finished products. We have gone through the orders which were placed from time to time with the petitioner and a perusal thereof makes it clear that after giving the specification of the various articles falling in categories (1) to (7) mentioned above, the petitioner was required each time to print these articles in such quantity as mentioned in the orders and supply them. Even though technically speaking since these orders were placed from time to time they may not literally fall within the category of a standing order either generally or for a fixed period as contemplated in the case of Uma Art Press [1984] 56 STC 300 (All.). Keeping in view the nature of the orders, there seems to be no doubt that the case of the petitioner in regard to articles mentioned in categories (1) to (7) specified above are of the same nature as contemplated in the case of Uma Art Press [1984] 56 STC 300 (All.). These orders were placed by the customers in the course of their business and after giving specification of the goods they required the petitioner to supply the goods in the quantity mentioned therein and subsequently the petitioner produced those goods on its own paper and supplied the same to the customers for price paid in lump sum. They fall in the category of finished goods as held by a Division Bench of this Court in the case of Sardar Printing Works [1958] 9 STC 75. Consequently, the impugned orders, in so far as they relate to articles specified at categories (1) to (7) mentioned above cannot be said to suffer from any manifest error of law. These finished goods do not obviously fall within the category of supplying prints of photographs as in the case of B.C. Kame [1977] 39 STC 237 (SC) or of fabrication of rolling shutters and steel works and fixing them to the premises so that they become a permanent fixture and accretion to immovable property as in the case of Vanguard Rolling Shutters & Steel Works [1977] 39 STC 372 (SC) or supplying spare parts in the process of repairing, servicing and overhauling aircrafts as in the case of Hindustan Aeronautics Ltd. [1984] 55 STC 314 (SC). Indeed, they fall in the category, as pointed out in the case of B.C. Kame [1977] 39 STC 237 (SC) as also in the case of Hindustan Aeronautics Ltd. [1984] 55 STC 314 (SC), to which the test, namely, "whether or not the work and labour bestowed end in anything that can properly become the subject of sale" applies. The said orders, however, with regard to printing of annual audit reports and financial statements in book form to be circulated to the members and of the pamphlet entitled "Jabalpur Zila Me Nalkoop Yojna" or such other pamphlets, if any, cannot be sustained in view of the distinguishing feature already pointed out above.