ORDER
Dr. B.P. Saraf, J.
1. By this reference under section 9 of the Maharashtra Sales Tax on the Transfer of the Property in Goods Involved in the Execution of Works Contract (Re-enacted) Act, 1989 read with section 61(1) of the Bombay Sales Tax Act, 1959, the Maharashtra Sales Tax Tribunal has referred the following question of law to this Court for opinion, at the instance of the revenue :
“Whether on the facts and circumstances of the case and on a true and correct interpretation of the provisions of the Maharashtra Sales Tax on the Transfer of Property in Goods involved in the Execution of Works Contract (Re-enacted) Act, 1989, was the tribunal justified in law in holding that there is no transfer of property in the ink purchased and used by the respondent in the printing job where paper is supplied by the customers and consequently the opponent is not required to pay tax on the ink so used in such printing work and hence not a dealer qua the transaction incurring any liability for registration?”
2. The assessee M/s. R.M.D.C. Press Pvt. Ltd. is running a printing press. It is also engaged in manufacturing of cartoons. It also undertakes job works of printing on behalf of customers who supply their own papers for printing. The assessee receives labour charges in such case for the job work done by it. The assessee purchases ink, a part of which is used in the job work of printing done by it oh the papers supplied by the customers. On enactment of the Maharashtra Sales Tax on the transfer of property in goods involved in the execution of Works Contract Act, 1985 (“1985 Act”) with effect from 1st October 1986 which provided for the levy and collection of tax on the amount of sale price received or receivable by a dealer in respect of the transfer of Property in Goods involved in the Execution of any works contract in the State of Maharashtra, the assessee made an application for registration under section 8 of 1985 Act to the concerned authority. This application, however, was made under protest. On receipt of the registration certificate, the assessee appealed to the Assistant Sales-tax Commissioner (Appeals). During the pendency of the appeal, the above enactment was repealed with retrospective effect from the very date of its commencement, i.e., 1st October 1986, by the Maharashtra Sales Tax on the Transfer of Property in Goods involved in the Execution of Works Contracts (Re-enacted) Act, 1989 (“1989 Act” or “the Act”) with a view to bringing it in conformity of the decision of the Supreme Court in Builder’s Association of India v. Union of India, 1989(73) S.T.C. 370. The provisions of the 1989 Act, so far as they are relevant for the present case, are, however, identical to those of the 1985 Act. The Assistant Commissioner (Appeals) examined the contention of the assessee in the light of the 1989 Act. The case of the assessee before the Assistant Commissioner (Appeals) was that there was no transfer of property in the ink used in printing either as ink or in any other form and hence he was not liable to pay any tax under the Act. The Assistant Commissioner (Appeals) did not accept the above contention of the assessee and dismissed the appeal. Aggrieved by the order of the Assistant Commissioner (Appeals), the assessee appealed to the Maharashtra Sales Tax Tribunal (“Tribunal”). Before the tribunal, the assessee reiterated its contention that there was no transfer of property in the ink in any form when it was used for printing. The Tribunal accepted the above contention of the assessee and held that there was no transfer of property in the ink and, therefore, the assessee was not liable to pay any tax on the value of the ink used in the printing on the papers supplied by the customers. The tribunal, however, remitted the matter to the Sales Tax Officer for reascertaining the liability of the assessee for registration on the basis of any other transaction involving transfer of property in goods in the execution of the contracts. Aggrieved by the above order of the tribunal, the revenue is before us by way of the present reference.
3. We have heard Mr. R.V. Desai, learned Counsel for the revenue, who submits that after the 46th Amendment of the Constitution of India by insertion of Clause (29-A) in Article 366 which defines a tax on “sale or purchase of goods” to include, inter-alia, a tax on transfer of property (whether as goods or in some other form) involved in the execution of a works contract and enactment of the Maharashtra Sales Tax Transfer of Property in Goods involved in the Execution of Works Contracts Act, 1985 with effect from 1st October 1986 which was repealed with effect from the very same date by the 1989 Act, the value of ink used in job work of printing undertaken by the assessee would be liable to tax under the provisions of 1989 Act. According to the learned Counsel, the above Act provides for levy of tax on transfer of property in goods, whether as goods or in some other form, involved in the execution of works contracts in the State of Maharashtra and in a printing work undertaken by the assessee, there is a transfer of ink to the customer which is liable to tax. Mr. P.V. Surte, learned Counsel for the assessee, on the other hand, submits that though the Act provides for levy of tax on transfer of property, whether as goods or in some other form, involved in the execution of the works contracts in the State, no tax can be levied on the value of the ink used in printing because there is no transfer of property in the ink. According to the learned Counsel, a contract of printing is not a works contract. It is a pure and simple contract for job work which does not involve transfer of any goods at all whether as goods or in any other form. In such a contract, according to the learned Counsel, ink is merely a tool of the printer. There is no transfer of any property to the customer in the job work of printing. The learned Counsel, therefore, submits that the Tribunal was right in holding that there was no transfer of ink within the meaning of the provisions of the 1989 Act. He, however, fairly stated before us that if there is transfer of any other material in the process which can be subjected to tax, the revenue is entitled to do so even in this case because the matter has been remitted by the Tribunal to the Sales-tax Officer to decide the same. The controversy in this case, therefore, is in a very narrow compass. The only question for determination is whether in execution of job work of printing on the papers supplied by the customers, there is a transfer of property in the ink, either as ink or in any other form.
4. We have carefully considered the rival submissions of the learned Counsel for the parties. It is true that the position in regard to levy of tax on , transfer of property in goods involved in the execution of works contracts has undergone a complete change with the 46th Amendment of the Constitution and the enactment of the Maharashtra Sales Tax on the Transfer of Property in Goods involved in the Execution of Works Contract Act, 1985 and reenactment thereof in the form of the 1989 Act by the State of Maharashtra. After the 46th Amendment of the Constitution, the State Legislature has the power to make law for levy of tax on the transfer of property in goods involved in execution of works contracts. In exercise of that power, the State of Maharashtra enacted 1985 Act which was repealed by the 1989 Act from the date of its inception. The Act provides for levy of tax on the transfer of property in goods involved in execution of works contract (whether as goods or in some other form).
5. The question that arises for consideration is whether in execution of job work of printing, any transfer of property in the ink is involved. We have given our careful consideration to this controversy. We, however, find it difficult to hold that in the execution of job work of printing, there is any transfer of property in the ink which is used for the purpose of printing. In fact, ink is a tool of the printer. It is consumed in the process of printing and loses its identity as “goods”. No property can be said to pass in ink in execution of the contract of printing, either as ink or in any other form. No customer, is concerned with the ink used in printing, its quantity or cost. It cannot be said that when a customer gets some papers printed, he also gets ink either as ink or in any other form. There is thus no transfer of ink involved in execution of a works contract of printing. It may be pertinent to observe that what is taxable under the Act is the value of the goods which get transferred to the customer in execution of works contract either as goods or in any other form and not the value of goods used or consumed in the execution of the works contract, if such user or consumption does not result in transfer of property in those goods in any form to the customer. That being so, in our opinion, the tribunal was right in holding that there is no transfer of property in ink involved in the execution of contract of printing, either as ink or in any other form.
6. In view of the above, we answer the question referred to us in the affirmative i.e. in favour of the assessee and against the revenue. This reference is disposed of accordingly with no order as to costs.
7. Reference answered in affirmative.