B.N. Sapru, J.
1. This is a revision by the assessee and pertains to the assessment year 1973-74.
2. The assessee is aggrieved by an order of the Sales Tax Tribunal which decided, in appeal, that the assessees had effected sales of diaries and labels and had not done any works contract.
3. The assessee is a dealer in diaries, books, etc. He also booked orders to prepare labels of specifications provided by the customers and also prepared diaries of certain specifications. The assessee has been found to have charged a consolidated price for the diaries and labels. He has not charged separately for the paper and labour. The Tribunal held that since the assessee had charged a consolidated price for the products supplied, that would be the crucial test for determining whether the assessee was entitled to any exemption in respect of the printing charges. The approach of the Tribunal was, as the Tribunal expressly said so in paragraph 12 of the judgment, that 'the primary question in such cases that arises for determination is the intention of the parties viewing the transaction as a whole.' It calls for decision if they intended an apportionment or viewed the transaction on compartmented basis as that which represents labour and that which represents sale of the material.
4. Having framed this question, the Tribunal came to the conclusion that since the assessee has been paid a consolidated sum for the supply of material in the shape of diaries which were prepared though according to the customers' specifications, the assessee sells the diaries to the customers.
5. A similar approach was adopted by the Tribunal in regard to the labels.
6. The learned counsel for the assessee, Sri Bharatji Agrawal, has argued that what the assessee did was essentially to apply skill and labour to the paper and produced the diaries according to the specifications supplied by the customers and therefore, what the assessee did was that he executed a works contract and did not effect a sale of the finished products to the purchasers.
7. The second argument of Sri Bharatji Agrawal broadly put is that whenever a printer executes an order to a particular specification and the goods produced are not capable of being used by any one other than the purchaser, there is a works contract and there is no sale of goods.
8. Taking up Sri Bharatji Agrawal's first argument, there is one difficulty that this argument does not appear to have been advanced before the Tribunal in the form that has been put by Sri Bharatji Agrawal. The entire approach seemed to to take the view that where the papers are used on which some labour has been expended then unless the price of the papers is separately charged and also for the labour involved, there is always a sale of products.
9. The Supreme Court in the case of Assistant Sales Tax Officer v. B. C. Kame  39 STC 237 (SC) had a case of a photographer who, inter alia, supplied positive prints of the same size negative brought to him by his customers. The revenue wanted to tax the transaction. The Supreme Court held that it was a works contract and sales tax was not leviable. The Supreme Court observed that,
The question as to whether a contract is a contract of work and labour or a contract for sale is not one free from difficulty. The reason for that is that in border line cases the distinction between the two types of contracts is very fine. This is particularly so when the contract is a composite one involving both a contract of work and labour and a contract of sale. Nevertheless, the distinction between the two rests on a clear principle. A contract of sale is one whose main object is the transfer of property in, and the delivery of the possession of, a chattel as a chattel to the buyer. Where the principal object of work undertaken by the payee of the price is not the transfer of a chattel qua chattel, contract is one of work and labour. The test is whether or not the work and labour bestowed end in anything that can properly become the subject of sale; neither the ownership of materials, nor the value of the skill and labour as compared with the value of the materials, is conclusive, although such matters may be taken into consideration in determining, in the circumstances of a particular case, whether the contract is in substance one for work and labour or one for the sale of a chattel.
10. Thus, the approach of the Tribunal in the light of the decision the Supreme Court cannot be held to be correct. The Tribunal was bound to go into the question as to whether the products supplied by the assessee and which were purchased by the customers were one for work and labour to be expended on the material used or were for the sale of diaries as such.
11. As far as the labels are concerned, the Sales Tax Officer, in the assessment order, observed that the costs of 1,000 labels was Rs. 3.50 out of which the price of paper was Rs. 0.75 paise only. This finding has not been upset by any of the higher authorities and has not been challenged by the Revenue. Thus, it is clear that the main ingredient of the price of the labels was the labour expended in the preparation of the labels by the assessee.
12. The Supreme Court in the passage quoted above said that the relative prices of the material and the labour done on the material is not decisive but it is a factor which is to be taken into account for judging whether there was a works contract or not.
13. In this case there was a further finding by the Tribunal that the labels were made to the specifications given by the customer and it was only that customer alone who was able to use those labels.
14. Printed copy of biri labels was produced before the authorities. It contained the trade marks of the biri manufacturer. Skill was definitely needed to reproduce the trade mark on the labels.
15. In view of the fact that the labels were produced to the specification of the customers and the further fact that the price of the paper was about 20 per cent of the price of labour and also keeping in view the fact that these labels could be used by no one else, it is clear that as far as the labels are concerned, what the assessee did when it supplied the labels, was that it executed a works contract.
16. As far the diaries are concerned, the Tribunal will have to re-determine the question keeping in mind the observation made above.
17. In the result, the revision is partly allowed. The order of the Tribunal is set aside in so far as it held that the assessee is liable to pay sales tax on the supply of labels to his customers. It is held that the assessee when it supplied the labels, executed a works contract. So far as the diaries are concerned, the Tribunal will re-determine the question as to whether the assessee can be subjected to tax on the price of the diaries sold by him keeping in view the observations made in this judgment. The parties will bear their own costs. The papers will now go back to the Tribunal under Section 11(8) of the Act to make appropriate orders.