1. This is a reference under Section 44(1) of the M. P. General Sales Tax Act (hereinafter referred to as 'the Act') made by the Board of Revenue referring the following question of law for the opinion of this Court:
Whether under the facts and circumstances of the case, when a printer produces for a customer an article which is of value only to the particular customer, whether only the material used in producing this article or the total price of the finished article will be liable to sales tax
2. The facts in brief giving rise to this reference may be stated thus : The non-applicant M/s. Ratna Fine Arts Printing Press, the owner of a printing press was assessed to tax by the Assistant Sales Tax Officer, Ujjain, for the period from 1st April, 1968, to 31st March, 1969, by his order dated 20th May, 1970. The gross turnover was determined at Rs. 18,000. The taxable turnover was also determined at the same figure and a sum of Rs. 1,260 was assessed as tax payable by the assessee. A penalty of Rs. 100 was imposed under Section 17(3) of the Act and a penalty of Rs. 15 was also imposed under Rule 69-A. In the first appeal by the assessee before the Appellate Assistant Commissioner of Sales Tax the order of assessment was maintained and the contention of the assessee that he performed only the job-work and therefore no tax was leviable was negatived. In the second appeal by the assessee before the Board of Revenue the same contention was raised which was accepted and the order of the assessment as well as the order of the Appellate Assistant Commissioner were set aside. The Tribunal took the view that the assessee had executed a large quantum of work on job contract basis and no sales were effected by the assessee.
3. The Commissioner of Sales Tax applied for making a reference to the High Court which was rejected. The Commissioner of Sales Tax then applied under Section 44(2) of the Act to this Court requesting that the Tribunal be directed to refer the question to this Court as a question of law was involved in the matter. In Misc. Civil Case No. 57 of 1976 this Court by order dated 3rd January, 1979, allowed the application and directed the Tribunal to refer the question of law to this Court in pursuance of which the question stated above has been referred to this Court for opinion.
4. In B. C. Kame v. Assistant Sales Tax Officer, Circle No. 2, Jabalpur  28 STC 1 a Division Bench of this Court had an occasion to deal with a somewhat similar question of law pertaining to the business of a photographer in which the principle was laid down that if the movable article or chattel is taken as such or the contract is primarily one of work and labour and the transfer of chattel is only ancillary, then it is an agreement of work and labour rather than of purchasing an article because the customer while placing an order for photograph is not making a contract to purchase the paper on which the photograph is impressed as such, but it comes to him merely as ancillary to the main contract of work and labour. Similary in Rubber Stamp Works v. Deputy Commissioner of Sales Tax, Raipur  43 STC 335 another Division Bench of this Court, while dealing with the case of manufacturer of rubber stamps took, the view that when a manufacturer of rubber stamps obtains an order from a customer to prepare a particular rubber stamp to be made specially for the customer, the sale is not of the rubber stamp but the task is to carry out a works contract and the customer does not pay for the rubber or the wood used, but for the particular finished stamp and therefore it cannot be termed as a sale of chattel and as such the entire turnover of the assessee was not liable to be assessed to sales tax. In yet another case in Commissioner of Sales Tax v. L. Vasu&eo; Rao  48 STC 447 a Division Bench of this Court took the view that the contract for preparation of blocks is a contract for skill and labour and does not involve the sale of materials and as such no tax is leviable under the M. P. General Sales Tax Act on the price of materials used in making the blocks.
5. In the present case, the assessee executed a large quantum of the work of printed material on job contract basis which is of no utility to any one else but which is of value only to the particular customer who ordered for the same. It would be primarily a contract of work and labour rather than a sale transaction of the said material, the transfer of the said material being only ancillary. A customer, when he places an order for printing a particular article for him, does not enter into a contract to purchase only the paper or material used in producing the printed article but the said material used in the article comes to the customer merely as ancillary to the main contract of work and labour and as such no tax would be leviable under the Act on the price of material used in producing the printed article for a particular customer.
6. It is settled view that if the substance of the contract is that skill and labour have to be exercised for the production of the articles and it is only ancillary to that that there will pass from the artist to his client or customer some material in addition of the skill involved in the production of the article that does not make any difference to the result because the substance of the contract is the skill and experience of the artist in producing the article. Having regard to these principles, it may be said that the principal object of the work undertaken by the owner of a printing press is not the transfer of the material on which the printing work as desired by a customer is done, but the contract is one of work and labour involved in the preparation of a printed article of the subject desired by the customer which involves considerable skill and labour. In these circumstances, we find that the Tribunal was justified in holding that the assessee had executed the work of printing on job contract basis and therefore no tax is leviable under the Act on the price of the material used in producing the printed articles and that the total price of the finished articles will not be liable to sales tax.
7. In view of the above discussion, we answer the question in favour of the assessee and against the department by holding that under the facts and circumstances of the case, when a printer produces for a customer an article which is of value only to the particular customer, the material used in producing such article is not liable to tax and also that the total price of the finished article will not be liable to sales tax.