V.P. Gopalan Nambiyar, C.J
1. This tax revision is preferred at the instance of the assessee against its assessment to sales tax for the year 1971-72. The nature of the transaction was described by the Sales Tax Officer as consisting of drawing, designing, block-making and printing letter-heads, advertisements and Christmas cards and the like. The accounts which were accepted by the authorities showed the details of the transaction as follows:
Details of sales are as follows :Sale proceeds of bills and Christmas cards : Rs. 1,30,167.26Non-taxable turnover claimed : Rs. 13,005.25Receipts on advertisements: Rs. 130.00-----------------Rs. 1,43,302.51Inter-State sales: Rs. 466.65-----------------Rs. 1,43,769.16-----------------
It claimed exemption in respect of Rs. 13,005.25 and in respect of Rs. 466.65 representing inter-State sales. The amount of Rs. 13,005, for which exemption was claimed, was said to represent the value of work and labour supplied ; and it was claimed that this was not a transaction of sale and purchase. The Sales Tax Officer noticed that the order book maintained by the assessee showed that the assessee entered only into a single contract with the customer for printing and supply of the goods. Although it was true that the charge for each process was separately fixed, he was of the opinion that it did not follow that the property in the goods passed on to the customers at each stage. On this ground he negatived the claim for exemption and completed the assessment disallowing the exemption claimed in respect of Rs. 13,005. On appeal, the Appellate Assistant Commissioner reversed this part of the judgment of the Sales Tax Officer holding that the order form and the bills made out by the assessee showed the amounts separately in respect of each of the items. He was of the view that the sum of Rs. 13,000 and odd represented the amount for work and labour; and, therefore, the exemption claimed by the assessee was allowed. On further appeal by the department, the Sales Tax Appellate Tribunal reversed the decision of the Appellate Assistant Commissioner and restored that of the Sales Tax Officer. It rejected the contention of the assessee that the mere fact that the order form and the books of account showed the items separately would entitle the assessee to treat the amount as eligible for exemption from assessment to sales tax and as representing a contract for work and labour as distinct from a contract for sale and purchase of material. It is the correctness of this conclusion that is questioned in this revision.
2. Counsel for the revision petitioner invited our attention to the decisions of the Bombay High Court in Camera House, Bombay v. State of Maharashtra  25 S.T.C. 354, in Commissioner of Sales Tax v. Durga Khote Productions  36 S.T.C. 77, in Commissioner of Sales Tax v. Studio Ratan Batra  35 S.T.C. 522 and in Commissioner of Sales Tax v. Lettering Art.  35 S.T.C. 529. We do not think it necessary to examine all those decisions in detail. By way of an example, we might refer to the decision in Camera House, Bombay v. State of Maharashtra  25 S.T.C. 354. A Division Bench of the Bombay High Court was there concerned with photographers and photographic dealers engaged in three types of business, viz., (i) preparing enlargements of photographs from the negatives given by the customers ; (ii) developing customers' film rolls and taking out prints from them ; and (iii) taking photographs of customers and supplying prints to them. It was held that each of those transactions was really composed of two essential parts, namely, for the sale of materials as well as for work and labour to be done; and that the contracts were distinct and easily severable, although they formed parts of one transaction. Having stated the position this way, the Division Bench analysed the transactions and held that in the first type of transaction there were two contracts : (1) for work on the part of the photographer and (2) for sale of the photograph. In such a transaction, there is an implied agreement that the enlarged photographs should be sold separatim and a clear intention to sell as such ; in the second type of transaction there is nothing but a contract for skill and labour and that in the third, which involved three parts, taking the photograph, developing the film and furnishing of three prints thereof, only the contract for supply of prints of the particular size amounted to a sale, the other two being contracts for work and labour. It was further ruled that in each of the three types of contracts only such part as amounted to a sale was liable to sales tax; that the primary question that arises for consideration in cases of a composite transaction of the type considered was whether the transaction is entire and indivisible or whether it is severable. On the actual facts found, the principle formulated is understandable.
The principle of the distinction between a contract for work and labour and one of sale and purchase has been succinctly stated in Halsbury's Laws of England, 3rd Edition, Vol. 34, page 6, para. 3, as follows :
3. Contract of sale distinguished from contract for work and labour.-A contract of sale of goods must be distinguished from a contract for work and labour. The distinction is often a fine one. A contract of sale is a contract whose main object is the transfer of the property in and the delivery of the possession of, a chattel as a chattel to the buyer. Where the main object of work undertaken by the payee of the price is not the transfer of a chattel qua chattel, the contract is one for 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 the 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.
The passage was approved in State of Rajasthan v. Man Industrial Corporation Ltd.  24 S.T.C. 349 at 353 (S.C.). The principle is again succinctly stated in Benjamin's Sale of Goods, page 37, paragraphs 38 and 40. We do not think it necessary to cite these passages. The Indian law has also been summarised in Pollock & Mulla's Sale of Goods and Partnership Acts, at page 28.
3. We desire to refer to the decision of the Supreme Court in Arun Electrics, Bombay v. Commissioner of Sales Tax, Maharashtra State  17 S.T.C. 576 (S.C.). The assessee therein carried on business as contractors for electric installation. The question which fell for determination was whether the value of the materials consumed in carrying out contracts for electric fittings in which the rates were consolidated rates for the materials consumed and the labour charges, were liable to sales tax. A copy of the invoice, which merely set out the amount chargeable to the customer for supplying and fixing certain electric fittings and equipment was relied on by the assessee. Without recording evidence about the terms of the contract, the Deputy Commissioner held that the invoice evidenced two contracts, one for the sale of goods and the other for work and labour. On appeal, the Sales Tax Tribunal differed. On reference, the High Court disagreed with the Tribunal and agreed with the Deputy Commissioner. On further appeal to the Supreme Court, it was pointed out that the conclusions of the Deputy Commissioner and the Tribunal were based on no evidence and the High Court should not have recorded an answer on the reference. In the course of the judgment the Supreme Court observed:
The conclusions recorded by the Deputy Commissioner and the Tribunal must be held to be based on no evidence. In our judgment, no answer should have been recorded by the High Court on the question framed, for the question whether in respect of a transaction sales tax is exigible may be determined only on the terms of the contract and not from the invoice issued by the person entitled to receive money under the terms of the contract. The invoice did not represent any transaction, nor did it evidence a contract for work or for sale of goods. Without, therefore, expressing any opinion on the question whether the view taken by the Tribunal or by the High Court was correct, we discharge the answer recorded by the High Court on the ground that the question submitted for their opinion was not one which brought out the true question which was submitted to the Deputy Commissioner for opinion and even if the question be amended, there is no evidence on which the question may be answered. The parties to bear their own costs in this Court and the High Court.
The learned Government Pleader invited our attention to the decision of the Supreme Court in Commissioner of Sales Tax v. Purshottam Premji  26 S.T.C. 38 at 41 (S.C.), where again the Supreme Court pointed out the difference between the contract for work or service and a contract for sale of goods. It was stressed that mere transfer of property in goods used in the performance of a contract is not sufficient; and to constitute a sale there must be an agreement express or implied relating to the sale of goods and completion of the agreement by the passing of title in the very goods contracted to be sold. Ultimately, it was pointed out that the nature of the contract had to be gathered from the intention of the parties to the contract. Our attention was also called to the decision of the Madras High Court in General Electric Company v. Government of Madras  21 S.T.C. 283, which followed the principle of the Supreme Court in Arun Electrics, Bombay v. Commissioner of Sales Tax, Maharashtra  17 S.T.C. 576 (S.C.), referred to earlier; and also to the decision of this court in Sales Tax Officer, Palghat v. Somasundaran 1973 K.L.T. 814. In the decision of this court the position was stated rather strongly. The court noticed the earlier decision in Srinivasa Printing Works v. Sales Tax Officer 1966 K.L.T. 1139, where it was observed by a learned Judge that in cases of printing of letter-heads, binding of books and supply of journal forms, the contract involved was one for sale and that it was impossible to say that the contract for printing of the judgments of the court is a contract for sale and that such contracts are truly contracts of work and labour and that the imposition of sales tax on the turnover relating to the printing of judgments of court was unwarranted. This court had noticed some of the relevant decisions on the question.
4. Counsel for the assessee and also the learned Government Pleader drew our attention to the decision of the Supreme Court in Assistant Sales Tax Officer v. B.C. Kame  39 S.T.C. 237 (S.C.). But, on the actual facts disclosed in that case, the conclusion that the contract in question was one for work and labour and not for sale of the materials is understandable.
As pointed out in these decisions, the real question is one of intention as to whether there was a contract for the sale and purchase of a chattel as chattel or goods. From that point of view, we find it difficult to say or lay down as a proposition of law that charges separately shown in bills or items separately mentioned in the order form would be conclusive of the nature of the transaction. It seems to make little difference whether the order form or the bills are unilateral documents or bilateral ones to which both the parties had affixed their signatures. We are not satisfied that the signing of the documents was after a conscious study of, or advertence to, the legal nature and effect of the transaction. We cannot, in the circumstances, regard these documents as conclusive of the nature of the transaction, whether it was one of a contract for work and labour or sale of the materials concerned. In these circumstances and on the facts disclosed, we find little to interfere with the order of the Sales Tax Appellate Tribunal. We dismiss this tax revision case without any order as to costs.