M.P. Menon, J.
1. When a printer supplies letter heads, visiting cards, bill books, account books, balance sheets, ration cards and the like to a customer in pursuance of orders placed by him, is there a sale of finished goods or printed material to him Is their 'turnover' exigible to sales tax That is the common question in these revisions by the Revenue, against the orders of the Sales Tax Appellate Tribunal.
2. The Tribunal has held, on the basis of the material on record and in the light of decided cases, including the decisions of this Court in P. T. Varghese v. State  37 STC 171 and John Mathew Bros. v. State  42 STC 140 that most of the transactions were in the nature of works contract. It has also indicated that marginal instances would require closer scrutiny with reference to the facts and circumstances of each transaction and that the test of marketability will be a useful guide in most of the situations. Mr. Karunakarn Nambiar for the Revenue however contends that the Tribunal should have treated all the transactions as out-and-out sale of printed material or paper. It is alternatively contended in respect of bill books, vouchers, receipt books, letter heads and notices, the Tribunal should have implicitly followed the clear pronouncement in P. T. Varghese  37 STC 171 that they could be regarded only as sale of finished products.
3. In Srinivasa Printing Works v. Sales Tax Officer 1966 KLT 1139 Govindan Nair, J. (as he then was), held that printing of letterheads, binding of books and supply of journal forms were contracts for sale, as work and labour was not of the essence of the contract. But in Srinivasa Printing Works v. Sales Tax Officer 1967 KLJ 665 Isaac, J., thought that merely because certain transactions involve transfer of property in the printed material, they could not be regarded as sale of paper products or as anything other than execution of a works contract. A suggestion that in all such cases labour charges could be deducted and the balance treated as cost of paper and taxed accordingly, was rejected in Sales Tax Officer v. Somasundaran  33 STC 68. The Court there held that the correct approach would be to examine the nature of the contract as a whole, and not to bifurcate it into artificial components. But in P. T. Varghese v. State  37 STC 171 it was observed that 'in the case of a composite contract involving an agreement for sale as well as for labour, the State may be able to bifurcate the contract into two and impose tax on the turnover of the sale'. Holding however that no such composite contract could be spelt out in the case of printing bill books, vouchers, etc., the Court held :
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.
4. The above decisions were rendered before the pronouncement of the Supreme Court in Assistant Sales Tax Officer v. B.C. Kame  39 STC 237 (SC). The question in that case was whether a photographer taking a photo, developing the negative, and supplying the print to his client could be regarded as 'selling' the photo to the party; and the Court answered it in the negative. It was noticed that there could conceivably be cases where while entering into a contract of work, parties might enter into separate agreements, one of work and another for sale and purchase of the materials to be used in the course of executing the work. In such cases, the transaction would not be one and indivisible but would consist of two separate agreements. In all other cases, the attempt should be to find out the primary object and intention of the parties. By way of general principles, their Lordships explained:
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 contract is very fine. This 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, the 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.
Even in the case of composite contracts which could not be clearly identified as ivolving two separate agreements, therefore, the approach to be made was to examine the transaction as a whole and find out whether the principal object of the work was the transfer of a chattel qua chattel.
5. In John Mathew Bros. v. State of Kerala  42 STC 140 the assessee had supplied bills and Christmas cards to a customer for over Rs. 1.30 lakhs. He claimed exemption for Rs. 13,005 as representing the value of work and labour involed in the transaction. Although the charges for each process had been separately fixed, the assessing authority was not prepared to bifurcate the contract into two and grant the exemption claimed. On appeal the Appellate Assistant Commissioner was inclined to accept the assessee's case, but the Sales Tax Appellate Tribunal preferred to go by the finding of the assessing authority. The contention before this Court was that the contract was divisible, but that was rejected in the light of Kante  39 STC 237 (SC) in the following words :.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.
A mere arrangement between the parties to bifurcate a composite contract into two was thus held to be insufficient; it was for the authorities and the Court to decide whether the parties had consciously entered into two agreements, one of work and another for sale.
6. In Hindustan Aeronautics Ltd. v. State of Karnataka  55 STC 314 (SC) the Supreme Court noted with approval the following statement of law by Benjamin 'Treatise on the Law of Sale of Personal Property with reference to the French Code and Civil Law'-8th edition:
1. A contract whereby a chattel is to be made and affixed by the workman to land or to another chattel before the property therein is to pass, is not a contract of sale, but a contract for work, labour and materials, for the contract does not contemplate the delivery of a chattel as such.
2. When a chattel is to be made and ultimately delivered by a workman to his employer, the question whether the contract is one of sale or of a bailment for work to be done depends upon whether previously to the completion of the chattel the property in its materials was vested in the workman or in his employer. If the intention and result of the contract is to transfer for a price property in which the transferee had no previous property then the contract is a contract of sale.
Where, however, the passing of property is merely ancillary to the contract for the performance of work such a contract does not thereby become a contract of sale.
But it was added that 'whether a given transaction is a works contract pure and simple or it involves a sale of goods also is of course a mixed question of law and fact depending upon the facts of each case'. This aspect was again emphasised in Hindustan Aeronautics Ltd. v. State of Orissa  55 STC 327 (SC) in these words :.there is no rigid or inflexible rule applicable alike to all transactions which can indicate distinction between a contract for sale and a contract for work and labour. But the tests indicated in the several decisions of the Court merely focussed on one or the other aspect of the transaction and afforded some guidance in determining the question but basically and primarily, whether a particular contract was one of sale or for work and labour depended upon the main object of the parties in the circumstances of the transactions.
Thus when a person supplies pieces of wood to a carpenter for making a a chair, there could be no sale or purchase of the chair in the transaction. The position may not be different even if the quality of the wood and the size or shape of the chair are specified, leaving it to the carpenter to procure the pieces of wood required. But if the person gets such a chair from a furniture dealer, the transaction may be a sale, because the dealer there will only be marketing something he has kept for sale. Corpus Juris Secundum Vol. 77-'Sales'-Section 2, p. 585 contains a passage touching on the question of marketability :
Whether a contract is one for the sale of goods, or for work and labour to be rendered may depend on whether the primary intent is merely to provide for the delivery of goods, or whether the essential consideration is work and labour to be performed at the employer's instance and for his use rather than for the producer's benefit. The distinction has been made that, if the property is not such as the seller usually has on hand for sale and in existence at the time of the sale, but is made specially for the buyer and on his special order, the contract is one for work and labour, and not of sale; but that if the property ordered is exactly such as the seller makes and keeps on hand for sale to anyone, and no change or modification of it is made at the buyer's request, it is a contract of sale, even though it may be entirely made after, and in consequence of, the buyer's order for it. It has also been held that if the property is in existence at the time of the contract for its transfer it is a sale although the seller is to do work thereon to adapt it to a particular use for the buyer; and the fact that work and labour are to be done on, or in connection with, material sold as an incident to, or in connection with, the transfer of title does not rob the transaction of its essential characteristics of a sale if the whole or any measureable part of the consideration for the performance of the contract is compensation for the material.
7. Tested on the principles noticed above, it is difficult to accept the contention of the Government Pleader that supply of bill books, vouchers, letter heads, visiting cards, etc., by a printer should always be regarded as sale, on the authority of P. T. Varghese  37 STC 171. The decision cannot be construed as laying down any such inflexible rule. Paragraph (10) of the judgment shows that the distinction between works contract and contract for sale was examined in the proper perspective; and so far as the conclusion on certain transactions was concerned, the Court did no more than decline to intefere with the findings of the Appellate Tribunal. There could be no absolutes in the area of a mixed question of fact and law. In Hameed Bharath Press v. State of Tamil Nadu  54 STC 379 the printer and the customer had entered into an agreement with certain deeming provisions about transfer of the material used for printing; but the Tribunal refused to accept them at their face value and held that the transaction was a sale. The High Court declined to interfere with this finding. But in Court Press Job Branch v. State of Tamil Nadu  54 STC 382 the same High Court held that supply of printed wedding cards, bills, ledger, letter heads, etc., could not be regarded as sale of finished products for the only reason that paper was supplied by the printer himself and the value of the material and charges for the work were separately accounted for. The Court noticed that the articles could not have been sold to any other customer, they had no independent commercial value. The same test of marketability was applied by the Madhya Pradesh High Court in Commissioner of Sales Tax v. Ratna Fine Arts Printing Press  56 STC 77 wherein it was said:
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.
The lines of enquiry or the principles applied in all these cases were more or less the same, but the conclusions reached were different because the facts and circumstances attending the different transactions were different.
8. On an examination of the orders impugned in these revisions we are satisfied that the Tribunal has only attempted to trace the development of case law after P. T. Varghese  37 STC 171 and apply the principles deducible therefrom to the facts presented before it. We are also satisfied that no mistake has been committed either in ascertaining the facts or in applying the relevant principles of law. But we hasten to add that its conclusions cannot be treated as laying down inflexible rules applicable to all transactions of a similar nature where the attendant facts may be different. And subject to this clarification, we dismiss the revisions without any order as to costs.