LexM/S ARISTO PRINTERS PVT. LTD. versus COMMISSIONER OF TRADE TAX, LUCKNOW, U.P.
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[2025] 10 S.C.R. 405 : 2025 INSC 1188 M/s Aristo Printers Pvt. Ltd. v. Commissioner of Trade Tax, Lucknow, U.P. (Civil Appeal No. 703 of 2012) 07 October 2025 [J.B. Pardiwala* and K.V. Viswanathan, JJ.] Issue for Consideration Issue arose whether tax can be levied u/s.3F of the Uttar Pradesh Trade Tax Act, 1948, on the ink and processing material used by the appellant in undertaking the printing work of lottery tickets. Headnotes† Uttar Pradesh Trade Tax Act, 1948 – ss.2(m), 3F – Works contract – Tax on the right to use any goods or goods involved in the execution of works contract – Appellant undertaking the printing work of lottery tickets – Levy of trade tax u/s.3F on the ink, chemical and processing material used by the appellant – Tribunal deleted the tax on the value of ink and other processing materials, including chemicals – However, the High Court set aside the order passed by the tribunal – Correctness: Held: Appellant liable to pay tax u/s.3F(1)(b) on the ink and processing material – All three conditions required to sustain a levy of tax u/s.3F(1)(b) are fulfilled: works contract exists for printing of lottery tickets; ink and chemicals have been involved in the execution of the works contract; and the property in the ink and chemicals has been transferred in execution of the works contract – Appellant has admitted that the contract for printing lottery tickets is a works contract – It is clear that the ink, chemical and other processing material were involved in the printing of the lottery tickets – There is a transfer of property in the ink and chemicals used in the printing of the lottery tickets – Works contract is for the printing of lottery tickets, and “the works” refers to the final, tangible printed ticket – Taxable event, or the “deemed sale”, occurs at the precise moment the ink is applied to the paper – This act constitutes “incorporation in the works”, as the ink and the chemicals (with * Author 406 [2025] 10 S.C.R. Supreme Court Reports which the ink is mixed) are involved in the execution of the work contract and become a part of the lottery ticket – In this process, there is a tangible transfer of the diluted ink, a composite good comprising both the ink and the processing chemicals – Transfer of ink and chemicals in their chemically altered form constitutes a valid transfer of property – Thus, since it is impossible to transfer the ink without also transferring the chemicals it is diluted with, it can be conclusively inferred that the property in both the ink and the chemicals has been transferred. [Paras 66-73] Case Law Cited Xerox Modicorp Ltd v. State of Karnataka [2005] Supp. 2 SCR 895 : (2005) 7 SCC 380; Gannon Dunkerley & Co. & Ors. v. State of Rajasthan & Ors. [1992] Supp. 3 SCR 103 : (1993) 1 SCC 364 Larsen and Toubro Limited & Anr. v. State of Karnataka & Anr. [2013] 17 SCR 678 : (2014) 1 SCC 708 – relied on. State of Madras v. Gannon Dunkerley & Co. (Madras) Ltd. [1959] 1 SCR 379 : 1958 SCC OnLine SC 100; Rainbow Colour Lab & Anr v. State of M.P & Ors. [2000] 1 SCR 594 : (2000) 2 SCC 385; Northern India Caterers (India) Ltd. v. Lt. Governor of Delhi [1979] 1 SCR 557 : (1978) 4 SCC 36; Builders Association of India & Ors. v. Union of India & Ors. [1989] 2 SCR 320 : (1989) 2 SCC 645; Kone Elevator India Private Limited v. State of Tamil Nadu [2014] 5 SCR 912 : (2014) 7 SCC 1; State of Karnataka & Ors v. M/s Pro Lab & Ors. [2015] 1 SCR 808 : (2015) 8 SCC 557; Associated Cement Companies Ltd v. Commissioner of Customs [2001] 1 SCR 608 : (2001) 4 SCC 593; Collector of Central Excise, New Delhi v. Ballarpur Industries Limited [1989] Supp. 1 SCR 323 : (1989) 4 SCC 566 – referred to. Commissioner of Sales Tax v. Matushree Textile Limited, 2003 SCC OnLine Bom 830; Enviro Chemicals v. State of Kerala, 2011 SCC OnLine Ker 3685 – approved. Commissioner of Sales Tax, Maharashtra, Bombay v. R.M.D.C. Press Pvt Ltd., 1998 SCC OnLine Bom 435; Pest Control India Ltd v. Union of India & Ors., 1989 SCC OnLine Pat 288; Deputy Commissioner of Sales Tax (Law), Board of Revenue (Taxes), Ernakulam v. M.K Velu, 1993 SCC OnLine Ker 577; Commissioner of Sales Tax, Mumbai v. Hari and Company, 2006 SCC OnLine Bom 1466; Teaktex Processing Complex Limited v. State of Kerala, 2002 [2025] 10 S.C.R. 407 M/s Aristo Printers Pvt. Ltd. v. Commissioner of Trade Tax, Lucknow, U.P. SCC OnLine Ker 720; Commissioner of Sales Tax, Maharashtra State, Bombay
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