1976 (12) TMI 164 - SC - VAT and Sales Tax

Photographer's artistic work not subject to sales tax under Madhya Pradesh GST Act

The Supreme Court affirmed the High Court's decision that a photographer's supply of photographic prints to clients does not attract sales tax under the ... Whether sales tax is payable by a photographer under the Madhya Pradesh General Sales Tax Act (Act 2 of 1959), when the photographer takes photographs or does other photographic work and thereafter supplies the photographic prints to his client or customer? Held that:- Appeal dismissed. No cogent ground to disagree with the High Court in so far as it has decided against the revenue and has held the contract to be one for work and labour. Issues:1. Whether sales tax is payable by a photographer under the Madhya Pradesh General Sales Tax Act when supplying photographic prints to clients.2. Determining if the contract between a photographer and client is a contract of work and labor or a contract for the sale of goods.Detailed Analysis:Issue 1:The case involved the question of whether a photographer is liable to pay sales tax when supplying photographic prints to clients under the Madhya Pradesh General Sales Tax Act. The respondent, a proprietor of a photo studio, was assessed for sales tax by the authorities based on his turnover. The High Court had ruled in favor of the respondent, stating that the contract between the photographer and client was a contract of work and labor, not a sale transaction. The respondent charged a consolidated amount for various photographic works, and the High Court held that the supply of photographic prints did not attract sales tax.Issue 2:The distinction between a contract of work and labor and a contract for the sale of goods was crucial in this case. The Supreme Court emphasized that the main object of a contract of sale is the transfer of property in a chattel to the buyer. In contrast, a contract of work and labor involves the skill and labor of the service provider without the primary intention of transferring a chattel. The court cited previous cases to support this distinction, highlighting that the nature of the contract depends on the primary object and intention of the parties involved. In the present case, the court found that a photographer's work primarily involves skill and labor to produce desired photographic results, making it a contract of work and labor rather than a sale of goods.The court's decision was based on the principle that a photographer's occupation is primarily one of skill and labor, with the end product reflecting artistic and aesthetic qualities. The court rejected the argument that the supply of photographic prints constituted a sale of goods, emphasizing the artistic and labor-intensive nature of photography. Ultimately, the court upheld the High Court's decision, stating that the contract between the photographer and client was a contract for work and labor, not subject to sales tax. The appeal was dismissed, affirming the judgment in favor of the respondent, without costs.