Photographer liable for sales tax on photo sales; contract deemed sale of goods, not services.

The court held that the professional photographer was liable to pay sales tax on the sale of photographs to customers as the essence of the contract was the supply of finished goods, not just the provision of skilled services. The court differentiated the case from previous precedents and emphasized that the primary objective was commercial sale, not artistic creation. Judge Kanhaiya Singh concurred with the decision, ruling against the petitioner and in favor of the State of Bihar, who was awarded costs.

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Issues:
Assessment of sales tax on a professional photographer for the sale of photographs to customers under the Bihar Sales Tax Act.

Analysis:
The petitioner, a professional photographer, contested the assessment of sales tax on the sale of photographs to customers, arguing that it did not amount to the sale of goods but was a contract for work and labor. The petitioner relied on the case of Robinson v. Graves to support this argument. However, the court differentiated the present case from Robinson v. Graves, emphasizing that the petitioner's primary objective was to produce photographs for sale commercially, not for artistic purposes. The court cited Lee v. Griffin to establish that contracts resulting in the sale of a chattel constitute a sale of goods, not work and labor. The court highlighted the distinction between contracts for the sale of goods and contracts for work and labor, emphasizing that the substance of the contract determines its nature.

The court further referenced the decision in Clay v. Yates, which was later doubted and distinguished in Lee v. Griffin. The court also cited the case of North Bengal Stores, Ltd. v. Member, Board of Revenue, Bengal, where it was held that a chemist dispensing prescriptions was engaged in the sale of goods. Additionally, the court referred to the case of D. Masanda and Company v. Commissioner of Sales Tax, where a photographer was assessed for sales tax under the Madhya Bharat Sales Tax Act, establishing that the substance of the contract was the supply of finished goods. The court also cited the case of Federal Commissioner of Taxation v. Riley, where photographs taken and supplied to clients were considered "goods manufactured" for sales tax purposes.

Ultimately, the court held that the petitioner, in this case, was liable to pay sales tax on the sale of photographs to customers, as the essence of the contract was the supply of finished goods, not just the provision of skilled services. The court answered the question of law against the petitioner and in favor of the State of Bihar, requiring the petitioner to pay the costs of the reference.

Judge Kanhaiya Singh agreed with the decision, and the reference was answered accordingly.

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