Sale of goods test applied to commissioned artistic articles treated as taxable supply of finished products.

Commissioned production of enamelled colour photographs on copper plates was treated as a sale of goods where the substance of the transaction was supply of finished commercial articles in the course of business. The fact that the items were made to customer order, involved technical skill and artistic elements, and were affected by copyright restrictions did not convert the arrangement into a mere contract for work and labour. The completed product remained taxable under the Bombay Sales Tax Act, 1959 because the dominant element was transfer of a finished article, not personal service.

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Issues: Whether the preparation and supply of enamelled colour photographs on copper plates, made on order from customers, constituted a contract of sale of goods and was liable to tax under the Bombay Sales Tax Act, 1959.

Analysis: The nature of the transaction had to be determined by its substance. Although the process involved skill, technical knowledge, and some artistic elements, the decisive feature was that the applicants produced finished articles intended for supply to customers in the course of their trade. The fact that the article was made to the customer's order and that the materials were only part of a skilled process did not convert the transaction into a mere contract for work and labour. The restriction arising from copyright ownership did not alter the character of the completed transaction as a taxable sale, because the applicants were carrying on the business of producing and selling such articles.

Conclusion: The transaction amounted to a sale of goods and was taxable under the Bombay Sales Tax Act, 1959. The answer to the reference was in the affirmative, against the applicants.

Final Conclusion: The ruling treats commissioned production of an individually customized article as a sale where the dominant element is supply of a finished commercial product rather than rendering of personal artistic service.

Ratio Decidendi: A transaction is a sale of goods, and not a contract for work and labour, when the dominant substance is the supply of a finished article produced in the course of business, even if technical skill and customization are involved.

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