Mixed contracts in photography are taxable only for the separate sale element, not for skilled labour and processing work.

Mixed transactions involving labour and materials are taxable as sales only to the extent the parties intended a separate sale of goods. Where the bargain shows that materials are merely ancillary to skilled work, the transaction is not an indivisible sale simply because property in some material later passes. Applying that principle to photographic work, taking photographs and developing negatives were treated as contracts of skill and labour, while supplying finished prints or enlargements was a distinct sale component. A single bill did not alter the severable character of the transaction, and sales tax was confined to the finished prints or enlargements.

---

---

Issues: Whether the photographic transactions in question were entire and indivisible contracts of sale, or whether they embodied distinct and severable contracts of work and labour and sale, so that only the sale component could be taxed.

Analysis: A contract involving both labour and materials is not taxable as a sale merely because property in some material ultimately passes. The decisive enquiry is whether the parties intended an agreement, express or implied, to sell the materials separately, or whether the supply of materials was merely ancillary to the performance of skilled work. Applying that test, the preparation of enlargements, the developing of the customer's film, and the supply of prints were found to be separable activities. The taking of the photograph and developing of the negative were contracts of skill and labour, while the supply of the enlarged photographs or prints on paper of the stipulated size was a distinct sale component. The fact that the transactions were embodied in a single bill did not make them indivisible.

Conclusion: Only the supply of the finished prints or enlargements was liable to sales tax, and the work of taking the photograph or developing the film was not taxable as a sale.

Ratio Decidendi: In a mixed transaction of work and materials, sales tax can be levied only on that part which is shown, on the parties' intention and the terms of the bargain, to be a separate sale of goods; mere passing of property in materials used in executing skilled work is insufficient.

---