Sale of goods versus works contract: supply of photographic blocks was held taxable as a sale, not labour-only work.

The supply of photographic blocks was treated as a sale of goods because the substance of the transaction was manufacture and delivery of a finished movable article for a composite price. The court held that the labour element was incidental, the finished block had an independent existence as goods, and property passed for consideration; it was therefore not a works contract or a mere rendition of personal skill and labour. Authorities relied on by the assessee were distinguished on facts, while the governing sale-versus-work-contract principle supported sales tax liability. The revision accordingly failed.

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Issues: Whether the supply of photographic blocks by the assessee was a contract of sale exigible to sales tax, or a works contract involving mainly skill and labour and therefore not taxable.

Analysis: The decisive test was whether the substance of the transaction was the production of an article to be sold as goods, or the rendition of work and labour for a customer. The assessee purchased materials, mounted the customers' designs on metal blocks, and sold the finished blocks for a composite price that included the cost of the block and labour. The customer supplied the design, and the assessee did not merely render a personal service or create something whose essence was skill alone. The prior authorities relied upon by the assessee were distinguished on facts, while the earlier local precedent and the principles governing sale versus work contract supported the view that the finished block had separate existence as goods and that property passed for a price.

Conclusion: The transaction was a sale of goods and not a works contract; liability to sales tax was upheld, and the revision failed.

Ratio Decidendi: Where the substance of the contract is the manufacture and supply of a finished movable article for a price, with the labour component being incidental and the article having independent existence as goods, the transaction is a sale and not a contract for work and labour.

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