Photographic processing tax entry upheld where levy is confined to works contracts and transfer of property in goods.

Entry 25 of the Sixth Schedule to the Karnataka Sales Tax Act, 1957 is valid where, read with Section 5-B and Article 366(29A)(b), it taxes only the transfer of property in goods involved in execution of a works contract. It does not authorise levy on pure photographic services or on skill and labour alone. The assessing authority must determine, on the facts and returns in each case, whether the work involved such a transfer of property in goods. The constitutional challenge therefore fails because the entry can operate only within the limits of works contract taxation and does not extend to service activity as such.

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Issues: Whether entry 25 of the Sixth Schedule to the Karnataka Sales Tax Act, 1957, which taxes processing and supplying of photographs, photoprints and photo negatives, is unconstitutional as being beyond the competence of the State Legislature.

Analysis: Article 366(29A)(b) of the Constitution of India permits taxation on the transfer of property in goods involved in the execution of a works contract. Section 5-B of the Karnataka Sales Tax Act, 1957, likewise fastens tax liability only on the taxable turnover of transfer of property in goods involved in the execution of works contracts. Entry 25, when read with Section 5-B, does not authorise levy on the rendering of photographic services or on skill and labour alone; it operates only where, on the facts of a particular case, there is a transfer of property in goods used in the work. The existence or absence of such transfer must be examined by the assessing authority on the basis of the returns and the nature of the work done. The entry is therefore not invalid merely because some photographic activities may amount to pure service or may not in every case involve a works contract. The reasoning in the earlier photographer cases did not displace the post-amendment position under Article 366(29A)(b), and the approach that processing and supplying of photographs can, in appropriate cases, involve a works contract was accepted.

Conclusion: Entry 25 of the Sixth Schedule is constitutionally valid and the challenge to it fails.

Final Conclusion: The writ petitions were not successful on the constitutional challenge, though the petitioners were granted liberty to pursue appropriate statutory remedies against the assessment and related proceedings within the time allowed.

Ratio Decidendi: A taxing entry dealing with photographic processing is valid if, read with the charging provision, it is confined to transfer of property in goods involved in execution of a works contract and does not tax pure services.

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