High Court: Photography services not works contract under Bihar Finance Act, 1981. Sales tax orders set aside.

The High Court of Patna ruled in favor of the petitioner, holding that the photography services provided by the petitioner in his studio do not constitute works contract under the Bihar Finance Act, 1981. The court found that the State erred in imposing sales tax on the photography contracts for the periods 1986-87, 1989-90, and 1990-91. Consequently, the court set aside the orders of the assessing officer that levied sales tax on the photography contracts for these periods.

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Issues: Whether the receipts from photographic work done by the petitioner constituted a works contract liable to sales tax under section 3 of the Bihar Finance Act, 1981.

Analysis: The levy was confined to the photographic activity and not to the determination of the taxable turnover as a whole. The Court applied the principle that a photographer's work is essentially a service contract and that any transfer of paper, chemicals, or other material is merely incidental and not the primary object of the transaction. Relying on the settled legal position that sales tax cannot be imposed on a works contract simpliciter where no sale of goods, actual or deemed, is primarily intended, the impugned levy was held unsustainable.

Conclusion: The photographic receipts were not exigible to sales tax as works contracts, and the levy was quashed in favour of the assessee.

Ratio Decidendi: A photographic assignment is a service contract, and incidental transfer of material does not convert it into a works contract liable to sales tax.

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