Consumables in photographic work contract are not separate taxable sales when the materials are used up in the process.

Chemical used in developing photographs and left-over paper cuttings arising in the photographic process were treated as consumables or wastage, not as separate taxable sales. The chemical was consumed in producing the developed photograph and was not independently supplied to the customer, while the trimmed paper remained paper and did not become a new commercial commodity. The activity was characterised as work and labour, so the cost of consumables used in that process could not be taxed again merely because they formed part of the final output. Where tax had already been paid on the purchased materials, no further sales tax was leviable on the disputed items.

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Issues: Whether sales tax was leviable on the chemical used in developing photographs and on the left over paper cuttings/wastage arising from photographic papers.

Analysis: The assessee had already paid tax on the chemical and photographic papers purchased. The chemical was consumed in the photographic process and did not constitute a separate sale to the customer; what was supplied was the developed photograph, not the chemical. The paper cuttings remained paper even after trimming to size and did not bring into existence a new or commodity. The activity was essentially one of work and labour, and the cost of consumables used in such process could not be treated as taxable sale merely because they were used in producing the final photographs. Since tax had already been paid on the purchased goods, the alleged resale of cuttings could not be subjected to tax again.

Conclusion: No sales tax was leviable on the chemical or on the paper cuttings. The question of law was answered against the Revenue and in favour of the assessee.

Final Conclusion: The revision failed because the disputed items were treated as consumables or wastage not constituting independent taxable sales in the photographic work process.

Ratio Decidendi: Consumables used in the execution of a photographic work contract, and paper cuttings that do not emerge as a new commercial commodity, do not amount to separate taxable sales when tax has already been paid on the purchased materials.

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