TaxTMI 
TaxTMI 
TaxTMI 
2008 (4) TMI 679
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....1-92 have been referred to this honourable High Court in terms of the order of this honourable court dated February 24, 1997. The questions are: (i) Whether, on the facts and in the circumstances of the case, the Tribunal is right to hold that tax is exigible for photographs as execution of works contract? (ii) Whether, on the facts and in the circumstances of the case, the conclusion of the Tribunal is perverse due to non-consideration and misconsideration of facts and law and, therefore, it is liable to be set aside for re-hearing? The materials facts out of which those questions arise are that the petitioner carries on the business of processing and developing photography. In the usual course of business, the petitioner takes photogr....
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....r, Bhubaneswar-II Circle, Bhubaneswar, assessed the petitioner as an unregistered dealer, inter alia, holding that the petitioner is liable to pay sales tax as the petitioner has been alleged to carry activities of "works contract". Therefore, orders of assessment being dated February 29, 1988 for the years 1984-85 (September 1984 to March 1985), 1985-86 and 1986-87 under section 12(5) of the OST Act and under rule 5 of the Orissa Additional Sales Tax Rules, 1975 were passed and a tax of Rs. 20,765 and penalty of Rs. 5,000 totalling to Rs. 25,765 was imposed on the petitioner. The petitioner then filed the first appeal before the learned Assistant Commissioner of Sales Tax. The first appellate authority by an order dated September 27, 1991....
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....y or value to any other person than the customer. By developing such photographs, the petitioner only renders service to his customers. The customer pays for the service rendered by the petitioner. It is the contention of the petitioner that his activity is similar to that of a consulting firm preparing plan and sketches pursuant to client's specification or a professional giving opinion on papers. All those activities are done to serve the client. Therefore, this does not come within the purview of the definition of "goods", "sale", "dealer" or "works contract". It is the petitioner's case that he purchased the goods, namely, papers on payment of sales tax. Further levy of tax on the personal service rendered to the client of the p....
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....aph is purely incidental and payment is only made to get positive prints and not to get the photo papers. Therefore, the contract in-between the petitioner and his client is not a contract of sale, and neither directly or indirectly works contract is involved in the supply of photo papers. Similar view was taken by the West Bengal Taxation Tribunal in the case of Studio Kamalalaya v. Commercial Tax Officer reported in [1993] 89 STC 307. In the case of Bavens v. Union of India reported in [1995] 97 STC 161 (Ker), learned judges held that when a photographer takes a photograph of his customer, he develops the negative and supplies positive prints in the desired size to the customer. In doing so the photographer uses his own camera and his ow....
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....edge that the photo prints supplied by them to their customers are not marketable commodities and as goods they have no value." The honourable Supreme Court in Bharat Sanchar Nigam Ltd. v. Union of India reported in [2006] 3 VST 95; [2006] 145 STC 91 again reiterated the principle in B. C. Kame 's case [1977] 39 STC 237 (SC) and held that the work done by the photographer is only in the nature of a service contract not involving any sale of goods and held that the stand taken by the State cannot be sustained. The learned counsel for the petitioner submitted that the photographs taken by the petitioner are not goods which can be sold and is not a marketable commodity like any other goods. When the copies of photographs are made out, th....