TaxTMI 
TaxTMI 
2011 (4) TMI 1229
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....ion of law: "Whether the order of the Tribunal holding that the transaction pertaining to taking of photograph, developing and printing is works contract following [2000] 118 STC 9 (SC) (Rainbow Colour Lab v. State of Madhya Pradesh) is legally sustainable in view of the subsequent judgment rendered in [2001] 124 STC 59 (SC) (Associated Cement Companies Ltd. v. Commissioner of Customs)? The respondent/assessees carry on business of running photo studio, taking photographs, developing the negatives and giving positive prints. As against the assessment orders passed, the assessee in each case went on appeal before the Appellate Assistant Commissioner, contending that there was no outright sale of the developed positive prints; consequently,....
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....C) and held that the activity of the photo studio could not be assessed under the TNGST Act. As regards developing the negative and printing charges, the Tribunal held that by virtue of the law laid down by the apex court as referred to above, no assessment could be made. Even though, the assessee has not filed any appeal, it was for the assessing officer to decide as to whether it was taxable or not. Thus, the Revenue's appeals were dismissed. The Tribunal also rejected the Revenue's prayer for restoring the penalty. Aggrieved by the same, the present tax case (revision) petitions are before us. The learned Special Government Pleader appearing for the Revenue placed before us the decision reported in [2008-09] 14 TNCTJ 81 (R. Mini Colour ....
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....ract into two separate contracts by a legal fiction: (i) contract for sale of goods involved in the said works contract, and (ii) for supply of labour and service. This division of contract under the amended law can be made only if the works contract involved a dominant intention to transfer the property in goods and not in contracts where the transfer in property takes place as an incident of contract of service. The amendment, referred to above, has not empowered the State to indulge in microscopic division of contracts involving the value of materials used incidentally in such contracts. What is pertinent to ascertain in this connection is what was the dominant intention of the contract. Every contract, be it a service contract or otherw....
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....lenged the turnover on taking photographs and sitting charges. We do not find that this objection could be sustained. A reading of the grounds of revision shows that the Revenue has not restricted the challenge in the tax case (revisions) before us to only one aspect of the transaction, namely, taking positive print outs of the negatives supplied by the assessee. The grounds covered both transactions, including taking of photographs and sitting charges, as well as developing negatives and making positive prints out of it. We find, both cases fall under the concept of works contract to be considered under section 3B of the TNGST Act. In the circumstances, applying the decision of this court reported in [2008-09] 14 TNCTJ 81 (R. Mini Colour....