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2015 (4) TMI 526 - HC - VAT and Sales TaxLevy of sales tax on chemical used in development of photographs - whether the chemical which is being used for developing photos by processing the chemical is not transferred through which the resultant photos came into existence and it is not a sale - Held that:- Tax Board has rightly come to the conclusion that there is no justification in levy of sales tax on the two items namely; (i) chemical (ii) photographic paper left over/cuttings of photographic paper. In so far as the chemical is concerned, it has rightly been held that whatever chemical was purchased, was duly tax paid and the chemicals having been used in the printing/developing the photograph cannot be said that it was a sale as such to the consumer of chemicals and what was sale, was a photograph duly developed and not chemical. It is an admitted fact that the photographs are developed primarily on account of the chemicals being used and either it was used in entirety or if some chemical remained after certain time, it had to be destroyed or could not have been re-used after certain processes. One cannot hold that chemical has been sold to the consumers. Similarly the paper cuttings which remained after proper sizing as such no new item came to existence, a paper would remain a paper whether after cutting of the corners or otherwise and thus no new item can be said to be produced merely because photographs are prepared in different shapes and sizes according to the direction of the consumer. - The contract is to be seen as one of work and labour and in my view, whatever chemical has been used, cannot be said to be sale directly or indirectly to the customers by the assessee. Paper cuttings even after the paper being cut to size, remain a paper may be out of a full sized paper only some cuttings remain after the photograph being cut according to size. Therefore, a paper would remain a paper even after making into different sizes and it is also an admitted fact that on both the items, the assessee has paid due tax, therefore, even if the paper cuttings have been sold to a third party when due tax has been paid, in my view, sales tax is not liable to be paid again. - Decided against Revenue.
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