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TMI Blog2012 (10) TMI 262X X X X Extracts X X X X X X X X Extracts X X X X ..... a partnership concern of Sanat Kumar Dey. The appellant in the third appeal is Sanat Kumar Dey. All the appellants, therefore, are really one and the same. 3. The appellants carry on the business of developing exposed photographic film rolls into negatives and then processing the negatives into positive photographs. They also process negatives received by them from customers into positive photographs. The developing and processing is done on a job work basis and, according to the appellants, it does not involve any sale of goods or transfer of property in goods. The appellants, it appears, are not in the business of being commissioned to take photographs or processing them. 4. According to the respondents, the appellants' transactions fa ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... transfer of property in goods (whether as goods or in some other form) involved in the execution of a works contract. Article 366 (12) of the Constitution defines "goods" as including all materials, commodities and articles. 8. The Assam General Sales Tax Act, 1993 defines a works contract in Section 2(38). We are concerned with Clause (iv) thereof. Section 2(38)(iv) of the Act reads as follows :- "2. In this Act, unless the context otherwise requires,- (38) "works contract" means and includes any agreement for carrying out - (i) ..... (ii) ....... (iii) ....... (iv) The fitting out or fabrication, assembling, altering, or reassembling, blending, furnishing, improving, processing or otherwise treating or adapting any goods" "Goods" ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... erred, delivered, stored and possessed. There is, therefore, no doubt that to qualify as "goods" an item must have some utility and must be marketable. Applying this test, the Supreme Court held that electromagnetic waves are not "goods". They cannot be delivered or possessed and they are not marketable. 12. The question that now arises is whether exposed photographic film rolls and negatives are goods? The answer must be a firm "No". Exposed photographic film rolls and negatives per se have absolutely no utility for anyone - not even for the owner. Furthermore, no one goes to the market (or anywhere else for that matter) to buy an exposed photographic film roll or negatives. It is only when they are developed or processed, as the case ma ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... urge that there is a "sale" of chemicals within the meaning of the Act. 16. Finally, it was sought to be urged on behalf of the respondents that Section 8 of the Act provides that the tax leviable under Section 7 thereof shall be charged on the taxable turnover during the relevant year on the transfer of property in goods. Our attention was drawn to Clause (e) of Section 8(1) of the Act and this reads as follows:- "8. (1) The tax leviable under Section 7 for any year shall be charged on the taxable turnover during such year- (a) ......... (b) ......... (c) ......... (d) .......... (e) in respect of any transfer of property in goods (whether as goods or any other form) involved in a works-contract of the n ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... l arise. 19. The above discussion undoubtedly leads to only one conclusion which is that the conversion of exposed photographic film rolls into negatives and then into positive photographs or the conversion of negatives into positive photographs is nothing but a rendering of service specific to a customer and is a matter of skill and expertise of the developer - it is not a works contract. 20. Learned counsel for the appellants sought to further buttress her case by relying on Studio Sujata v. Commissioner of Sales Tax, MANU/OR/0142/2008. In this case, the question framed for consideration was whether the Sales Tax Tribunal was right in holding that sales tax is leviable on photographs as execution of works contract. The learned Judges an ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the Report, the Supreme Court held: "After the Forty-sixth Amendment, the sale element of those contracts which are covered by the six sub-clauses of clause (29-A) of Article 366 are separable and may be subjected to sales tax by the States under Entry 54 of List II and there is no question of the dominant nature test applying. Therefore when in 2005 C.K. Jidheesh v. Union of India, (2005) 13 SCC 37 held that the aforesaid observations in Associated Cement, (2001) 4 SCC 593 were merely obiter and that Rainbow Colour Lab was still good law, it was not correct. It is necessary to note that Associated Cement did not say that in all cases of composite transactions the Forty-sixth Amendment would apply." The Supreme Court made it clear that the ..... X X X X Extracts X X X X X X X X Extracts X X X X
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