TMI Blog1994 (11) TMI 402X X X X Extracts X X X X X X X X Extracts X X X X ..... 39 STC 237. 3.. Photography is the art of fixing an optical image by photochemical means. The word photography means "drawing a picture with light". The picture is "drawn" by the glass lens in the front of the camera and is recorded on the light sensitive chemicals on the roll of film. A surface which is sensitive to light is the most important component of photography. Even though some 2000 years ago such surfaces were used for decorative purposes in China and the effects of light on some such substances were studied by the Arabs in the Middle Ages, Europe started to take interest in this subject only by about 1550. It was at that time "camera obscura" had been fitted with a lens by Giambattista della Porta. The modern word camera for a photographic apparatus is derived from the Latin "camera obscura" meaning "darkened room". Research was going on as to how the images coming through the lens could be fixed, and this became theoretically possible when J.H. Schulze observed the blackening of silver salts by sunlight in 1727. Further developments were made in this area by the research of K.W. Scheele and William Lewis and thereafter by Thomas Wedgwood. It was in 1835, William H. Fo ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r customers, develop the negatives and handover positive prints to the customers or when they develop the exposed negatives brought by the customers and supply them positive prints, or when they take positive prints from the negatives brought by the customers, the contract between them and the customer is for service by the photographer to bring about a desired result and no part of the contract is exigible to sales tax. According to them, the 46th Constitutional amendment has not brought about any change in the matter of exigibility to sales tax as far as photographic work is concerned from the position as it obtained at the time of the decision of the Supreme Court in Assistant Sales Tax Officer v. B.C. Kame [1977] 39 STC 237. We must make it clear that the above was the only question argued before us by the petitioners, even though they have challenged the 46th amendment of the Constitution and certain provisions of the Kerala General Sales Tax Act and Rules relating to the computation of value of the property in the goods transferred in the execution of works contract. 6.. The challenge against the constitutional amendment is no longer available to the petitioners in view o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e negative, or do other photographic work and thereafter supply the prints to his client, he cannot be said to enter into a contract for sale of goods. The contract on the contrary is for use of skill and labour by the photographer to bring about a desired result. The occupation of a photographer, except in so far as he sells the goods purchased by him, in our opinion, is essentially one of skill and labour. A good photograph reveals not only the aesthetic sense and artistic faculty of the photographer, but it also reflects his skill and labour. A good photograph in most cases is indeed a thing of beauty. It not only seeks to mirror and portray a scene from actual life, but it also catches and preserves for the future what belongs to and is a part of the fleeting moment. The ravage brought about by the passage of time, the decay and the ageing process which inevitably set in as the years roll by leave what is preserved in the photograph unaffected. It is no wonder that an old photograph revives nostalgic memories of days no more, but to which we look back through the mist of time with fondness even though such fondness has a tinge of sadness. We, therefore, find no cogent gro ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... contract' includes any agreement for carrying out for cash or for deferred payment or other valuable consideration the construction, fitting out, improvement, repair, manufacture, processing, fabrication, erection, installation, modification or commissioning of any movable or immovable property." 11.. It is contended by the petitioners that none of the three categories of the photographic work undertaken by them, would come within the term "works contract" as defined in the Act as it does not involve construction, fitting out, improvement, repair, manufacture, processing, fabrication, erection, installation, modification or commissioning of any movable or immovable property. The contract between them and the customer is only that of skill and labour in the nature of a service contract. Passing of property in the photographic paper while handing over the positive prints is only incidental to the contract of service and that the concept of the deemed sale has no application in the nature of the transaction. A customer approaching a photographer to take photos and get the photo prints, has no intention of buying a photograph. Apart from the above, it is contended that the general t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... agistrate, Cuttack [1990] 77 STC 199 which related to photographic work and which followed the Supreme Court decision in Kame's case [1977] 39 STC 237. We find none of these decisions will be of any help to the petitioners for two reasons. Firstly, in none of these cases, the assessees had taken a contention that their activities would not come within works contract. Their endeavour was to establish that there was no sale of goods taking place as part of the transactions. Secondly, these decisions were rendered before the 46th constitutional amendment which had the effect of disintegrating an indivisible works contract. 13.. It is the case of the Revenue that the photographic work undertaken by the petitioners would directly come within the term "works contract". The photographer's work is not based exclusively on his artistic skill. Even if it is admitted for arguments sake that for taking good photograph, some amount of skill is necessary, it is not so in the case of the further processing or taking positive prints or additional copies, especially due to the availability of highly sophisticated cameras and other accessories used by the photographers in their work. When photogra ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... est, it cannot be held that there is any works contract involved in the first category of petitioners' activity. It cannot also be treated as sale of the photograph for the reason that it is not the intention of the customer to buy a photograph from the photographer. The photograph has no marketable value. 16.. The development achieved in the field of photography during the last about hundred and fifty years is tremendous. When the Daguerreotype portrait was exhibited in Paris in 1839 and later in 1840 in Berlin and New York it is true that like an epidemic-which was called by the press as "Daguerreotypemania", the idea of photography spread on both sides of Atlantic. But, it would have been an agony for the sitter for a daguerreotype portrait to go through the process of being photographed and the skill and patience required of the photographer was also of a very high quality. The sitter for daguerreotype portrait had to remain perfectly still for half an hour, or sometime, up to one hour and the photographer's chairs were devised in such a way that the subject was prevented from moving his head by a set of three adjustable points, one at each side behind the ears and one behind ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... contract. We, therefore, find that no portion of the turnover of the petitioners relating to the first category of work would be exigible to sales tax. 18.. The second and third categories of work can be considered together. The petitioners undertake to develop exposed film handed over by the customer and take positive print. They also receive processed negative from the customer, and take positive prints therefrom. In these two cases, the developed negatives along with the positive prints are delivered to the customers. Sometimes, the work of enlargement is also taken up along with the above work. When such a work is done by the photographer, can it be said that there is no movable property of a person other than photographer with reference to which the work is executed? The property is the exposed film in the second category and the developed negative in the third category, which belong to the customer and which is handed over to the photographer to work upon it. The petitioners would contend that developing an exposed roll of film and taking positive prints therefrom would not come within any of the activities mentioned in the definition of "works contract" under section 2(xx ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t be compared to the artistic skill or talent necessary for taking a good photograph or painting a good portrait. In B.C. Kame's case [1977] 39 STC 237 the Supreme Court considered only the first category of work, namely, taking a photograph of the customer developing the negative and taking a positive print. The second and third type of activities were not specifically considered by the Supreme Court. Therefore, we are of the view that in the nature of the activities under the second and third categories, they would come within the fold of works contract and not contract of service. 22.. In O.P. No. 892 of 1988, a statement showing the rate at which photographic work coming under the categories one and two are charged in petitioner's studio is filed. For taking a photograph in post card size during the assessment years 1984-85, 1985-86 and 1986-87, the petitioner charged at the rate of Rs. 40, Rs. 45, and Rs. 50 respectively. Out of the above, value of photographic paper would come to Rs. 3.06, Rs. 3.33 and Rs. 4.12 respectively. For taking passport size photograph, petitioner charged during 1984-85, 1985-86 and 1986-87, at the rate of Rs. 25, Rs. 30 and Rs. 35. The value of pho ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ces also. In the light of our finding as above, we set aside these assessment orders and direct the assessing authorities to proceed with the assessment afresh, in the light of the observations and directions contained in this judgment as well as the judgment of the Full Bench in Moidoo's case [1995] 97 STC 1 (Ker) supra; [1994] 2 KLT 251. In O.P. Nos. 892 and 971 of 1988, petitioners have taken an additional contention that being small-scale industrial units, they are entitled to certain exemptions from payment of sales tax. These aspects will also be considered by the assessing authority at the time of finalising their assessment. The rate and point at which tax can be levied in respect of the material involved in the deemed sale are also matters to be considered by the assessing authority. The principles laid down by the Supreme Court in the decisions in [1993] 88 STC 204 (Gannon Dunkerley Co. v. State of Rajasthan) and [1993] 88 STC 248 (Builders' Association of India v. State of Karnataka) will be kept in mind by the assessing authorities while finalising the assessment orders. The original petitions stand partly allowed as above. Petitions partly allowed. - - TaxTM ..... X X X X Extracts X X X X X X X X Extracts X X X X
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