TMI Blog1996 (8) TMI 505X X X X Extracts X X X X X X X X Extracts X X X X ..... grapher's job are not transferred by the theory of accretion or by accession within the meaning of section 6D read with section 2(b) of the Bengal Finance (Sales Tax) Act, 1941. The customers are interested in the work of art and skill involved in photographic processing and not in the paper or the chemical used for the same, nor do customers pay separately for the materials and the labour involved. Hence, there is no element of sale of goods, as such, associated with such photographic activities. However, under a mis-conception, in the absence of proper legal advice, the applicant registered himself under the Bengal Finance (Sales Tax) Act, 1941 (in short, "the 1941 Act") and went on paying tax on his business transactions with the customers. The Commercial Tax Officer (hereinafter referred to as "the respondent No. 1") ignored the Supreme Court's decision in B.C. Kame's case [1977] 39 STC 237, whereby photographic activities like those of the applicant were declared as contract for work and not contract for sale. When the assessment for the four quarters ending on March 31, 1993 was in progress, the West Bengal Taxation Tribunal's decision in Studio Kamalalaya's case [1993] 89 ST ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ure. It is not correct to say that any tax was levied on the job relating to photo taking or processing, developing, printing and enlarging from the customer's negative, or for chemicals and papers used for the purposes. As a registered dealer, the applicant has been enjoying the facility of declaration forms and been paying taxes. The ratios of the two reported decisions relied on by the applicant are distinguishable and have no application to the matters involved in the impugned assessment order. The assessments for the periods anterior and posterior to the period of impugned assessment are irrelevant for the adjudication of the matter in dispute in this case. The story of demand of tax and threat by the respondent No. 1 is untrue. The assessment for the period of four quarters ending on March 31, 1993 was completed within the time prescribed under the law. It is, therefore, a fit case for dismissal. 3.. The applicant has filed an affidavit-in-reply to traverse the points raised by the respondents in the affidavit-in-opposition. Besides the reiteration of what has been stated in the original application, the applicant adds that even assuming that he was engaged in making of i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... skill and labour, it is not understood why the same consideration would not apply to the jobs of making cinema slide, etc. For better appreciation of the jobs involved in making "cinema slide, etc." I quote below contents of the sheets marked "X": "Cinema slides: Cinema slides are prepared from the art work supplied by the customers according to their requirements. The procedures for preparation of cinema slides are as follows: 1.. The first step is to determine the character of the art work supplied by the customers. 2.. Secondly, as soon as the character of art work is determined, materials for preparation of cinema slides are selected. Suppose, if the character of the art work is half-tone, pan film is used in the camera as the material for getting the negatives. On the other hand, if the character of the art work is line, ortho film is used in the camera as the material for making negatives. After the films are loaded in the camera, the picture of the art work is taken by using the camera and thus the film loaded in the camera is exposed. 3.. Thirdly, after the film is exposed, various processing is done on the exposed film by using chemicals which are unidentifiab ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Robinson v. Graves [1935] All. ER 935 and observed: "It was thought for many years that Lee v. Griffin (1861) 30 L.J.Q.B. (N.S.) 252; (1861) 1 B S 278 laid down that, if a contract would result in the transfer of property in goods from one party to another, then it must be a contract of sale. This view was exploded in Robinson v. Graves [1935] 1 KB 579 at 587; [1935] All ER 935, where it was held that a contract to paint a portrait was a contract for skill and labour and not a contract for sale of goods, despite the fact that it was the object of the contract to transfer the property in the completed protrait to the defendant. Greer, L.J., stated the law as follows: If the substance of a contract.............. is that skill and labour have to be exercised for the production of the articles and ..............it is only ancillary to that that there will pass from the artist to his client or customer some materials in addition to the skill involved in the production of the portrait, that does not make any difference to the result, because the substance of the contract is the skill and experience of the artist in producing the picture. Keeping the above principle in view, we may ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t, therefore, held that supply of printed material to the MPEB by the applicant was not a sale but a works contract. 9.. The most significant decision in regard to the nature of photographic activities is that of this Tribunal in the case of Studio Kamalalaya v. Commercial Tax Officer [1993] 89 STC 307. In the said decision, the definition of the works contract as given in section 2(b) of the 1941 Act was scanned vis-a-vis the jobs involved in "photographic activities". In this judgment, the Tribunal concluded that an essential element of works contract as defined in section 2(b) is missing from the aforesaid photographic activities. We quote below some relevant excerpts from the judgment for the fuller appreciation of the points involved. "In other words clauses (i), (ii) and (iii) of section 2(b) envisage works contracts relating to immovable or movable properties, but in each case the immovable or the movable property must belong to a person other than the contractor. Put differently, in all these three cases works contracts have been contemplated as additions, accretions or accessions to immovable or movable properties of the specified categories, belonging to persons other ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tion 6D of the 1941 Act. 11.. We have already seen in paragraph 5 above the nature of job involved in "making cinema slides, etc." The factors like the primacy of skill and labour, ancillary passing of some material in addition to such skill, the insignificant value of the materials compared to the degree of labour and skill, etc., which segregates "the photographic activities" from the transactions exigible to sales tax, pervades in equal measure of the job of "making cinema slides, etc." Therefore, in view of the principles laid down in the abovementioned reported decisions there can hardly be any dispute that the job of "making cinema slides", etc., cannot be regarded as contract for sale. Moreover, in the light of the decision in Studio Kamalalaya's case [1993] 89 STC 307 (WBTT) such jobs cannot also be considered as works contract and hence not exigible to sales tax. 12.. It may, however, be pointed out that in the tax imposed under the impugned assessment order, there are three distinct elements constituting the total tax, viz., taxes on activities covered by (1) section 5(1)(aa), (2) section 5(1)(bb) and (3) section 5(1)(e). Therefore, the impugned assessment is bad on ..... X X X X Extracts X X X X X X X X Extracts X X X X
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