TMI Blog2000 (2) TMI 2X X X X Extracts X X X X X X X X Extracts X X X X ..... mpliciter in the guise of the expanded definition found in Article 366(29A)(b) read with Section 2(n) of the State Act. On facts as we have noticed that the work done by the photographer which as held by this Court in Kame's case ( 1976 (12) TMI 164 - SUPREME COURT OF INDIA ), is only in the nature of a service contract not involving any sale of goods, we are of the opinion that the stand taken by the respondent-State cannot be sustained. Appeal allowed by setting aside the judgment under appeal and grant the prayer of the appellants by quashing the assessment orders and the demand notices impugned in the writ petitions before the High Court. - Civil Appeal Nos. 5350-5351 of 1997 & others - - - Dated:- 2-2-2000 - BHARUCHA S.P. AND S ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tion before the M.P. High Court primarily contending that the work done by them is only a service contract, out of their skill and labour and there was no element of sale involved in their work, hence their turnover was outside the levy of sales-tax. 5.The High Court, however, relying on the judgment of this Court in Builders Association of India Ors. v. Union of India Ors. [1989 (73) STC 370] held that, to the extent of the photo paper used in the printing of positive prints by the appellants in their work, there is a transfer of property in goods. Therefore, to this extent, the job done by the appellants becomes a works contract as contemplated under Article 366(2A)(b) of the Constitution and as incorporated in Section 2(n) of th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... , find no cogent ground to disagree with the High Court in so far as it has decided against the revenue and has held the contract to be one for work and labour. 11.Since this was a judgment rendered prior to the coming into force of the 46th Constitutional Amendment, we will have to consider whether the said Amendment has brought about any change so as to doubt the legal position enunciated in the above case. It is true that by the 46th Constitutional Amendment by incorporating Clause 29A (b) in Article 366, the definition of the words sale and works contract have been enlarged. The State of Madhya Pradesh has also brought about a consequent change in the definition of the word 'sale' in Section 2(n) of its Sales Tax Act but ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... in such contracts. This is clear from the judgment of this Court in Hindustan Aeronautics Ltd. v. State of Karnataka [1984 (55) STC 314 at 322] where it was held thus: ........Mere passing of property in an article or commodity during the course of performance of the transaction in question does not render the transaction to be transaction of sale. Even in a contract purely of work or service, it is possible that articles may have to be used by the person executing the work, and property in such articles or materials may pass to the other party. That would not necessarily convert the contract into one of sale of those materials. In every case, the Court would have to find out what was the primary object of the transaction and the inten ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rther processing belongs to the photographer and not to the customer. No basic goods are provided by the customer which is subjected to processing, etc., by the photographer so as to make the contract a works contract. There is no accretion to goods or property or the nucleus of a property which originally belonged to the customer. There is no works contract involved in this category of a photographer's activity. However modernised the camera be, the skill of the photographer is still important for getting the best results. It cannot also be treated as a 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. What is expected fr ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... o a separate entry in List II of the Seventh Schedule to the Constitution enabling the States to levy tax on sales and purchases independent of entry 54 thereof. As the Constitution exists today the power of the States to levy taxes on sales and purchases of goods including the deemed sales and purchases of goods under clause (29A) of Article 366 is to be found only in entry 54 and not outside it. We may recapitulate here the observations of the Constitution Bench in the case of Bengal Immunity Co. Ltd. - 1955 (6) STC 446; (1955) 2 SCR 603 in which this Court has held that the operative provisions of the several parts of Article 286 which imposes restrictions on the levy of sales tax by the States are intended to deal with different topic ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
