Case: Assistant Sales Tax Officer Vs. B.C. Kame, Proprietor Kame

The respondent is the proprietor of Kame Photo Studio. He has apart from his main shop two branches. He carries on business, inter alia, of buying and selling photographic goods. After buying photographic goods he either sells them to his customers or uses them in three ways--(1) in taking photographs and supplying prints thereof, (2) in making enlargements for the clients who bring t heir own negatives, and (3) in preparing positive prints of the same size from the negatives brought by the clients. For doing these various types of works the assessee respondent charges consolidated amount depending upon the work involved and the size and number of prints demanded by the clientThe sales tax authorities assessed the respondent for different periods from April 1, 1964 to March 31, 1969 to sales tax on his turnover on best judgment basis as he had not kept full and complete accounts. It may be convenient to refer to the figures of assessment for one of the years. For the year 1964-65 the total turnover of the respondent was taken to be Rs. 41, 500. Out of this amount a deduction of Rs. 6, 500 was allowed as relatable to developing and enlargement which was considered to be not chargeable to tax. The balance of Rs. 35, 000 was divide d into two parts Rs. 12, 000 being treated as relatable to sale of materials as such and the rest Rs. 23, 000 being taken to be the receipts on account of the supply of photo prints to those who got themselves photographed at the studios.The respondent filed writ petition to challenge the levy of sales tax on the last item, namely, the item for the supply of photo prints. The contention of the respondent was that in taking a photograph, preparing its negative and thereafter the final positive print for supplying the same to the client, the respondent undertakes a contract of work and labour and does not enter into a sale transaction. It was also stated on behalf of the respondent that the prepared positive print was not a marketable commodity and he could not sell the photograph of one person to any other person except with the formers consent. As against that, the case of the appellants was that the respondent was carrying on a commercial activity in the nature of trade and business and the finished photographs supplied by him to his customer was a commodity and the supply of same attracted the levy of sales tax. The High Court, on consideration of the matter, came to the conclusion that the respondent only undertook the contract of work and labour and did not enter in to a sale transaction. The respondent as such was held not liable to pay sales tax in respect of the item to which the writ petition related. The High Court while accepting the writ petition also observed as under:"We may lastly make it clear that in this case we are not called upon to go into the question whether the material used in preparing the photograph is sold and taxable. The petitioner has alleged in the petition that he was paid full tax on the value of such material and the respondents have neither denied the fact nor have claimed tax on such material. We, therefore, express no opinion on that question and need not consider either Masandas case (1957) 8 S TC 370, where the only question referred to this Court was whether such material alone could be taxed, or the observations of the Bombay High Court in Camera House Case (1970)25 STC 354  , about severability of the contract into one separately for service and supply of material."

Court's reasoning:
Keeping the above principles in view, we may now turn t o the facts of the present case. When a photographer like the respondent undertakes to take photograph, develop the negative, or do other photographic work and thereafter supply the prints to his client, he can not 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 aes- thetic sense and artistic faculty of the photographer, 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, it also catches and preserves for the future what belong s 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 un affected. It is no wonder that an old photograph revives nostalgic memories of days no more, but to which we rook back through the mist of time with fondness even though such fondness has a tinge of sadness.We, therefore, 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. Our attention has been invite d during the course of arguments to some decisions of the High Courts. It is, in our opinion, not necessary to deal with those cases because after giving the matter our consideration was are of the opinion, that the view taken by the High Court in the judgment under appeal substantially represents the correct position in law.