2009 (1) TMI 818 - HC - VAT and Sales Tax

Summary

Issues:
Interpretation of entry 6 of Schedule A of the Punjab General Sales Tax Act, 1948 regarding the classification of graphic art films for taxation purposes.

Analysis:
The case involved a dealer engaged in the resale of graphic art films who contested the assessment treating graphic film as a photographic film under entry 6 of Schedule A of the Act. The dealer argued that graphic art films should not be classified under Schedule A and taxed at a higher rate. The Tribunal upheld the tax levy at 10% under entry 6, rejecting the dealer's contentions that graphic art films were not used by photographers and were distinct from photographic films.

The court examined entry 6 of Schedule A which includes "photographic and other cameras and enlargers, lenses, films and plates, papers and cloth." It observed that graphic art films differ significantly from photographic films, as highlighted by a reference to the Focal Encyclopedia of Photography. The court noted that graphic art films are used for producing positives and negatives, distinct from the equipment listed in entry 6. It cited a West Bengal Taxation Tribunal case supporting the view that if a camera is not considered photographic, its film should not be classified under entry 6.

The court concluded that graphic art films do not fall within the scope of entry 6 of Schedule A, as they are not covered by the expression "photographic and other cameras and enlargers." The court emphasized that graphic art films are a separate category from photographic films and should not be taxed at the higher rate applicable to Schedule A items. Therefore, the judgment favored the dealer, ruling against the Revenue and in favor of the assessee.

In summary, the judgment clarified the distinction between graphic art films and photographic films, emphasizing that graphic art films should not be classified under entry 6 of Schedule A of the Act. The decision provided a detailed analysis based on the nature and usage of graphic art films, ultimately ruling in favor of the dealer's position regarding the taxation of these films.