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TMI Blog1957 (2) TMI 52X X X X Extracts X X X X X X X X Extracts X X X X ..... s powers under section 5 of the Act, sales tax at the rate of Rs. 6-4-0 per cent is payable by importers of "scientific apparatus of every kind, cameras, camera lenses and other photographic material". The relevant entry in the notification prescribing the rate of sales tax reads as follows:- During the year 1952-53, the assessee imported photographic material of the value of Rs. 37,559. Of these goods, materials of the value of Rs. 11,900 were, according to the taxpayer, utilised by him in taking photographs and supplying copies thereof to the order of his customers on payment. Before the taxing authority, the assessee contended that he could not be assessed to sales tax on the value of the material used by him in taking photographic as th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s customers. The other way learned counsel submitted his case was that the taxpayer's business as a photographer is more in the nature of a service than of a sale; that when a customer comes to the assessee for being photographed and obtains copies thereof, the order placed by him is not a transaction comparable to that of a sale of an article in a shop but that it is a contract for work and labour done and material supplied within the authority of Clay v. Yates [1856] 1 H. & N. 73; 101 E.R. 461. 3.. In order to determine the validity of these contentions, it is necessary to see what exactly is the course of business followed by the assessee and what precisely he does when he takes photographs and supplies copies thereof to his customers o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ph is thus essentially the resultant effect of certain chemicals and materials used in a particular manner with the aid of certain equipments. Photographs are thus goods produced from certain materials with the aid of certain instruments and by manual labour. When, therefore, a photographer takes photographs for his customers and supplies as many copies of the photographs as his customers desire on payment, a photographer's business becomes one of production of goods for sale. He then becomes a manufacturer within the meaning of the term given in section 2(k) of the Act. The scope and meaning of the word "manufacturer" has been pointed out in the case of Messrs. Hiralal Jitmal v. Commissioner of Sales Tax[1957] 8 S.T.C. 325. and in North Be ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... .T.C. 93. Mr. Chaphekar, learned counsel, suggested that the goods utilised in the course of execution of a contract for the sale of photographs could not be said to be sold when the photographs are sold, as under the definition of "sale" given in section 2(o). "Sale" included a transfer of property in goods made in the course of execution of only that contract which fell within the meaning of section 2(e) and that the definition of "contract" given in section 2(e) did not cover the case of a contract for the sale of movable goods such as a photograph. There is no substance in this contention. The inclusion in the definition of "sale " of "a transfer of property in goods made in course of execution of a contract" cannot, however, be read as ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the case of Babulal [1955] 6 S.T.C. 255.In that case no doubt the taxpayer was assessed as a manufacturer, but the assessment was on the basis that when the dyed yarn, that is the finished goods, was sold to the customers, there was a transfer of property in the dye-stuffs and chemicals used for dyeing the yarn, and on the basis of the value of the material and chemicals so used. On the authority of Babulal v. D. P. Dube(1), it must be held in this case also that when the petitioner sold photographs to his customers there was a sale of the materials and chemicals utilised by him in producing the photographs. It must be stated that the petitioner has been assessed only on the value of the photographic material actually utilised by him in th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s to the form of action when goods contracted for had not been produced. 5.. In this connection it would be useful to refer to the decision of the High Court of Australia in Federal Commissioner of Taxation v. Riley53 C.L.R. 69., where on the definition of "manufacture", in the Australian Statute, which includes "production" it was held that photographs taken of and supplied to clients for a price in the course of a photographer's business, were "goods manufactured", and that having regard to the whole of what is done in the production of a photograph, it could not be regarded as being in the nature of an artistic service of a personal character. The decision is of considerable help in answering the question referred to here. 6.. For all ..... X X X X Extracts X X X X X X X X Extracts X X X X
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