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TMI Blog1996 (10) TMI 442X X X X Extracts X X X X X X X X Extracts X X X X ..... themselves had the copy-rights in the prints? (3) Whether, on the facts and in the circumstances of the case, the Tribunal was correct in concluding that the finished products were not wholly owned by the opponents and, therefore, there could be no transfer of property by way of sale in the finished prints from the opponents to their customers? (4) Whether the Tribunal was wrong in holding that the ratio of the decision of the Supreme Court in B.C. Kame s case [1977] 39 STC 237, was applicable even in the case of additional prints? The following additional question has also been referred in Sales Tax Reference No. 31 of 1989 (Commissioner of Sales Tax v. Chopra Films): "Whether, on the facts and in the circumstances of the case, the Tribunal was correct in law in holding that the opponents were not liable to pay purchase tax under section 13 of the Bombay Sales Tax Act, 1959, on their turnover of purchases amounting to Rs. 12,574?" 2.. In so far as the above additional question is concerned, it is stated by Mr. A.J. Rana, learned counsel for the Revenue, that the revenue does not propose to press this question. The said question is, therefore, returned unanswered. 3.. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ion that in the past, as also at the material time, no sales tax was levied on the production of films (master prints) and supplying the positive and negative prints thereof as according to both the assessee and the Revenue that was a works contract. Tax was levied only on the additional prints supplied to the customers. The case of the assessee before the Deputy Commissioner was that the production and supply of additional prints of the advertising films was not a contract for supply of goods but it was a contract for work and labour and as such it was covered by the ratio of the decision of the Supreme Court in the case of B.C. Kame [1977] 39 STC 237. The Deputy Commissioner of Sales Tax (Administration) accepted the above contention of the assessee and by his order dated 19th August, 1978, held that in view of the decision of the Supreme Court in the case of B.C. Kame [1977] 39 STC 237, the job of taking out and supplying additional prints of the advertising films by the assessee was a work of art and skill and no element of sale was involved therein. Accordingly, he held that no sales tax was payable on the supply of 60 prints by the assessee. 5.. The Commissioner of Sales Ta ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the preparation and supply of the additional prints by the assessee to their customers from the negatives supplied by them was not a contract for work, labour and skill but a contract for sale. According to the learned counsel, the prints having been supplied by the assessee to their customers for commercial use and not for their personal use, the preparation thereof cannot be described as work of art. It is contended that the prints were made by mechanical process and that fact itself militates against the contention of the assessee that the preparation of additional prints was a work of art. 8.. In reply, Mr. J.K. Seth, learned counsel for the assessee, submits that the controversy in this case is squarely covered by the ratio of the decision of the Supreme Court in Assistant Sales Tax Officer v. B.C. Kame [1977] 39 STC 237. It was pointed out that the process of preparing extra prints from the negatives is a work of art and skill because it requires sophisticated technical knowledge to prepare prints from the negatives. According to the learned counsel the fact that the prints are made with the help of machinery does not make it any less the work of art or skill. Reference wa ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... [1977] 39 STC 237 squarely applies to the facts of this case. 11.. The controversy before the Supreme Court in the B.C. Kame s case [1977] 39 STC 237, was whether the supply of prints by the photographer to his client amounts to contract for sale of goods or it was a contract of work and labour. The Supreme Court held: "When a photographer.........undertakes to take photograph, develop the negative, or do other photographic work and thereafter supply the prints to his client, he cannot 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 aesthetic sense and artistic faculty of the photographer, but it also reflects his skill and labour." The ratio of the above decision, in our opinion, squarely applies to the supply of extra prints of the advertising films by the assessee to their customers and the Tribunal, in our opinion, was justified in applying the same and holding the transacti ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... paper upon which the copy is produced; it is to duplicate or make a xerox copy of the document which the payer of the price wants duplicated. The paper upon which the duplication takes place is only incidental to this transaction. The object of the payment of the price is to get the document duplicated, not to receive the paper. The payer of the price has no interest in the bare paper upon which his document is duplicated. He is interested in it only if it bears such duplication." Following the test laid down in B.C. Kame s case [1977] 39 STC 237 (SC), it was held that the contract between the operator of the photocopier and the customer was a contract of work or service and not a contract of sale upon which sales tax was exigible. 15.. The ratio of the above decision squarely applies to the case before us. In this case also, the assessee supplied additional prints of the advertising films to the customers. The prints supplied were not prints which could be sold in the market, nor there was any utility of the same to anyone other than the customer. Admittedly, the prints supplied by the assessee is not a commercial commodity in the sense that it cannot be sold in the market t ..... 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