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TMI Blog2000 (2) TMI 2X X X X Extracts X X X X X X X X Extracts X X X X ..... developing and printing films would amount to a 'works contract' as contemplated under Article 366(2A) (b) of the Constitution read with Section 2(n) of the M.P. General Sales Tax for the purpose of levy of sales tax on business turnover of the photographers. 2.Prior to the 46th Constitutional Amendment, this question was settled in favour of the assessees by the judgment of this Court in the case of Assistant Sales Tax Officer & Ors. v. B.C. Kame [1977 (39) STC 237]. 3.Taking advantage of the 46th Amendment of the Constitution and the consequent amendment to the definition of 'sale' in Section 2(n) of the local Sales Tax Act, the Commissioner of Sales Tax, M.P. issued Circular dated 25-1-1992 opining that the job done by ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ts and return the negative films back to the customers. In some of the cases, it is possible that the appellants may undertake the work of enlarging the photo prints also. It is also of common knowledge that the photo prints supplied by them to their customers are not marketable commodities and as goods they have no value. 8.In this background, we will now examine the question arising in these appeals. This Court in Kame's case (supra) while 9. considering the facts of a similar case held: "... 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 cannot be said to enter into a contract for sale of goods. The ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Court in Builders' case (supra) is that it is now open to the States to divide the works contract into two separate contracts by a legal fiction (i) contract for sale of goods involved in the said works contract and (ii) for supply of labour and service. This division of contract under the amended law can be made only if the works contract involved a dominant intention to transfer the property in goods and not in contracts where the transfer in property takes place as an incident of contract of service. The Amendment, referred to above, has not empowered the State to indulge in microscopic division of contracts involving the value of materials used incidentally in such contracts. What is pertinent to ascertain in this connection is what ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ject of the work undertaken by the operator of a photocopier or xerox machine is not the transfer of the 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. What is involved is not a sale but a contract of work or labour." 14.In Bavens v. Union of India & Ors. [1995 (97) STC 161], a Division Bench of the Kerala Hig ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... his Court in the said case held that by the 46th Amendment to the Constitution, the definition of the expression "tax on the sale or purchase of goods" stood enlarged, it also held that the 46th Amendment does no more than making it possible for the States to levy sales-tax on the price of goods and materials used in the 'works contract' as if there was a sale of such goods and materials. The Court also observed : "We are surprised at the attitude of the States which have put forward the plea that on the passing of the 46th Amendment the Constitution had conferred on the States a larger freedom than what they had before in regard to their power to levy sales tax under entry 54 of the State List. The 46th Amendment does no more than ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 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 (supra), 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. 17.For the reasons stated above, we are of the opinion that the view taken by the Division Bench of the Madhya Pradesh High Court in the impugned judgment cannot be sustained. Hence, we allow these appeals, 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. No costs. SLP (C) Nos. 18089-90/ ..... X X X X Extracts X X X X X X X X Extracts X X X X
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