Studio Sujata Vs. Commissioner of Sales Tax - Court Judgment

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			'casenote' => 'Sales Tax - Assessment - Contract of Sale - Section 12 (5) of Orissa Sales Tax 1947 - Petitioner carries on business of processing and developing photography - Revenue assessed petitioner under Section 12(5) of Act on ground that activities of petitioner can be called works contract - Petitioner approached to Assistant of Sales Tax on ground that there is no contract of sale between the petitioner and the client, it is only service - Dismissed and affirmed by Tribunal - Hence present petition - Whether Tribunal is right to held that tax is exigible for photographs as execution of works contract or not? - Held, as per precedent laid down by Supreme Court in case of Sales Tax Officer v. B.C. Kame that photographer takes photograph and develops negatives and does other photographic work and thereafter supplies prints to his client - By doing so he cannot be said to enter into contract for sale of goods - Therefore, job of photographer is contract for work and labour and it is not contract of sale - Revenue committed mistake in assessing petitioner under Section 12(5) of Act on basis of contract of sale - Petition disposed of accordingly  - STATE FINANCIAL CORPORATIONS ACT, 1951 [63/1951]. Section 29; [P.K. Tripathy, A.K. Parichha & N.Prusty, JJ] Discharge of loan  Orissa Forest Act (14 of 1972), Section 56  Confiscation of vehicle - Held, The Authorities under Section 56 of the Orissa Forest Act, 1972 are not obliged to release the vehicle from the confiscation proceeding or to pay the sale proceeds of the vehicle after the order of confiscation in favour of Orissa State Financial Corporation when such vehicles were purchased on being financed by the Orissa State Financial Corporation and the loan had not been liquidated by the date of the seizure/confiscation of the vehicle. Concept of first charge or second charge has no applicability when the vehicle is not otherwise disposed of to determine the liabilities of the loanee. On the other hand the vehicle having been found indulged in forest offences was made subject matter of a confiscation proceedings, and therefore, the procedure followed for confiscation of the vehicle and for its sale is punitive in nature and not with a view to give benefit to anybody including the Department which initiated the confiscation proceeding. Apart from that, the claim of the Orissa State Financial Corporation as against its loanee (who had taken the vehicle on hire- purchase agreement) brings the loanee and the sureties within the default clause under the State Financial Corporation Act, 1951 or the heirs and successors of such persons. Procedure is provided in the Act, 1951 and the Rules thereof about the manner in which such loan is to be recovered, and in that context only the vehicle under the hire-purchase agreement is placed as the first charge. If such property is not available for any reason, then the loan is not automatically waived or the loanee and his sureties are not automatically redeemed of the liabilities to repay. The Financial Corporation is concerned with repayment of loan either from the property or persons offered as surety. Thus, a vehicle, which is subject matter of confiscation proceeding under the Act, 1872, being not available to the Orissa State Financial Corporation for adjustment of the unpaid loan, that does not at all bring out an anomalous situation so as to defeat the right of the Orissa State Financial Corporation. Agreement between the Orissa State Financial Corporation and the loanee is a pure and simple contract governed by the provisions of the Contract Act, 1872 read with the provisions in the Act, 1951 and its Rules. On the other hand, a confiscation proceeding under the Act, 1972 is punitive in nature for commission of a forest offence. Thus, by virtue of the provision in Section 56 read with Section 64 (2) of the Act, 1972, the action taken for confiscation of the vehicle cannot be extended to grant protection of the loan advanced by Orissa State Financial Corporation. By doing that it amounts to grant premium to the pick-pockets in as much as, by making payment of the confiscation amount in favour of the Orissa State Financial Corporation the loan burden of the accused of the forest offence is reduced to the extent of the sale proceeds of the vehicle. In other words, on payment of the sale proceeds of the confiscation proceeding to the Orissa State Financial Corporation towards discharge of the loan account of the accused of a forest offence, it would lead to a system to reward him by repayment of his loan. Then it does not become a penalty nor the action become punitive, but it remains as a reward to the accused of forest offence. Such a concept is totally not conceivable from any provision in the Act, 1972 or the Act, 1951. [AIR 2002 Orissa 130 Overruled]. -- STATE FINANCIAL CORPORATIONS ACT, 1951. 
Section 29; Discharge of loan  Orissa Forest Act (14 of 1972), Section 56  Confiscation of vehicle - Held, The Authorities under Section 56 of the Orissa Forest Act, 1972 are not obliged to release the vehicle from the confiscation proceeding or to pay the sale proceeds of the vehicle after the order of confiscation in favour of Orissa State Financial Corporation when such vehicles were purchased on being financed by the Orissa State Financial Corporation and the loan had not been liquidated by the date of the seizure/confiscation of the vehicle. Concept of first charge or second charge has no applicability when the vehicle is not otherwise disposed of to determine the liabilities of the loanee. On the other hand the vehicle having been found indulged in forest offences was made subject matter of a confiscation proceedings, and therefore, the procedure followed for confiscation of the vehicle and for its sale is punitive in nature and not with a view to give benefit to anybody including the Department which initiated the confiscation proceeding. Apart from that, the claim of the Orissa State Financial Corporation as against its loanee (who had taken the vehicle on hire- purchase agreement) brings the loanee and the sureties within the default clause under the State Financial Corporation Act, 1951 or the heirs and successors of such persons. Procedure is provided in the Act, 1951 and the Rules thereof about the manner in which such loan is to be recovered, and in that context only the vehicle under the hire-purchase agreement is placed as the first charge. If such property is not available for any reason, then the loan is not automatically waived or the loanee and his sureties are not automatically redeemed of the liabilities to repay. The Financial Corporation is concerned with repayment of loan either from the property or persons offered as surety. Thus, a vehicle, which is subject matter of confiscation proceeding under the Act, 1872, being not available to the Orissa State Financial Corporation for adjustment of the unpaid loan, that does not at all bring out an anomalous situation so as to defeat the right of the Orissa State Financial Corporation. Agreement between the Orissa State Financial Corporation and the loanee is a pure and simple contract governed by the provisions of the Contract Act, 1872 read with the provisions in the Act, 1951 and its Rules. On the other hand, a confiscation proceeding under the Act, 1972 is punitive in nature for commission of a forest offence. Thus, by virtue of the provision in Section 56 read with Section 64 (2) of the Act, 1972, the action taken for confiscation of the vehicle cannot be extended to grant protection of the loan advanced by Orissa State Financial Corporation. By doing that it amounts to grant premium to the pick-pockets in as much as, by making payment of the confiscation amount in favour of the Orissa State Financial Corporation the loan burden of the accused of the forest offence is reduced to the extent of the sale proceeds of the vehicle. In other words, on payment of the sale proceeds of the confiscation proceeding to the Orissa State Financial Corporation towards discharge of the loan account of the accused of a forest offence, it would lead to a system to reward him by repayment of his loan. Then it does not become a penalty nor the action become punitive, but it remains as a reward to the accused of forest offence. Such a concept is totally not conceivable from any provision in the Act, 1972 or the Act, 1951. [AIR 2002 Orissa 130 Overruled].  -  In that case, the stand of the Revenue was disapproved by the Orissa High Court. 16. Learned Counsel for the petitioner submitted that the photographs taken by the petitioner are not goods which can be sold and is not a marketable commodity like any other goods.',
			'caseanalysis' => null,
			'casesref' => 'Imagic Creative Pvt. Ltd. v. Commissioner of Commercial Taxes and Ors.;',
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			'judge' => ' A.K. Ganguly, C.J. and; B.N. Mahapatra, J.',
			'judgement' => '<p style="text-align: justify;">A.K. Ganguly, C.J.</p><p style="text-align: justify;">1. Initially three S.J.Cs. being S.J.C. Nos. 10 of 1997, 8 of 1997 and 9 of 1997 were filed and subsequently renumbered as STREV Nos. 212, 214 and 216 of 2007 respectively. In view of the common questions of facts and law, all the three Revision Applications are heard and disposed of together.</p><p style="text-align: justify;">2. The following questions of law arising out of the order passed by the Orissa Sales Tax Tribunal on 8.12.1993 in Second Appeal Nos. 3345 to 3350 of 1991-92 have been referred to this Hon'ble High Court in terms of the order of this Hon'ble Court dated 24.2.1997. The questions are:</p><p style="text-align: justify;">(i) Whether on the facts and in the circumstances of the case, the Tribunal is right to held that tax is exigible for photographs as execution of works contract ?</p><p style="text-align: justify;">(ii) Whether on the facts and in the circumstances of the case, the conclusion of the Tribunal is perverse due to non-consideration and mis-consideration of facts and law and, therefore, it is liable to be set aside for re-hearing ?</p><p style="text-align: justify;">3. The materials facts out of which those questions arise are that the petitioner carries on the business of processing and developing photography. In the usual course of business, the petitioner takes photographs of persons or of family and then develops the negative by employing his skill and labour and then supplies the photographs to the clients. These photographs which are prepared by the petitioner are not commercial items because they are neither purchased nor sold. However, to develop these photographs employment of skill and labour is essential. It may be mentioned that petitioner does not carry on any sale of photographs of national leaders, God and Goddess.</p><p style="text-align: justify;">4. After the passing of 46th amendment of the Constitution of India and consequent amendments thereto in Orissa Sales Tax Act (OST Act), the Sales Tax Officer, Bhubaneswar-II Circle, Bhubaneswar sent notices to assess the petitioner as an unregistered dealer under Section 12 (5) of the OST Act, inter alia, contending that the petitioner's activities can be called 'works contract'. Pursuant to said notice, the petitioner gave its reply and appeared before the Sales Tax Officer and produced the books of account and documents including Receipts, Purchase Memos, Vouchers, Ledger and thereby denied its liability under the OST Act. The petitioner also submitted objection petitions on various dates i.e. 28.12.1985, 10.1.1986, 20.2.1986 and 29.2.1988 contending, inter alia, that the petitioner has no sales tax liability under OST Act and the notices, which were issued, are without jurisdiction.</p><p style="text-align: justify;">5. Ignoring the said objections of the petitioner, the Sales Tax Officer, Bhubaneswar-II Circle, Bhubaneswar assessed the petitioner as an unregistered dealer, inter alia, holding that the petitioner is liable to pay sales tax as petitioner has been alleged to carry activities of 'works contract'. Therefore, orders of assessment being dated 29.2.1988 for the years 1984-85 (9/84 to 3/85), 1985-86 and 1986- 87 under Section 12(5) of OST Act and under Rule 5 of the Orissa Additional Sales Tax Rules, 1975 were passed and a tax of Rs. 20,765.00 and penalty of Rs. 5,000.00 totalling to Rs. 25,765.00 was imposed on the petitioner. The petitioner then filed the First Appeal before the learned Assistant Commissioner of Sales Tax. The First Appellate Authority by an order dated 27.9.1991 confirmed the levy of tax under the OST Act, but reduced the penalty to Rs. 1250.00. Thereupon, the petitioner filed the Second Appeal before the Orissa Sales Tax Tribunal, Cuttack. The said Tribunal heard the Second Appeal and in course of hearing, the petitioner raised various contentions. Ultimately, the Tribunal upheld the levy of tax but deleted the penalty.</p><p style="text-align: justify;">6. Thereafter the petitioner came up with a reference application under Section 24(1) of the Orissa Sales Tax Act framing certain questions for being referred to the Hon'ble High Court. The said prayer of the petitioner was rejected by the Tribunal. Then the petitioner moved Hon'ble High Court under Section 24(2)(b) of the Orissa Sales Tax Act, 1947 whereupon the High Court directed the Tribunal to state to case and refer the questions under Section 24(3) of the OST Act for a decision of the High Court.</p><p style="text-align: justify;">7. Accordingly, the Tribunal stated the case and referred the aforesaid questions for a decision of the High Court.</p><p style="text-align: justify;">8. Learned Counsel for the petitioner before the High Court submitted that in the transaction in question, there is no contract of sale between the petitioner and the client. It is only a contract of service and the photographs, which the petitioner produced by supplying the same has no commercial value and are not marketable. So, there is no question of a works contract. It is the consistent stand of the petitioner that the present photographs which are produced by the petitioner have no utility or value to any other person than the customer. By developing such photographs, the petitioner only renders service to his customers. The customer pays for the service rendered by the petitioner. It is the contention of the petitioner that his activity is similar to that of consulting firm preparing plan and sketches pursuant to client's specification or professional giving opinion on papers. All those activities are done to serve the client. Therefore, this does not come within the purview of the definition of 'goods', 'sale', 'dealer' or 'works contract'. It is the petitioner's case that he purchased the goods, namely, papers on payment of sales tax. Further levy of tax on the personal service rendered to the client of the petitioner will amount to double taxation. It is also the contention of the petitioner that the paper which is used in the photography are incidental and insignificant.</p><p style="text-align: justify;">9. In support of its contention, learned Counsel for the petitioner has relied on several judgments. First reliance was place on the judgment of the Supreme Court in the case of Sales Tax Officer v. B.C. Kame reported in 39 STC 237(SC). At page 241 of the report, learned Judges of the Supreme Court held that a photographer takes the photograph and develops the negatives and does other photographic work and thereafter supplies the prints to his client. By doing so he cannot be said to enter into a contract for sale of goods. On the other hand, the contract is for use of skill and labour by the photographer to bring about the desired result. Learned Judges held that the job of a photographer is a contract for work and labour and it is not a contract of sale.</p><p style="text-align: justify;">10. Reliance was also placed on a judgment of this High Court in the case of Photo Emporium v. Addl. District Magistrate reported in 77 STC 199 in which this High Court followed the ratio of the judgment of the Supreme Court in the case of B.C. Kame. In that case, the stand of the Revenue was disapproved by the Orissa High Court.</p><p style="text-align: justify;">11. Similar view was taken in 110 STC 145 in the case of Foto Colour Labs Pvt. Ltd. v. Commercial Taxes Officer where the Tribunal held that the transfer of paper in the photograph is purely incidental and payment is only taken to give positive prints and not to get the photo papers. Therefore, the contract in between the petitioner and his client is not a contract of sale, and neither directly or indirectly works contract is involved in the supply of photo papers. Similar view was taken by the West Bengal Taxation Tribunal in the case of Studio Kamalalaya v. Commercial Tax Officer reported in 89 STC 307.</p><p style="text-align: justify;">12. In the case of Bavens v. Onion of India report in 97 STC 161, learned Judges held that when a photographer takes a photograph of his customer, he develops the negative and supplies positive prints in the desired size to the customer. In doing so the photographer uses his own camera and his own film. The negative belongs to the photographer and not to the customer. No basic goods are provided by the customer which are subjected to processing by the photographer so as to make the contract a works contract. There is no accretion to goods or property or the nucleus of a property which belongs to the customer. It is the skill of the photographer which is most important to get the desired result.</p><p style="text-align: justify;">13. Hon'ble Karnataka High Court followed the same principle in the case of Keshoram Surlndranath Photo-mag Pvt. Ltd. v. Assistant Commissioner of Commercial Taxes reported in 121 STC 175. In that judgment, learned Judges of the Karnataka High Court relied on the judgment of the Supreme Court in B.C. Kame's case and came to the conclusion that in the job of the photographer in supplying positive prints to his customer, no works contract is involved and photographs are not marketable or saleable commodity and as such no tax can be levied on it.</p><p style="text-align: justify;">14. Against the said judgment of the Karnataka High Court, the State of Karnataka High Court filed a S.L.P. before the Hon'ble Supreme Court bearing SLP Nos. 6136-6163 of 2000 and the Hon'ble Supreme Court dismissed the SLP on 20th April, 2000.</p><p style="text-align: justify;">15. In the case of Rainbow Colour Lab v. State of M.P. learned Judges of the Hon'ble Supreme Court reiterated its judgment in B.C. Kame's case and came to the following conclusion:</p><p style="text-align: justify;">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.</p><p style="text-align: justify;">Hon'ble Supreme Court in Bharat Sanchar Nigam Ltd. v. Union of India reported in 145 STC 91 again reiterated the principle in B.C. Kame's case and held that the work done by the photographer is only in the nature of a service contract not involving any sale of goods and held that the stand taken by the State cannot be sustained.</p><p style="text-align: justify;">16. Learned Counsel for the petitioner submitted that the photographs taken by the petitioner are not goods which can be sold and is not a marketable commodity like any other goods. When the copies of photographs are made out, they have no utility or value to any other person than the customer. It is already admitted that the papers utilized for photographs are tax paid goods. Therefore, it is contended by the learned Counsel for the petitioner that the work of photography does not come within the purview of works contract as defined in Section 2(jj) of the Orissa Sales Tax Act.</p><p style="text-align: justify;">17. Learned Counsel for the Revenue in this case virtually did not contest the submission made by the learned Counsel for the petitioner and in support of his contention, learned Counsel for the Revenue relied on a decision of the Supreme Court in the case of Imagic Creative Pvt. Ltd. v. Commissioner of Commercial Taxes and Ors. reported in (2008) 10 RC 236. In that judgment, learned Judges held that since the contract in question is a service contract, it is difficult to hold that in a case of this nature, sales tax would be payable on the value of the entire contract irrespective of the element of service provided.</p><p style="text-align: justify;">For the reasons discussed above, we answer the first question in the negative and the second question, in the affirmative. We thus answer both the questions in favour of the assessee and against the Revenue.</p><p style="text-align: justify;">The three revision applications are thus disposed of.</p><p style="text-align: justify;">No costs.</p><p style="text-align: justify;">B.N. Mahapatra, J.</p><p style="text-align: justify;">18. I agree.<p style="text-align: justify;"></p><p style="text-align: justify;">',
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			'pubs' => '106(2008)CLT317; 2008(I)OLR953; (2008)17VST289(Orissa)',
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		'casenote' => 'Sales Tax - Assessment - Contract of Sale - Section 12 (5) of Orissa Sales Tax 1947 - Petitioner carries on business of processing and developing photography - Revenue assessed petitioner under Section 12(5) of Act on ground that activities of petitioner can be called works contract - Petitioner approached to Assistant of Sales Tax on ground that there is no contract of sale between the petitioner and the client, it is only service - Dismissed and affirmed by Tribunal - Hence present petition - Whether Tribunal is right to held that tax is exigible for photographs as execution of works contract or not? - Held, as per precedent laid down by Supreme Court in case of Sales Tax Officer v. B.C. Kame that photographer takes photograph and develops negatives and does other photographic work and thereafter supplies prints to his client - By doing so he cannot be said to enter into contract for sale of goods - Therefore, job of photographer is contract for work and labour and it is not contract of sale - Revenue committed mistake in assessing petitioner under Section 12(5) of Act on basis of contract of sale - Petition disposed of accordingly  - STATE FINANCIAL CORPORATIONS ACT, 1951 [63/1951]. Section 29; [P.K. Tripathy, A.K. Parichha & N.Prusty, JJ] Discharge of loan  Orissa Forest Act (14 of 1972), Section 56  Confiscation of vehicle - Held, The Authorities under Section 56 of the Orissa Forest Act, 1972 are not obliged to release the vehicle from the confiscation proceeding or to pay the sale proceeds of the vehicle after the order of confiscation in favour of Orissa State Financial Corporation when such vehicles were purchased on being financed by the Orissa State Financial Corporation and the loan had not been liquidated by the date of the seizure/confiscation of the vehicle. Concept of first charge or second charge has no applicability when the vehicle is not otherwise disposed of to determine the liabilities of the loanee. On the other hand the vehicle having been found indulged in forest offences was made subject matter of a confiscation proceedings, and therefore, the procedure followed for confiscation of the vehicle and for its sale is punitive in nature and not with a view to give benefit to anybody including the Department which initiated the confiscation proceeding. Apart from that, the claim of the Orissa State Financial Corporation as against its loanee (who had taken the vehicle on hire- purchase agreement) brings the loanee and the sureties within the default clause under the State Financial Corporation Act, 1951 or the heirs and successors of such persons. Procedure is provided in the Act, 1951 and the Rules thereof about the manner in which such loan is to be recovered, and in that context only the vehicle under the hire-purchase agreement is placed as the first charge. If such property is not available for any reason, then the loan is not automatically waived or the loanee and his sureties are not automatically redeemed of the liabilities to repay. The Financial Corporation is concerned with repayment of loan either from the property or persons offered as surety. Thus, a vehicle, which is subject matter of confiscation proceeding under the Act, 1872, being not available to the Orissa State Financial Corporation for adjustment of the unpaid loan, that does not at all bring out an anomalous situation so as to defeat the right of the Orissa State Financial Corporation. Agreement between the Orissa State Financial Corporation and the loanee is a pure and simple contract governed by the provisions of the Contract Act, 1872 read with the provisions in the Act, 1951 and its Rules. On the other hand, a confiscation proceeding under the Act, 1972 is punitive in nature for commission of a forest offence. Thus, by virtue of the provision in Section 56 read with Section 64 (2) of the Act, 1972, the action taken for confiscation of the vehicle cannot be extended to grant protection of the loan advanced by Orissa State Financial Corporation. By doing that it amounts to grant premium to the pick-pockets in as much as, by making payment of the confiscation amount in favour of the Orissa State Financial Corporation the loan burden of the accused of the forest offence is reduced to the extent of the sale proceeds of the vehicle. In other words, on payment of the sale proceeds of the confiscation proceeding to the Orissa State Financial Corporation towards discharge of the loan account of the accused of a forest offence, it would lead to a system to reward him by repayment of his loan. Then it does not become a penalty nor the action become punitive, but it remains as a reward to the accused of forest offence. Such a concept is totally not conceivable from any provision in the Act, 1972 or the Act, 1951. [AIR 2002 Orissa 130 Overruled]. -- STATE FINANCIAL CORPORATIONS ACT, 1951. 
Section 29; Discharge of loan  Orissa Forest Act (14 of 1972), Section 56  Confiscation of vehicle - Held, The Authorities under Section 56 of the Orissa Forest Act, 1972 are not obliged to release the vehicle from the confiscation proceeding or to pay the sale proceeds of the vehicle after the order of confiscation in favour of Orissa State Financial Corporation when such vehicles were purchased on being financed by the Orissa State Financial Corporation and the loan had not been liquidated by the date of the seizure/confiscation of the vehicle. Concept of first charge or second charge has no applicability when the vehicle is not otherwise disposed of to determine the liabilities of the loanee. On the other hand the vehicle having been found indulged in forest offences was made subject matter of a confiscation proceedings, and therefore, the procedure followed for confiscation of the vehicle and for its sale is punitive in nature and not with a view to give benefit to anybody including the Department which initiated the confiscation proceeding. Apart from that, the claim of the Orissa State Financial Corporation as against its loanee (who had taken the vehicle on hire- purchase agreement) brings the loanee and the sureties within the default clause under the State Financial Corporation Act, 1951 or the heirs and successors of such persons. Procedure is provided in the Act, 1951 and the Rules thereof about the manner in which such loan is to be recovered, and in that context only the vehicle under the hire-purchase agreement is placed as the first charge. If such property is not available for any reason, then the loan is not automatically waived or the loanee and his sureties are not automatically redeemed of the liabilities to repay. The Financial Corporation is concerned with repayment of loan either from the property or persons offered as surety. Thus, a vehicle, which is subject matter of confiscation proceeding under the Act, 1872, being not available to the Orissa State Financial Corporation for adjustment of the unpaid loan, that does not at all bring out an anomalous situation so as to defeat the right of the Orissa State Financial Corporation. Agreement between the Orissa State Financial Corporation and the loanee is a pure and simple contract governed by the provisions of the Contract Act, 1872 read with the provisions in the Act, 1951 and its Rules. On the other hand, a confiscation proceeding under the Act, 1972 is punitive in nature for commission of a forest offence. Thus, by virtue of the provision in Section 56 read with Section 64 (2) of the Act, 1972, the action taken for confiscation of the vehicle cannot be extended to grant protection of the loan advanced by Orissa State Financial Corporation. By doing that it amounts to grant premium to the pick-pockets in as much as, by making payment of the confiscation amount in favour of the Orissa State Financial Corporation the loan burden of the accused of the forest offence is reduced to the extent of the sale proceeds of the vehicle. In other words, on payment of the sale proceeds of the confiscation proceeding to the Orissa State Financial Corporation towards discharge of the loan account of the accused of a forest offence, it would lead to a system to reward him by repayment of his loan. Then it does not become a penalty nor the action become punitive, but it remains as a reward to the accused of forest offence. Such a concept is totally not conceivable from any provision in the Act, 1972 or the Act, 1951. [AIR 2002 Orissa 130 Overruled].  -  In that case, the stand of the Revenue was disapproved by the Orissa High Court. 16. Learned Counsel for the petitioner submitted that the photographs taken by the petitioner are not goods which can be sold and is not a marketable commodity like any other goods.',
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		'judge' => ' A.K. Ganguly, C.J. and; B.N. Mahapatra, J.',
		'judgement' => '<p>A.K. Ganguly, C.J.</p><p>1. Initially three S.J.Cs. being S.J.C. Nos. 10 of 1997, 8 of 1997 and 9 of 1997 were filed and subsequently renumbered as STREV Nos. 212, 214 and 216 of 2007 respectively. In view of the common questions of facts and law, all the three Revision Applications are heard and disposed of together.</p><p>2. The following questions of law arising out of the order passed by the Orissa Sales Tax Tribunal on 8.12.1993 in Second Appeal Nos. 3345 to 3350 of 1991-92 have been referred to this Hon'ble High Court in terms of the order of this Hon'ble Court dated 24.2.1997. The questions are:</p><p>(i) Whether on the facts and in the circumstances of the case, the Tribunal is right to held that tax is exigible for photographs as execution of works contract ?</p><p>(ii) Whether on the facts and in the circumstances of the case, the conclusion of the Tribunal is perverse due to non-consideration and mis-consideration of facts and law and, therefore, it is liable to be set aside for re-hearing ?</p><p>3. The materials facts out of which those questions arise are that the petitioner carries on the business of processing and developing photography. In the usual course of business, the petitioner takes photographs of persons or of family and then develops the negative by employing his skill and labour and then supplies the photographs to the clients. These photographs which are prepared by the petitioner are not commercial items because they are neither purchased nor sold. However, to develop these photographs employment of skill and labour is essential. It may be mentioned that petitioner does not carry on any sale of photographs of national leaders, God and Goddess.</p><p>4. After the passing of 46th amendment of the Constitution of India and consequent amendments thereto in Orissa Sales Tax Act (OST Act), the Sales Tax Officer, Bhubaneswar-II Circle, Bhubaneswar sent notices to assess the petitioner as an unregistered dealer under Section 12 (5) of the OST Act, inter alia, contending that the petitioner's activities can be called 'works contract'. Pursuant to said notice, the petitioner gave its reply and appeared before the Sales Tax Officer and produced the books of account and documents including Receipts, Purchase Memos, Vouchers, Ledger and thereby denied its liability under the OST Act. The petitioner also submitted objection petitions on various dates i.e. 28.12.1985, 10.1.1986, 20.2.1986 and 29.2.1988 contending, inter alia, that the petitioner has no sales tax liability under OST Act and the notices, which were issued, are without jurisdiction.</p><p>5. Ignoring the said objections of the petitioner, the Sales Tax Officer, Bhubaneswar-II Circle, Bhubaneswar assessed the petitioner as an unregistered dealer, inter alia, holding that the petitioner is liable to pay sales tax as petitioner has been alleged to carry activities of 'works contract'. Therefore, orders of assessment being dated 29.2.1988 for the years 1984-85 (9/84 to 3/85), 1985-86 and 1986- 87 under Section 12(5) of OST Act and under Rule 5 of the Orissa Additional Sales Tax Rules, 1975 were passed and a tax of Rs. 20,765.00 and penalty of Rs. 5,000.00 totalling to Rs. 25,765.00 was imposed on the petitioner. The petitioner then filed the First Appeal before the learned Assistant Commissioner of Sales Tax. The First Appellate Authority by an order dated 27.9.1991 confirmed the levy of tax under the OST Act, but reduced the penalty to Rs. 1250.00. Thereupon, the petitioner filed the Second Appeal before the Orissa Sales Tax Tribunal, Cuttack. The said Tribunal heard the Second Appeal and in course of hearing, the petitioner raised various contentions. Ultimately, the Tribunal upheld the levy of tax but deleted the penalty.</p><p>6. Thereafter the petitioner came up with a reference application under Section 24(1) of the Orissa Sales Tax Act framing certain questions for being referred to the Hon'ble High Court. The said prayer of the petitioner was rejected by the Tribunal. Then the petitioner moved Hon'ble High Court under Section 24(2)(b) of the Orissa Sales Tax Act, 1947 whereupon the High Court directed the Tribunal to state to case and refer the questions under Section 24(3) of the OST Act for a decision of the High Court.</p><p>7. Accordingly, the Tribunal stated the case and referred the aforesaid questions for a decision of the High Court.</p><p>8. Learned Counsel for the petitioner before the High Court submitted that in the transaction in question, there is no contract of sale between the petitioner and the client. It is only a contract of service and the photographs, which the petitioner produced by supplying the same has no commercial value and are not marketable. So, there is no question of a works contract. It is the consistent stand of the petitioner that the present photographs which are produced by the petitioner have no utility or value to any other person than the customer. By developing such photographs, the petitioner only renders service to his customers. The customer pays for the service rendered by the petitioner. It is the contention of the petitioner that his activity is similar to that of consulting firm preparing plan and sketches pursuant to client's specification or professional giving opinion on papers. All those activities are done to serve the client. Therefore, this does not come within the purview of the definition of 'goods', 'sale', 'dealer' or 'works contract'. It is the petitioner's case that he purchased the goods, namely, papers on payment of sales tax. Further levy of tax on the personal service rendered to the client of the petitioner will amount to double taxation. It is also the contention of the petitioner that the paper which is used in the photography are incidental and insignificant.</p><p>9. In support of its contention, learned Counsel for the petitioner has relied on several judgments. First reliance was place on the judgment of the Supreme Court in the case of Sales Tax Officer v. B.C. Kame reported in 39 STC 237(SC). At page 241 of the report, learned Judges of the Supreme Court held that a photographer takes the photograph and develops the negatives and does other photographic work and thereafter supplies the prints to his client. By doing so he cannot be said to enter into a contract for sale of goods. On the other hand, the contract is for use of skill and labour by the photographer to bring about the desired result. Learned Judges held that the job of a photographer is a contract for work and labour and it is not a contract of sale.</p><p>10. Reliance was also placed on a judgment of this High Court in the case of Photo Emporium v. Addl. District Magistrate reported in 77 STC 199 in which this High Court followed the ratio of the judgment of the Supreme Court in the case of B.C. Kame. In that case, the stand of the Revenue was disapproved by the Orissa High Court.</p><p>11. Similar view was taken in 110 STC 145 in the case of Foto Colour Labs Pvt. Ltd. v. Commercial Taxes Officer where the Tribunal held that the transfer of paper in the photograph is purely incidental and payment is only taken to give positive prints and not to get the photo papers. Therefore, the contract in between the petitioner and his client is not a contract of sale, and neither directly or indirectly works contract is involved in the supply of photo papers. Similar view was taken by the West Bengal Taxation Tribunal in the case of Studio Kamalalaya v. Commercial Tax Officer reported in 89 STC 307.</p><p>12. In the case of Bavens v. Onion of India report in 97 STC 161, learned Judges held that when a photographer takes a photograph of his customer, he develops the negative and supplies positive prints in the desired size to the customer. In doing so the photographer uses his own camera and his own film. The negative belongs to the photographer and not to the customer. No basic goods are provided by the customer which are subjected to processing by the photographer so as to make the contract a works contract. There is no accretion to goods or property or the nucleus of a property which belongs to the customer. It is the skill of the photographer which is most important to get the desired result.</p><p>13. Hon'ble Karnataka High Court followed the same principle in the case of Keshoram Surlndranath Photo-mag Pvt. Ltd. v. Assistant Commissioner of Commercial Taxes reported in 121 STC 175. In that judgment, learned Judges of the Karnataka High Court relied on the judgment of the Supreme Court in B.C. Kame's case and came to the conclusion that in the job of the photographer in supplying positive prints to his customer, no works contract is involved and photographs are not marketable or saleable commodity and as such no tax can be levied on it.</p><p>14. Against the said judgment of the Karnataka High Court, the State of Karnataka High Court filed a S.L.P. before the Hon'ble Supreme Court bearing SLP Nos. 6136-6163 of 2000 and the Hon'ble Supreme Court dismissed the SLP on 20th April, 2000.</p><p>15. In the case of Rainbow Colour Lab v. State of M.P. learned Judges of the Hon'ble Supreme Court reiterated its judgment in B.C. Kame's case and came to the following conclusion:</p><p>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.</p><p>Hon'ble Supreme Court in Bharat Sanchar Nigam Ltd. v. Union of India reported in 145 STC 91 again reiterated the principle in B.C. Kame's case and held that the work done by the photographer is only in the nature of a service contract not involving any sale of goods and held that the stand taken by the State cannot be sustained.</p><p>16. Learned Counsel for the petitioner submitted that the photographs taken by the petitioner are not goods which can be sold and is not a marketable commodity like any other goods. When the copies of photographs are made out, they have no utility or value to any other person than the customer. It is already admitted that the papers utilized for photographs are tax paid goods. Therefore, it is contended by the learned Counsel for the petitioner that the work of photography does not come within the purview of works contract as defined in Section 2(jj) of the Orissa Sales Tax Act.</p><p>17. Learned Counsel for the Revenue in this case virtually did not contest the submission made by the learned Counsel for the petitioner and in support of his contention, learned Counsel for the Revenue relied on a decision of the Supreme Court in the case of Imagic Creative Pvt. Ltd. v. Commissioner of Commercial Taxes and Ors. reported in (2008) 10 RC 236. In that judgment, learned Judges held that since the contract in question is a service contract, it is difficult to hold that in a case of this nature, sales tax would be payable on the value of the entire contract irrespective of the element of service provided.</p><p>For the reasons discussed above, we answer the first question in the negative and the second question, in the affirmative. We thus answer both the questions in favour of the assessee and against the Revenue.</p><p>The three revision applications are thus disposed of.</p><p>No costs.</p><p>B.N. Mahapatra, J.</p><p>18. I agree.<p></p><p>',
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	'title_for_layout' => 'Studio Sujata Vs Commissioner of Sales Tax - Citation 531271 - Court Judgment | ',
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		'Judgement' => array(
			'id' => '531271',
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			'casenote' => 'Sales Tax - Assessment - Contract of Sale - Section 12 (5) of Orissa Sales Tax 1947 - Petitioner carries on business of processing and developing photography - Revenue assessed petitioner under Section 12(5) of Act on ground that activities of petitioner can be called works contract - Petitioner approached to Assistant of Sales Tax on ground that there is no contract of sale between the petitioner and the client, it is only service - Dismissed and affirmed by Tribunal - Hence present petition - Whether Tribunal is right to held that tax is exigible for photographs as execution of works contract or not? - Held, as per precedent laid down by Supreme Court in case of Sales Tax Officer v. B.C. Kame that photographer takes photograph and develops negatives and does other photographic work and thereafter supplies prints to his client - By doing so he cannot be said to enter into contract for sale of goods - Therefore, job of photographer is contract for work and labour and it is not contract of sale - Revenue committed mistake in assessing petitioner under Section 12(5) of Act on basis of contract of sale - Petition disposed of accordingly  - STATE FINANCIAL CORPORATIONS ACT, 1951 [63/1951]. Section 29; [P.K. Tripathy, A.K. Parichha & N.Prusty, JJ] Discharge of loan  Orissa Forest Act (14 of 1972), Section 56  Confiscation of vehicle - Held, The Authorities under Section 56 of the Orissa Forest Act, 1972 are not obliged to release the vehicle from the confiscation proceeding or to pay the sale proceeds of the vehicle after the order of confiscation in favour of Orissa State Financial Corporation when such vehicles were purchased on being financed by the Orissa State Financial Corporation and the loan had not been liquidated by the date of the seizure/confiscation of the vehicle. Concept of first charge or second charge has no applicability when the vehicle is not otherwise disposed of to determine the liabilities of the loanee. On the other hand the vehicle having been found indulged in forest offences was made subject matter of a confiscation proceedings, and therefore, the procedure followed for confiscation of the vehicle and for its sale is punitive in nature and not with a view to give benefit to anybody including the Department which initiated the confiscation proceeding. Apart from that, the claim of the Orissa State Financial Corporation as against its loanee (who had taken the vehicle on hire- purchase agreement) brings the loanee and the sureties within the default clause under the State Financial Corporation Act, 1951 or the heirs and successors of such persons. Procedure is provided in the Act, 1951 and the Rules thereof about the manner in which such loan is to be recovered, and in that context only the vehicle under the hire-purchase agreement is placed as the first charge. If such property is not available for any reason, then the loan is not automatically waived or the loanee and his sureties are not automatically redeemed of the liabilities to repay. The Financial Corporation is concerned with repayment of loan either from the property or persons offered as surety. Thus, a vehicle, which is subject matter of confiscation proceeding under the Act, 1872, being not available to the Orissa State Financial Corporation for adjustment of the unpaid loan, that does not at all bring out an anomalous situation so as to defeat the right of the Orissa State Financial Corporation. Agreement between the Orissa State Financial Corporation and the loanee is a pure and simple contract governed by the provisions of the Contract Act, 1872 read with the provisions in the Act, 1951 and its Rules. On the other hand, a confiscation proceeding under the Act, 1972 is punitive in nature for commission of a forest offence. Thus, by virtue of the provision in Section 56 read with Section 64 (2) of the Act, 1972, the action taken for confiscation of the vehicle cannot be extended to grant protection of the loan advanced by Orissa State Financial Corporation. By doing that it amounts to grant premium to the pick-pockets in as much as, by making payment of the confiscation amount in favour of the Orissa State Financial Corporation the loan burden of the accused of the forest offence is reduced to the extent of the sale proceeds of the vehicle. In other words, on payment of the sale proceeds of the confiscation proceeding to the Orissa State Financial Corporation towards discharge of the loan account of the accused of a forest offence, it would lead to a system to reward him by repayment of his loan. Then it does not become a penalty nor the action become punitive, but it remains as a reward to the accused of forest offence. Such a concept is totally not conceivable from any provision in the Act, 1972 or the Act, 1951. [AIR 2002 Orissa 130 Overruled]. -- STATE FINANCIAL CORPORATIONS ACT, 1951. 
Section 29; Discharge of loan  Orissa Forest Act (14 of 1972), Section 56  Confiscation of vehicle - Held, The Authorities under Section 56 of the Orissa Forest Act, 1972 are not obliged to release the vehicle from the confiscation proceeding or to pay the sale proceeds of the vehicle after the order of confiscation in favour of Orissa State Financial Corporation when such vehicles were purchased on being financed by the Orissa State Financial Corporation and the loan had not been liquidated by the date of the seizure/confiscation of the vehicle. Concept of first charge or second charge has no applicability when the vehicle is not otherwise disposed of to determine the liabilities of the loanee. On the other hand the vehicle having been found indulged in forest offences was made subject matter of a confiscation proceedings, and therefore, the procedure followed for confiscation of the vehicle and for its sale is punitive in nature and not with a view to give benefit to anybody including the Department which initiated the confiscation proceeding. Apart from that, the claim of the Orissa State Financial Corporation as against its loanee (who had taken the vehicle on hire- purchase agreement) brings the loanee and the sureties within the default clause under the State Financial Corporation Act, 1951 or the heirs and successors of such persons. Procedure is provided in the Act, 1951 and the Rules thereof about the manner in which such loan is to be recovered, and in that context only the vehicle under the hire-purchase agreement is placed as the first charge. If such property is not available for any reason, then the loan is not automatically waived or the loanee and his sureties are not automatically redeemed of the liabilities to repay. The Financial Corporation is concerned with repayment of loan either from the property or persons offered as surety. Thus, a vehicle, which is subject matter of confiscation proceeding under the Act, 1872, being not available to the Orissa State Financial Corporation for adjustment of the unpaid loan, that does not at all bring out an anomalous situation so as to defeat the right of the Orissa State Financial Corporation. Agreement between the Orissa State Financial Corporation and the loanee is a pure and simple contract governed by the provisions of the Contract Act, 1872 read with the provisions in the Act, 1951 and its Rules. On the other hand, a confiscation proceeding under the Act, 1972 is punitive in nature for commission of a forest offence. Thus, by virtue of the provision in Section 56 read with Section 64 (2) of the Act, 1972, the action taken for confiscation of the vehicle cannot be extended to grant protection of the loan advanced by Orissa State Financial Corporation. By doing that it amounts to grant premium to the pick-pockets in as much as, by making payment of the confiscation amount in favour of the Orissa State Financial Corporation the loan burden of the accused of the forest offence is reduced to the extent of the sale proceeds of the vehicle. In other words, on payment of the sale proceeds of the confiscation proceeding to the Orissa State Financial Corporation towards discharge of the loan account of the accused of a forest offence, it would lead to a system to reward him by repayment of his loan. Then it does not become a penalty nor the action become punitive, but it remains as a reward to the accused of forest offence. Such a concept is totally not conceivable from any provision in the Act, 1972 or the Act, 1951. [AIR 2002 Orissa 130 Overruled].  -  In that case, the stand of the Revenue was disapproved by the Orissa High Court. 16. Learned Counsel for the petitioner submitted that the photographs taken by the petitioner are not goods which can be sold and is not a marketable commodity like any other goods.',
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			'judgement' => '<p style="text-align: justify;">A.K. Ganguly, C.J.</p><p style="text-align: justify;">1. Initially three S.J.Cs. being S.J.C. Nos. 10 of 1997, 8 of 1997 and 9 of 1997 were filed and subsequently renumbered as STREV Nos. 212, 214 and 216 of 2007 respectively. In view of the common questions of facts and law, all the three Revision Applications are heard and disposed of together.</p><p style="text-align: justify;">2. The following questions of law arising out of the order passed by the Orissa Sales Tax Tribunal on 8.12.1993 in Second Appeal Nos. 3345 to 3350 of 1991-92 have been referred to this Hon'ble High Court in terms of the order of this Hon'ble Court dated 24.2.1997. The questions are:</p><p style="text-align: justify;">(i) Whether on the facts and in the circumstances of the case, the Tribunal is right to held that tax is exigible for photographs as execution of works contract ?</p><p style="text-align: justify;">(ii) Whether on the facts and in the circumstances of the case, the conclusion of the Tribunal is perverse due to non-consideration and mis-consideration of facts and law and, therefore, it is liable to be set aside for re-hearing ?</p><p style="text-align: justify;">3. The materials facts out of which those questions arise are that the petitioner carries on the business of processing and developing photography. In the usual course of business, the petitioner takes photographs of persons or of family and then develops the negative by employing his skill and labour and then supplies the photographs to the clients. These photographs which are prepared by the petitioner are not commercial items because they are neither purchased nor sold. However, to develop these photographs employment of skill and labour is essential. It may be mentioned that petitioner does not carry on any sale of photographs of national leaders, God and Goddess.</p><p style="text-align: justify;">4. After the passing of 46th amendment of the Constitution of India and consequent amendments thereto in Orissa Sales Tax Act (OST Act), the Sales Tax Officer, Bhubaneswar-II Circle, Bhubaneswar sent notices to assess the petitioner as an unregistered dealer under Section 12 (5) of the OST Act, inter alia, contending that the petitioner's activities can be called 'works contract'. Pursuant to said notice, the petitioner gave its reply and appeared before the Sales Tax Officer and produced the books of account and documents including Receipts, Purchase Memos, Vouchers, Ledger and thereby denied its liability under the OST Act. The petitioner also submitted objection petitions on various dates i.e. 28.12.1985, 10.1.1986, 20.2.1986 and 29.2.1988 contending, inter alia, that the petitioner has no sales tax liability under OST Act and the notices, which were issued, are without jurisdiction.</p><p style="text-align: justify;">5. Ignoring the said objections of the petitioner, the Sales Tax Officer, Bhubaneswar-II Circle, Bhubaneswar assessed the petitioner as an unregistered dealer, inter alia, holding that the petitioner is liable to pay sales tax as petitioner has been alleged to carry activities of 'works contract'. Therefore, orders of assessment being dated 29.2.1988 for the years 1984-85 (9/84 to 3/85), 1985-86 and 1986- 87 under Section 12(5) of OST Act and under Rule 5 of the Orissa Additional Sales Tax Rules, 1975 were passed and a tax of Rs. 20,765.00 and penalty of Rs. 5,000.00 totalling to Rs. 25,765.00 was imposed on the petitioner. The petitioner then filed the First Appeal before the learned Assistant Commissioner of Sales Tax. The First Appellate Authority by an order dated 27.9.1991 confirmed the levy of tax under the OST Act, but reduced the penalty to Rs. 1250.00. Thereupon, the petitioner filed the Second Appeal before the Orissa Sales Tax Tribunal, Cuttack. The said Tribunal heard the Second Appeal and in course of hearing, the petitioner raised various contentions. Ultimately, the Tribunal upheld the levy of tax but deleted the penalty.</p><p style="text-align: justify;">6. Thereafter the petitioner came up with a reference application under Section 24(1) of the Orissa Sales Tax Act framing certain questions for being referred to the Hon'ble High Court. The said prayer of the petitioner was rejected by the Tribunal. Then the petitioner moved Hon'ble High Court under Section 24(2)(b) of the Orissa Sales Tax Act, 1947 whereupon the High Court directed the Tribunal to state to case and refer the questions under Section 24(3) of the OST Act for a decision of the High Court.</p><p style="text-align: justify;">7. Accordingly, the Tribunal stated the case and referred the aforesaid questions for a decision of the High Court.</p><p style="text-align: justify;">8. Learned Counsel for the petitioner before the High Court submitted that in the transaction in question, there is no contract of sale between the petitioner and the client. It is only a contract of service and the photographs, which the petitioner produced by supplying the same has no commercial value and are not marketable. So, there is no question of a works contract. It is the consistent stand of the petitioner that the present photographs which are produced by the petitioner have no utility or value to any other person than the customer. By developing such photographs, the petitioner only renders service to his customers. The customer pays for the service rendered by the petitioner. It is the contention of the petitioner that his activity is similar to that of consulting firm preparing plan and sketches pursuant to client's specification or professional giving opinion on papers. All those activities are done to serve the client. Therefore, this does not come within the purview of the definition of 'goods', 'sale', 'dealer' or 'works contract'. It is the petitioner's case that he purchased the goods, namely, papers on payment of sales tax. Further levy of tax on the personal service rendered to the client of the petitioner will amount to double taxation. It is also the contention of the petitioner that the paper which is used in the photography are incidental and insignificant.</p><p style="text-align: justify;">9. In support of its contention, learned Counsel for the petitioner has relied on several judgments. First reliance was place on the judgment of the Supreme Court in the case of Sales Tax Officer v. B.C. Kame reported in 39 STC 237(SC). At page 241 of the report, learned Judges of the Supreme Court held that a photographer takes the photograph and develops the negatives and does other photographic work and thereafter supplies the prints to his client. By doing so he cannot be said to enter into a contract for sale of goods. On the other hand, the contract is for use of skill and labour by the photographer to bring about the desired result. Learned Judges held that the job of a photographer is a contract for work and labour and it is not a contract of sale.</p><p style="text-align: justify;">10. Reliance was also placed on a judgment of this High Court in the case of Photo Emporium v. Addl. District Magistrate reported in 77 STC 199 in which this High Court followed the ratio of the judgment of the Supreme Court in the case of B.C. Kame. In that case, the stand of the Revenue was disapproved by the Orissa High Court.</p><p style="text-align: justify;">11. Similar view was taken in 110 STC 145 in the case of Foto Colour Labs Pvt. Ltd. v. Commercial Taxes Officer where the Tribunal held that the transfer of paper in the photograph is purely incidental and payment is only taken to give positive prints and not to get the photo papers. Therefore, the contract in between the petitioner and his client is not a contract of sale, and neither directly or indirectly works contract is involved in the supply of photo papers. Similar view was taken by the West Bengal Taxation Tribunal in the case of Studio Kamalalaya v. Commercial Tax Officer reported in 89 STC 307.</p><p style="text-align: justify;">12. In the case of Bavens v. Onion of India report in 97 STC 161, learned Judges held that when a photographer takes a photograph of his customer, he develops the negative and supplies positive prints in the desired size to the customer. In doing so the photographer uses his own camera and his own film. The negative belongs to the photographer and not to the customer. No basic goods are provided by the customer which are subjected to processing by the photographer so as to make the contract a works contract. There is no accretion to goods or property or the nucleus of a property which belongs to the customer. It is the skill of the photographer which is most important to get the desired result.</p><p style="text-align: justify;">13. Hon'ble Karnataka High Court followed the same principle in the case of Keshoram Surlndranath Photo-mag Pvt. Ltd. v. Assistant Commissioner of Commercial Taxes reported in 121 STC 175. In that judgment, learned Judges of the Karnataka High Court relied on the judgment of the Supreme Court in B.C. Kame's case and came to the conclusion that in the job of the photographer in supplying positive prints to his customer, no works contract is involved and photographs are not marketable or saleable commodity and as such no tax can be levied on it.</p><p style="text-align: justify;">14. Against the said judgment of the Karnataka High Court, the State of Karnataka High Court filed a S.L.P. before the Hon'ble Supreme Court bearing SLP Nos. 6136-6163 of 2000 and the Hon'ble Supreme Court dismissed the SLP on 20th April, 2000.</p><p style="text-align: justify;">15. In the case of Rainbow Colour Lab v. State of M.P. learned Judges of the Hon'ble Supreme Court reiterated its judgment in B.C. Kame's case and came to the following conclusion:</p><p style="text-align: justify;">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.</p><p style="text-align: justify;">Hon'ble Supreme Court in Bharat Sanchar Nigam Ltd. v. Union of India reported in 145 STC 91 again reiterated the principle in B.C. Kame's case and held that the work done by the photographer is only in the nature of a service contract not involving any sale of goods and held that the stand taken by the State cannot be sustained.</p><p style="text-align: justify;">16. Learned Counsel for the petitioner submitted that the photographs taken by the petitioner are not goods which can be sold and is not a marketable commodity like any other goods. When the copies of photographs are made out, they have no utility or value to any other person than the customer. It is already admitted that the papers utilized for photographs are tax paid goods. Therefore, it is contended by the learned Counsel for the petitioner that the work of photography does not come within the purview of works contract as defined in Section 2(jj) of the Orissa Sales Tax Act.</p><p style="text-align: justify;">17. Learned Counsel for the Revenue in this case virtually did not contest the submission made by the learned Counsel for the petitioner and in support of his contention, learned Counsel for the Revenue relied on a decision of the Supreme Court in the case of Imagic Creative Pvt. Ltd. v. Commissioner of Commercial Taxes and Ors. reported in (2008) 10 RC 236. In that judgment, learned Judges held that since the contract in question is a service contract, it is difficult to hold that in a case of this nature, sales tax would be payable on the value of the entire contract irrespective of the element of service provided.</p><p style="text-align: justify;">For the reasons discussed above, we answer the first question in the negative and the second question, in the affirmative. We thus answer both the questions in favour of the assessee and against the Revenue.</p><p style="text-align: justify;">The three revision applications are thus disposed of.</p><p style="text-align: justify;">No costs.</p><p style="text-align: justify;">B.N. Mahapatra, J.</p><p style="text-align: justify;">18. I agree.<p style="text-align: justify;"></p><p style="text-align: justify;">',
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		'casenote' => 'Sales Tax - Assessment - Contract of Sale - Section 12 (5) of Orissa Sales Tax 1947 - Petitioner carries on business of processing and developing photography - Revenue assessed petitioner under Section 12(5) of Act on ground that activities of petitioner can be called works contract - Petitioner approached to Assistant of Sales Tax on ground that there is no contract of sale between the petitioner and the client, it is only service - Dismissed and affirmed by Tribunal - Hence present petition - Whether Tribunal is right to held that tax is exigible for photographs as execution of works contract or not? - Held, as per precedent laid down by Supreme Court in case of Sales Tax Officer v. B.C. Kame that photographer takes photograph and develops negatives and does other photographic work and thereafter supplies prints to his client - By doing so he cannot be said to enter into contract for sale of goods - Therefore, job of photographer is contract for work and labour and it is not contract of sale - Revenue committed mistake in assessing petitioner under Section 12(5) of Act on basis of contract of sale - Petition disposed of accordingly  - STATE FINANCIAL CORPORATIONS ACT, 1951 [63/1951]. Section 29; [P.K. Tripathy, A.K. Parichha & N.Prusty, JJ] Discharge of loan  Orissa Forest Act (14 of 1972), Section 56  Confiscation of vehicle - Held, The Authorities under Section 56 of the Orissa Forest Act, 1972 are not obliged to release the vehicle from the confiscation proceeding or to pay the sale proceeds of the vehicle after the order of confiscation in favour of Orissa State Financial Corporation when such vehicles were purchased on being financed by the Orissa State Financial Corporation and the loan had not been liquidated by the date of the seizure/confiscation of the vehicle. Concept of first charge or second charge has no applicability when the vehicle is not otherwise disposed of to determine the liabilities of the loanee. On the other hand the vehicle having been found indulged in forest offences was made subject matter of a confiscation proceedings, and therefore, the procedure followed for confiscation of the vehicle and for its sale is punitive in nature and not with a view to give benefit to anybody including the Department which initiated the confiscation proceeding. Apart from that, the claim of the Orissa State Financial Corporation as against its loanee (who had taken the vehicle on hire- purchase agreement) brings the loanee and the sureties within the default clause under the State Financial Corporation Act, 1951 or the heirs and successors of such persons. Procedure is provided in the Act, 1951 and the Rules thereof about the manner in which such loan is to be recovered, and in that context only the vehicle under the hire-purchase agreement is placed as the first charge. If such property is not available for any reason, then the loan is not automatically waived or the loanee and his sureties are not automatically redeemed of the liabilities to repay. The Financial Corporation is concerned with repayment of loan either from the property or persons offered as surety. Thus, a vehicle, which is subject matter of confiscation proceeding under the Act, 1872, being not available to the Orissa State Financial Corporation for adjustment of the unpaid loan, that does not at all bring out an anomalous situation so as to defeat the right of the Orissa State Financial Corporation. Agreement between the Orissa State Financial Corporation and the loanee is a pure and simple contract governed by the provisions of the Contract Act, 1872 read with the provisions in the Act, 1951 and its Rules. On the other hand, a confiscation proceeding under the Act, 1972 is punitive in nature for commission of a forest offence. Thus, by virtue of the provision in Section 56 read with Section 64 (2) of the Act, 1972, the action taken for confiscation of the vehicle cannot be extended to grant protection of the loan advanced by Orissa State Financial Corporation. By doing that it amounts to grant premium to the pick-pockets in as much as, by making payment of the confiscation amount in favour of the Orissa State Financial Corporation the loan burden of the accused of the forest offence is reduced to the extent of the sale proceeds of the vehicle. In other words, on payment of the sale proceeds of the confiscation proceeding to the Orissa State Financial Corporation towards discharge of the loan account of the accused of a forest offence, it would lead to a system to reward him by repayment of his loan. Then it does not become a penalty nor the action become punitive, but it remains as a reward to the accused of forest offence. Such a concept is totally not conceivable from any provision in the Act, 1972 or the Act, 1951. [AIR 2002 Orissa 130 Overruled]. -- STATE FINANCIAL CORPORATIONS ACT, 1951. 
Section 29; Discharge of loan  Orissa Forest Act (14 of 1972), Section 56  Confiscation of vehicle - Held, The Authorities under Section 56 of the Orissa Forest Act, 1972 are not obliged to release the vehicle from the confiscation proceeding or to pay the sale proceeds of the vehicle after the order of confiscation in favour of Orissa State Financial Corporation when such vehicles were purchased on being financed by the Orissa State Financial Corporation and the loan had not been liquidated by the date of the seizure/confiscation of the vehicle. Concept of first charge or second charge has no applicability when the vehicle is not otherwise disposed of to determine the liabilities of the loanee. On the other hand the vehicle having been found indulged in forest offences was made subject matter of a confiscation proceedings, and therefore, the procedure followed for confiscation of the vehicle and for its sale is punitive in nature and not with a view to give benefit to anybody including the Department which initiated the confiscation proceeding. Apart from that, the claim of the Orissa State Financial Corporation as against its loanee (who had taken the vehicle on hire- purchase agreement) brings the loanee and the sureties within the default clause under the State Financial Corporation Act, 1951 or the heirs and successors of such persons. Procedure is provided in the Act, 1951 and the Rules thereof about the manner in which such loan is to be recovered, and in that context only the vehicle under the hire-purchase agreement is placed as the first charge. If such property is not available for any reason, then the loan is not automatically waived or the loanee and his sureties are not automatically redeemed of the liabilities to repay. The Financial Corporation is concerned with repayment of loan either from the property or persons offered as surety. Thus, a vehicle, which is subject matter of confiscation proceeding under the Act, 1872, being not available to the Orissa State Financial Corporation for adjustment of the unpaid loan, that does not at all bring out an anomalous situation so as to defeat the right of the Orissa State Financial Corporation. Agreement between the Orissa State Financial Corporation and the loanee is a pure and simple contract governed by the provisions of the Contract Act, 1872 read with the provisions in the Act, 1951 and its Rules. On the other hand, a confiscation proceeding under the Act, 1972 is punitive in nature for commission of a forest offence. Thus, by virtue of the provision in Section 56 read with Section 64 (2) of the Act, 1972, the action taken for confiscation of the vehicle cannot be extended to grant protection of the loan advanced by Orissa State Financial Corporation. By doing that it amounts to grant premium to the pick-pockets in as much as, by making payment of the confiscation amount in favour of the Orissa State Financial Corporation the loan burden of the accused of the forest offence is reduced to the extent of the sale proceeds of the vehicle. In other words, on payment of the sale proceeds of the confiscation proceeding to the Orissa State Financial Corporation towards discharge of the loan account of the accused of a forest offence, it would lead to a system to reward him by repayment of his loan. Then it does not become a penalty nor the action become punitive, but it remains as a reward to the accused of forest offence. Such a concept is totally not conceivable from any provision in the Act, 1972 or the Act, 1951. [AIR 2002 Orissa 130 Overruled].  -  In that case, the stand of the Revenue was disapproved by the Orissa High Court. 16. Learned Counsel for the petitioner submitted that the photographs taken by the petitioner are not goods which can be sold and is not a marketable commodity like any other goods.',
		'caseanalysis' => null,
		'casesref' => 'Imagic Creative Pvt. Ltd. v. Commissioner of Commercial Taxes and Ors.;',
		'citingcases' => '',
		'counselplain' => '',
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		'court' => 'Orissa',
		'court_type' => 'HC',
		'decidedon' => '2008-04-02',
		'deposition' => '',
		'favorof' => null,
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		'judge' => ' A.K. Ganguly, C.J. and; B.N. Mahapatra, J.',
		'judgement' => '<p>A.K. Ganguly, C.J.</p><p>1. Initially three S.J.Cs. being S.J.C. Nos. 10 of 1997, 8 of 1997 and 9 of 1997 were filed and subsequently renumbered as STREV Nos. 212, 214 and 216 of 2007 respectively. In view of the common questions of facts and law, all the three Revision Applications are heard and disposed of together.</p><p>2. The following questions of law arising out of the order passed by the Orissa Sales Tax Tribunal on 8.12.1993 in Second Appeal Nos. 3345 to 3350 of 1991-92 have been referred to this Hon'ble High Court in terms of the order of this Hon'ble Court dated 24.2.1997. The questions are:</p><p>(i) Whether on the facts and in the circumstances of the case, the Tribunal is right to held that tax is exigible for photographs as execution of works contract ?</p><p>(ii) Whether on the facts and in the circumstances of the case, the conclusion of the Tribunal is perverse due to non-consideration and mis-consideration of facts and law and, therefore, it is liable to be set aside for re-hearing ?</p><p>3. The materials facts out of which those questions arise are that the petitioner carries on the business of processing and developing photography. In the usual course of business, the petitioner takes photographs of persons or of family and then develops the negative by employing his skill and labour and then supplies the photographs to the clients. These photographs which are prepared by the petitioner are not commercial items because they are neither purchased nor sold. However, to develop these photographs employment of skill and labour is essential. It may be mentioned that petitioner does not carry on any sale of photographs of national leaders, God and Goddess.</p><p>4. After the passing of 46th amendment of the Constitution of India and consequent amendments thereto in Orissa Sales Tax Act (OST Act), the Sales Tax Officer, Bhubaneswar-II Circle, Bhubaneswar sent notices to assess the petitioner as an unregistered dealer under Section 12 (5) of the OST Act, inter alia, contending that the petitioner's activities can be called 'works contract'. Pursuant to said notice, the petitioner gave its reply and appeared before the Sales Tax Officer and produced the books of account and documents including Receipts, Purchase Memos, Vouchers, Ledger and thereby denied its liability under the OST Act. The petitioner also submitted objection petitions on various dates i.e. 28.12.1985, 10.1.1986, 20.2.1986 and 29.2.1988 contending, inter alia, that the petitioner has no sales tax liability under OST Act and the notices, which were issued, are without jurisdiction.</p><p>5. Ignoring the said objections of the petitioner, the Sales Tax Officer, Bhubaneswar-II Circle, Bhubaneswar assessed the petitioner as an unregistered dealer, inter alia, holding that the petitioner is liable to pay sales tax as petitioner has been alleged to carry activities of 'works contract'. Therefore, orders of assessment being dated 29.2.1988 for the years 1984-85 (9/84 to 3/85), 1985-86 and 1986- 87 under Section 12(5) of OST Act and under Rule 5 of the Orissa Additional Sales Tax Rules, 1975 were passed and a tax of Rs. 20,765.00 and penalty of Rs. 5,000.00 totalling to Rs. 25,765.00 was imposed on the petitioner. The petitioner then filed the First Appeal before the learned Assistant Commissioner of Sales Tax. The First Appellate Authority by an order dated 27.9.1991 confirmed the levy of tax under the OST Act, but reduced the penalty to Rs. 1250.00. Thereupon, the petitioner filed the Second Appeal before the Orissa Sales Tax Tribunal, Cuttack. The said Tribunal heard the Second Appeal and in course of hearing, the petitioner raised various contentions. Ultimately, the Tribunal upheld the levy of tax but deleted the penalty.</p><p>6. Thereafter the petitioner came up with a reference application under Section 24(1) of the Orissa Sales Tax Act framing certain questions for being referred to the Hon'ble High Court. The said prayer of the petitioner was rejected by the Tribunal. Then the petitioner moved Hon'ble High Court under Section 24(2)(b) of the Orissa Sales Tax Act, 1947 whereupon the High Court directed the Tribunal to state to case and refer the questions under Section 24(3) of the OST Act for a decision of the High Court.</p><p>7. Accordingly, the Tribunal stated the case and referred the aforesaid questions for a decision of the High Court.</p><p>8. Learned Counsel for the petitioner before the High Court submitted that in the transaction in question, there is no contract of sale between the petitioner and the client. It is only a contract of service and the photographs, which the petitioner produced by supplying the same has no commercial value and are not marketable. So, there is no question of a works contract. It is the consistent stand of the petitioner that the present photographs which are produced by the petitioner have no utility or value to any other person than the customer. By developing such photographs, the petitioner only renders service to his customers. The customer pays for the service rendered by the petitioner. It is the contention of the petitioner that his activity is similar to that of consulting firm preparing plan and sketches pursuant to client's specification or professional giving opinion on papers. All those activities are done to serve the client. Therefore, this does not come within the purview of the definition of 'goods', 'sale', 'dealer' or 'works contract'. It is the petitioner's case that he purchased the goods, namely, papers on payment of sales tax. Further levy of tax on the personal service rendered to the client of the petitioner will amount to double taxation. It is also the contention of the petitioner that the paper which is used in the photography are incidental and insignificant.</p><p>9. In support of its contention, learned Counsel for the petitioner has relied on several judgments. First reliance was place on the judgment of the Supreme Court in the case of Sales Tax Officer v. B.C. Kame reported in 39 STC 237(SC). At page 241 of the report, learned Judges of the Supreme Court held that a photographer takes the photograph and develops the negatives and does other photographic work and thereafter supplies the prints to his client. By doing so he cannot be said to enter into a contract for sale of goods. On the other hand, the contract is for use of skill and labour by the photographer to bring about the desired result. Learned Judges held that the job of a photographer is a contract for work and labour and it is not a contract of sale.</p><p>10. Reliance was also placed on a judgment of this High Court in the case of Photo Emporium v. Addl. District Magistrate reported in 77 STC 199 in which this High Court followed the ratio of the judgment of the Supreme Court in the case of B.C. Kame. In that case, the stand of the Revenue was disapproved by the Orissa High Court.</p><p>11. Similar view was taken in 110 STC 145 in the case of Foto Colour Labs Pvt. Ltd. v. Commercial Taxes Officer where the Tribunal held that the transfer of paper in the photograph is purely incidental and payment is only taken to give positive prints and not to get the photo papers. Therefore, the contract in between the petitioner and his client is not a contract of sale, and neither directly or indirectly works contract is involved in the supply of photo papers. Similar view was taken by the West Bengal Taxation Tribunal in the case of Studio Kamalalaya v. Commercial Tax Officer reported in 89 STC 307.</p><p>12. In the case of Bavens v. Onion of India report in 97 STC 161, learned Judges held that when a photographer takes a photograph of his customer, he develops the negative and supplies positive prints in the desired size to the customer. In doing so the photographer uses his own camera and his own film. The negative belongs to the photographer and not to the customer. No basic goods are provided by the customer which are subjected to processing by the photographer so as to make the contract a works contract. There is no accretion to goods or property or the nucleus of a property which belongs to the customer. It is the skill of the photographer which is most important to get the desired result.</p><p>13. Hon'ble Karnataka High Court followed the same principle in the case of Keshoram Surlndranath Photo-mag Pvt. Ltd. v. Assistant Commissioner of Commercial Taxes reported in 121 STC 175. In that judgment, learned Judges of the Karnataka High Court relied on the judgment of the Supreme Court in B.C. Kame's case and came to the conclusion that in the job of the photographer in supplying positive prints to his customer, no works contract is involved and photographs are not marketable or saleable commodity and as such no tax can be levied on it.</p><p>14. Against the said judgment of the Karnataka High Court, the State of Karnataka High Court filed a S.L.P. before the Hon'ble Supreme Court bearing SLP Nos. 6136-6163 of 2000 and the Hon'ble Supreme Court dismissed the SLP on 20th April, 2000.</p><p>15. In the case of Rainbow Colour Lab v. State of M.P. learned Judges of the Hon'ble Supreme Court reiterated its judgment in B.C. Kame's case and came to the following conclusion:</p><p>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.</p><p>Hon'ble Supreme Court in Bharat Sanchar Nigam Ltd. v. Union of India reported in 145 STC 91 again reiterated the principle in B.C. Kame's case and held that the work done by the photographer is only in the nature of a service contract not involving any sale of goods and held that the stand taken by the State cannot be sustained.</p><p>16. Learned Counsel for the petitioner submitted that the photographs taken by the petitioner are not goods which can be sold and is not a marketable commodity like any other goods. When the copies of photographs are made out, they have no utility or value to any other person than the customer. It is already admitted that the papers utilized for photographs are tax paid goods. Therefore, it is contended by the learned Counsel for the petitioner that the work of photography does not come within the purview of works contract as defined in Section 2(jj) of the Orissa Sales Tax Act.</p><p>17. Learned Counsel for the Revenue in this case virtually did not contest the submission made by the learned Counsel for the petitioner and in support of his contention, learned Counsel for the Revenue relied on a decision of the Supreme Court in the case of Imagic Creative Pvt. Ltd. v. Commissioner of Commercial Taxes and Ors. reported in (2008) 10 RC 236. In that judgment, learned Judges held that since the contract in question is a service contract, it is difficult to hold that in a case of this nature, sales tax would be payable on the value of the entire contract irrespective of the element of service provided.</p><p>For the reasons discussed above, we answer the first question in the negative and the second question, in the affirmative. We thus answer both the questions in favour of the assessee and against the Revenue.</p><p>The three revision applications are thus disposed of.</p><p>No costs.</p><p>B.N. Mahapatra, J.</p><p>18. I agree.<p></p><p>',
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		'prhistory' => '',
		'pubs' => '106(2008)CLT317; 2008(I)OLR953; (2008)17VST289(Orissa)',
		'ratiodecidendi' => '',
		'respondent' => 'Commissioner of Sales Tax',
		'sub' => 'Sales Tax/VAT',
		'link' => null,
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Code Context
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	'title_for_layout' => 'Studio Sujata Vs Commissioner of Sales Tax - Citation 531271 - Court Judgment | ',
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		'Judgement' => array(
			'id' => '531271',
			'acts' => '',
			'appealno' => '',
			'appellant' => 'Studio Sujata',
			'authreffered' => '',
			'casename' => 'Studio Sujata Vs. Commissioner of Sales Tax',
			'casenote' => 'Sales Tax - Assessment - Contract of Sale - Section 12 (5) of Orissa Sales Tax 1947 - Petitioner carries on business of processing and developing photography - Revenue assessed petitioner under Section 12(5) of Act on ground that activities of petitioner can be called works contract - Petitioner approached to Assistant of Sales Tax on ground that there is no contract of sale between the petitioner and the client, it is only service - Dismissed and affirmed by Tribunal - Hence present petition - Whether Tribunal is right to held that tax is exigible for photographs as execution of works contract or not? - Held, as per precedent laid down by Supreme Court in case of Sales Tax Officer v. B.C. Kame that photographer takes photograph and develops negatives and does other photographic work and thereafter supplies prints to his client - By doing so he cannot be said to enter into contract for sale of goods - Therefore, job of photographer is contract for work and labour and it is not contract of sale - Revenue committed mistake in assessing petitioner under Section 12(5) of Act on basis of contract of sale - Petition disposed of accordingly  - STATE FINANCIAL CORPORATIONS ACT, 1951 [63/1951]. Section 29; [P.K. Tripathy, A.K. Parichha & N.Prusty, JJ] Discharge of loan  Orissa Forest Act (14 of 1972), Section 56  Confiscation of vehicle - Held, The Authorities under Section 56 of the Orissa Forest Act, 1972 are not obliged to release the vehicle from the confiscation proceeding or to pay the sale proceeds of the vehicle after the order of confiscation in favour of Orissa State Financial Corporation when such vehicles were purchased on being financed by the Orissa State Financial Corporation and the loan had not been liquidated by the date of the seizure/confiscation of the vehicle. Concept of first charge or second charge has no applicability when the vehicle is not otherwise disposed of to determine the liabilities of the loanee. On the other hand the vehicle having been found indulged in forest offences was made subject matter of a confiscation proceedings, and therefore, the procedure followed for confiscation of the vehicle and for its sale is punitive in nature and not with a view to give benefit to anybody including the Department which initiated the confiscation proceeding. Apart from that, the claim of the Orissa State Financial Corporation as against its loanee (who had taken the vehicle on hire- purchase agreement) brings the loanee and the sureties within the default clause under the State Financial Corporation Act, 1951 or the heirs and successors of such persons. Procedure is provided in the Act, 1951 and the Rules thereof about the manner in which such loan is to be recovered, and in that context only the vehicle under the hire-purchase agreement is placed as the first charge. If such property is not available for any reason, then the loan is not automatically waived or the loanee and his sureties are not automatically redeemed of the liabilities to repay. The Financial Corporation is concerned with repayment of loan either from the property or persons offered as surety. Thus, a vehicle, which is subject matter of confiscation proceeding under the Act, 1872, being not available to the Orissa State Financial Corporation for adjustment of the unpaid loan, that does not at all bring out an anomalous situation so as to defeat the right of the Orissa State Financial Corporation. Agreement between the Orissa State Financial Corporation and the loanee is a pure and simple contract governed by the provisions of the Contract Act, 1872 read with the provisions in the Act, 1951 and its Rules. On the other hand, a confiscation proceeding under the Act, 1972 is punitive in nature for commission of a forest offence. Thus, by virtue of the provision in Section 56 read with Section 64 (2) of the Act, 1972, the action taken for confiscation of the vehicle cannot be extended to grant protection of the loan advanced by Orissa State Financial Corporation. By doing that it amounts to grant premium to the pick-pockets in as much as, by making payment of the confiscation amount in favour of the Orissa State Financial Corporation the loan burden of the accused of the forest offence is reduced to the extent of the sale proceeds of the vehicle. In other words, on payment of the sale proceeds of the confiscation proceeding to the Orissa State Financial Corporation towards discharge of the loan account of the accused of a forest offence, it would lead to a system to reward him by repayment of his loan. Then it does not become a penalty nor the action become punitive, but it remains as a reward to the accused of forest offence. Such a concept is totally not conceivable from any provision in the Act, 1972 or the Act, 1951. [AIR 2002 Orissa 130 Overruled]. -- STATE FINANCIAL CORPORATIONS ACT, 1951. 
Section 29; Discharge of loan  Orissa Forest Act (14 of 1972), Section 56  Confiscation of vehicle - Held, The Authorities under Section 56 of the Orissa Forest Act, 1972 are not obliged to release the vehicle from the confiscation proceeding or to pay the sale proceeds of the vehicle after the order of confiscation in favour of Orissa State Financial Corporation when such vehicles were purchased on being financed by the Orissa State Financial Corporation and the loan had not been liquidated by the date of the seizure/confiscation of the vehicle. Concept of first charge or second charge has no applicability when the vehicle is not otherwise disposed of to determine the liabilities of the loanee. On the other hand the vehicle having been found indulged in forest offences was made subject matter of a confiscation proceedings, and therefore, the procedure followed for confiscation of the vehicle and for its sale is punitive in nature and not with a view to give benefit to anybody including the Department which initiated the confiscation proceeding. Apart from that, the claim of the Orissa State Financial Corporation as against its loanee (who had taken the vehicle on hire- purchase agreement) brings the loanee and the sureties within the default clause under the State Financial Corporation Act, 1951 or the heirs and successors of such persons. Procedure is provided in the Act, 1951 and the Rules thereof about the manner in which such loan is to be recovered, and in that context only the vehicle under the hire-purchase agreement is placed as the first charge. If such property is not available for any reason, then the loan is not automatically waived or the loanee and his sureties are not automatically redeemed of the liabilities to repay. The Financial Corporation is concerned with repayment of loan either from the property or persons offered as surety. Thus, a vehicle, which is subject matter of confiscation proceeding under the Act, 1872, being not available to the Orissa State Financial Corporation for adjustment of the unpaid loan, that does not at all bring out an anomalous situation so as to defeat the right of the Orissa State Financial Corporation. Agreement between the Orissa State Financial Corporation and the loanee is a pure and simple contract governed by the provisions of the Contract Act, 1872 read with the provisions in the Act, 1951 and its Rules. On the other hand, a confiscation proceeding under the Act, 1972 is punitive in nature for commission of a forest offence. Thus, by virtue of the provision in Section 56 read with Section 64 (2) of the Act, 1972, the action taken for confiscation of the vehicle cannot be extended to grant protection of the loan advanced by Orissa State Financial Corporation. By doing that it amounts to grant premium to the pick-pockets in as much as, by making payment of the confiscation amount in favour of the Orissa State Financial Corporation the loan burden of the accused of the forest offence is reduced to the extent of the sale proceeds of the vehicle. In other words, on payment of the sale proceeds of the confiscation proceeding to the Orissa State Financial Corporation towards discharge of the loan account of the accused of a forest offence, it would lead to a system to reward him by repayment of his loan. Then it does not become a penalty nor the action become punitive, but it remains as a reward to the accused of forest offence. Such a concept is totally not conceivable from any provision in the Act, 1972 or the Act, 1951. [AIR 2002 Orissa 130 Overruled].  -  In that case, the stand of the Revenue was disapproved by the Orissa High Court. 16. Learned Counsel for the petitioner submitted that the photographs taken by the petitioner are not goods which can be sold and is not a marketable commodity like any other goods.',
			'caseanalysis' => null,
			'casesref' => 'Imagic Creative Pvt. Ltd. v. Commissioner of Commercial Taxes and Ors.;',
			'citingcases' => '',
			'counselplain' => '',
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			'court' => 'Orissa',
			'court_type' => 'HC',
			'decidedon' => '2008-04-02',
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			'judge' => ' A.K. Ganguly, C.J. and; B.N. Mahapatra, J.',
			'judgement' => '<p style="text-align: justify;">A.K. Ganguly, C.J.</p><p style="text-align: justify;">1. Initially three S.J.Cs. being S.J.C. Nos. 10 of 1997, 8 of 1997 and 9 of 1997 were filed and subsequently renumbered as STREV Nos. 212, 214 and 216 of 2007 respectively. In view of the common questions of facts and law, all the three Revision Applications are heard and disposed of together.</p><p style="text-align: justify;">2. The following questions of law arising out of the order passed by the Orissa Sales Tax Tribunal on 8.12.1993 in Second Appeal Nos. 3345 to 3350 of 1991-92 have been referred to this Hon'ble High Court in terms of the order of this Hon'ble Court dated 24.2.1997. The questions are:</p><p style="text-align: justify;">(i) Whether on the facts and in the circumstances of the case, the Tribunal is right to held that tax is exigible for photographs as execution of works contract ?</p><p style="text-align: justify;">(ii) Whether on the facts and in the circumstances of the case, the conclusion of the Tribunal is perverse due to non-consideration and mis-consideration of facts and law and, therefore, it is liable to be set aside for re-hearing ?</p><p style="text-align: justify;">3. The materials facts out of which those questions arise are that the petitioner carries on the business of processing and developing photography. In the usual course of business, the petitioner takes photographs of persons or of family and then develops the negative by employing his skill and labour and then supplies the photographs to the clients. These photographs which are prepared by the petitioner are not commercial items because they are neither purchased nor sold. However, to develop these photographs employment of skill and labour is essential. It may be mentioned that petitioner does not carry on any sale of photographs of national leaders, God and Goddess.</p><p style="text-align: justify;">4. After the passing of 46th amendment of the Constitution of India and consequent amendments thereto in Orissa Sales Tax Act (OST Act), the Sales Tax Officer, Bhubaneswar-II Circle, Bhubaneswar sent notices to assess the petitioner as an unregistered dealer under Section 12 (5) of the OST Act, inter alia, contending that the petitioner's activities can be called 'works contract'. Pursuant to said notice, the petitioner gave its reply and appeared before the Sales Tax Officer and produced the books of account and documents including Receipts, Purchase Memos, Vouchers, Ledger and thereby denied its liability under the OST Act. The petitioner also submitted objection petitions on various dates i.e. 28.12.1985, 10.1.1986, 20.2.1986 and 29.2.1988 contending, inter alia, that the petitioner has no sales tax liability under OST Act and the notices, which were issued, are without jurisdiction.</p><p style="text-align: justify;">5. Ignoring the said objections of the petitioner, the Sales Tax Officer, Bhubaneswar-II Circle, Bhubaneswar assessed the petitioner as an unregistered dealer, inter alia, holding that the petitioner is liable to pay sales tax as petitioner has been alleged to carry activities of 'works contract'. Therefore, orders of assessment being dated 29.2.1988 for the years 1984-85 (9/84 to 3/85), 1985-86 and 1986- 87 under Section 12(5) of OST Act and under Rule 5 of the Orissa Additional Sales Tax Rules, 1975 were passed and a tax of Rs. 20,765.00 and penalty of Rs. 5,000.00 totalling to Rs. 25,765.00 was imposed on the petitioner. The petitioner then filed the First Appeal before the learned Assistant Commissioner of Sales Tax. The First Appellate Authority by an order dated 27.9.1991 confirmed the levy of tax under the OST Act, but reduced the penalty to Rs. 1250.00. Thereupon, the petitioner filed the Second Appeal before the Orissa Sales Tax Tribunal, Cuttack. The said Tribunal heard the Second Appeal and in course of hearing, the petitioner raised various contentions. Ultimately, the Tribunal upheld the levy of tax but deleted the penalty.</p><p style="text-align: justify;">6. Thereafter the petitioner came up with a reference application under Section 24(1) of the Orissa Sales Tax Act framing certain questions for being referred to the Hon'ble High Court. The said prayer of the petitioner was rejected by the Tribunal. Then the petitioner moved Hon'ble High Court under Section 24(2)(b) of the Orissa Sales Tax Act, 1947 whereupon the High Court directed the Tribunal to state to case and refer the questions under Section 24(3) of the OST Act for a decision of the High Court.</p><p style="text-align: justify;">7. Accordingly, the Tribunal stated the case and referred the aforesaid questions for a decision of the High Court.</p><p style="text-align: justify;">8. Learned Counsel for the petitioner before the High Court submitted that in the transaction in question, there is no contract of sale between the petitioner and the client. It is only a contract of service and the photographs, which the petitioner produced by supplying the same has no commercial value and are not marketable. So, there is no question of a works contract. It is the consistent stand of the petitioner that the present photographs which are produced by the petitioner have no utility or value to any other person than the customer. By developing such photographs, the petitioner only renders service to his customers. The customer pays for the service rendered by the petitioner. It is the contention of the petitioner that his activity is similar to that of consulting firm preparing plan and sketches pursuant to client's specification or professional giving opinion on papers. All those activities are done to serve the client. Therefore, this does not come within the purview of the definition of 'goods', 'sale', 'dealer' or 'works contract'. It is the petitioner's case that he purchased the goods, namely, papers on payment of sales tax. Further levy of tax on the personal service rendered to the client of the petitioner will amount to double taxation. It is also the contention of the petitioner that the paper which is used in the photography are incidental and insignificant.</p><p style="text-align: justify;">9. In support of its contention, learned Counsel for the petitioner has relied on several judgments. First reliance was place on the judgment of the Supreme Court in the case of Sales Tax Officer v. B.C. Kame reported in 39 STC 237(SC). At page 241 of the report, learned Judges of the Supreme Court held that a photographer takes the photograph and develops the negatives and does other photographic work and thereafter supplies the prints to his client. By doing so he cannot be said to enter into a contract for sale of goods. On the other hand, the contract is for use of skill and labour by the photographer to bring about the desired result. Learned Judges held that the job of a photographer is a contract for work and labour and it is not a contract of sale.</p><p style="text-align: justify;">10. Reliance was also placed on a judgment of this High Court in the case of Photo Emporium v. Addl. District Magistrate reported in 77 STC 199 in which this High Court followed the ratio of the judgment of the Supreme Court in the case of B.C. Kame. In that case, the stand of the Revenue was disapproved by the Orissa High Court.</p><p style="text-align: justify;">11. Similar view was taken in 110 STC 145 in the case of Foto Colour Labs Pvt. Ltd. v. Commercial Taxes Officer where the Tribunal held that the transfer of paper in the photograph is purely incidental and payment is only taken to give positive prints and not to get the photo papers. Therefore, the contract in between the petitioner and his client is not a contract of sale, and neither directly or indirectly works contract is involved in the supply of photo papers. Similar view was taken by the West Bengal Taxation Tribunal in the case of Studio Kamalalaya v. Commercial Tax Officer reported in 89 STC 307.</p><p style="text-align: justify;">12. In the case of Bavens v. Onion of India report in 97 STC 161, learned Judges held that when a photographer takes a photograph of his customer, he develops the negative and supplies positive prints in the desired size to the customer. In doing so the photographer uses his own camera and his own film. The negative belongs to the photographer and not to the customer. No basic goods are provided by the customer which are subjected to processing by the photographer so as to make the contract a works contract. There is no accretion to goods or property or the nucleus of a property which belongs to the customer. It is the skill of the photographer which is most important to get the desired result.</p><p style="text-align: justify;">13. Hon'ble Karnataka High Court followed the same principle in the case of Keshoram Surlndranath Photo-mag Pvt. Ltd. v. Assistant Commissioner of Commercial Taxes reported in 121 STC 175. In that judgment, learned Judges of the Karnataka High Court relied on the judgment of the Supreme Court in B.C. Kame's case and came to the conclusion that in the job of the photographer in supplying positive prints to his customer, no works contract is involved and photographs are not marketable or saleable commodity and as such no tax can be levied on it.</p><p style="text-align: justify;">14. Against the said judgment of the Karnataka High Court, the State of Karnataka High Court filed a S.L.P. before the Hon'ble Supreme Court bearing SLP Nos. 6136-6163 of 2000 and the Hon'ble Supreme Court dismissed the SLP on 20th April, 2000.</p><p style="text-align: justify;">15. In the case of Rainbow Colour Lab v. State of M.P. learned Judges of the Hon'ble Supreme Court reiterated its judgment in B.C. Kame's case and came to the following conclusion:</p><p style="text-align: justify;">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.</p><p style="text-align: justify;">Hon'ble Supreme Court in Bharat Sanchar Nigam Ltd. v. Union of India reported in 145 STC 91 again reiterated the principle in B.C. Kame's case and held that the work done by the photographer is only in the nature of a service contract not involving any sale of goods and held that the stand taken by the State cannot be sustained.</p><p style="text-align: justify;">16. Learned Counsel for the petitioner submitted that the photographs taken by the petitioner are not goods which can be sold and is not a marketable commodity like any other goods. When the copies of photographs are made out, they have no utility or value to any other person than the customer. It is already admitted that the papers utilized for photographs are tax paid goods. Therefore, it is contended by the learned Counsel for the petitioner that the work of photography does not come within the purview of works contract as defined in Section 2(jj) of the Orissa Sales Tax Act.</p><p style="text-align: justify;">17. Learned Counsel for the Revenue in this case virtually did not contest the submission made by the learned Counsel for the petitioner and in support of his contention, learned Counsel for the Revenue relied on a decision of the Supreme Court in the case of Imagic Creative Pvt. Ltd. v. Commissioner of Commercial Taxes and Ors. reported in (2008) 10 RC 236. In that judgment, learned Judges held that since the contract in question is a service contract, it is difficult to hold that in a case of this nature, sales tax would be payable on the value of the entire contract irrespective of the element of service provided.</p><p style="text-align: justify;">For the reasons discussed above, we answer the first question in the negative and the second question, in the affirmative. We thus answer both the questions in favour of the assessee and against the Revenue.</p><p style="text-align: justify;">The three revision applications are thus disposed of.</p><p style="text-align: justify;">No costs.</p><p style="text-align: justify;">B.N. Mahapatra, J.</p><p style="text-align: justify;">18. I agree.<p style="text-align: justify;"></p><p style="text-align: justify;">',
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		'casenote' => 'Sales Tax - Assessment - Contract of Sale - Section 12 (5) of Orissa Sales Tax 1947 - Petitioner carries on business of processing and developing photography - Revenue assessed petitioner under Section 12(5) of Act on ground that activities of petitioner can be called works contract - Petitioner approached to Assistant of Sales Tax on ground that there is no contract of sale between the petitioner and the client, it is only service - Dismissed and affirmed by Tribunal - Hence present petition - Whether Tribunal is right to held that tax is exigible for photographs as execution of works contract or not? - Held, as per precedent laid down by Supreme Court in case of Sales Tax Officer v. B.C. Kame that photographer takes photograph and develops negatives and does other photographic work and thereafter supplies prints to his client - By doing so he cannot be said to enter into contract for sale of goods - Therefore, job of photographer is contract for work and labour and it is not contract of sale - Revenue committed mistake in assessing petitioner under Section 12(5) of Act on basis of contract of sale - Petition disposed of accordingly  - STATE FINANCIAL CORPORATIONS ACT, 1951 [63/1951]. Section 29; [P.K. Tripathy, A.K. Parichha & N.Prusty, JJ] Discharge of loan  Orissa Forest Act (14 of 1972), Section 56  Confiscation of vehicle - Held, The Authorities under Section 56 of the Orissa Forest Act, 1972 are not obliged to release the vehicle from the confiscation proceeding or to pay the sale proceeds of the vehicle after the order of confiscation in favour of Orissa State Financial Corporation when such vehicles were purchased on being financed by the Orissa State Financial Corporation and the loan had not been liquidated by the date of the seizure/confiscation of the vehicle. Concept of first charge or second charge has no applicability when the vehicle is not otherwise disposed of to determine the liabilities of the loanee. On the other hand the vehicle having been found indulged in forest offences was made subject matter of a confiscation proceedings, and therefore, the procedure followed for confiscation of the vehicle and for its sale is punitive in nature and not with a view to give benefit to anybody including the Department which initiated the confiscation proceeding. Apart from that, the claim of the Orissa State Financial Corporation as against its loanee (who had taken the vehicle on hire- purchase agreement) brings the loanee and the sureties within the default clause under the State Financial Corporation Act, 1951 or the heirs and successors of such persons. Procedure is provided in the Act, 1951 and the Rules thereof about the manner in which such loan is to be recovered, and in that context only the vehicle under the hire-purchase agreement is placed as the first charge. If such property is not available for any reason, then the loan is not automatically waived or the loanee and his sureties are not automatically redeemed of the liabilities to repay. The Financial Corporation is concerned with repayment of loan either from the property or persons offered as surety. Thus, a vehicle, which is subject matter of confiscation proceeding under the Act, 1872, being not available to the Orissa State Financial Corporation for adjustment of the unpaid loan, that does not at all bring out an anomalous situation so as to defeat the right of the Orissa State Financial Corporation. Agreement between the Orissa State Financial Corporation and the loanee is a pure and simple contract governed by the provisions of the Contract Act, 1872 read with the provisions in the Act, 1951 and its Rules. On the other hand, a confiscation proceeding under the Act, 1972 is punitive in nature for commission of a forest offence. Thus, by virtue of the provision in Section 56 read with Section 64 (2) of the Act, 1972, the action taken for confiscation of the vehicle cannot be extended to grant protection of the loan advanced by Orissa State Financial Corporation. By doing that it amounts to grant premium to the pick-pockets in as much as, by making payment of the confiscation amount in favour of the Orissa State Financial Corporation the loan burden of the accused of the forest offence is reduced to the extent of the sale proceeds of the vehicle. In other words, on payment of the sale proceeds of the confiscation proceeding to the Orissa State Financial Corporation towards discharge of the loan account of the accused of a forest offence, it would lead to a system to reward him by repayment of his loan. Then it does not become a penalty nor the action become punitive, but it remains as a reward to the accused of forest offence. Such a concept is totally not conceivable from any provision in the Act, 1972 or the Act, 1951. [AIR 2002 Orissa 130 Overruled]. -- STATE FINANCIAL CORPORATIONS ACT, 1951. 
Section 29; Discharge of loan  Orissa Forest Act (14 of 1972), Section 56  Confiscation of vehicle - Held, The Authorities under Section 56 of the Orissa Forest Act, 1972 are not obliged to release the vehicle from the confiscation proceeding or to pay the sale proceeds of the vehicle after the order of confiscation in favour of Orissa State Financial Corporation when such vehicles were purchased on being financed by the Orissa State Financial Corporation and the loan had not been liquidated by the date of the seizure/confiscation of the vehicle. Concept of first charge or second charge has no applicability when the vehicle is not otherwise disposed of to determine the liabilities of the loanee. On the other hand the vehicle having been found indulged in forest offences was made subject matter of a confiscation proceedings, and therefore, the procedure followed for confiscation of the vehicle and for its sale is punitive in nature and not with a view to give benefit to anybody including the Department which initiated the confiscation proceeding. Apart from that, the claim of the Orissa State Financial Corporation as against its loanee (who had taken the vehicle on hire- purchase agreement) brings the loanee and the sureties within the default clause under the State Financial Corporation Act, 1951 or the heirs and successors of such persons. Procedure is provided in the Act, 1951 and the Rules thereof about the manner in which such loan is to be recovered, and in that context only the vehicle under the hire-purchase agreement is placed as the first charge. If such property is not available for any reason, then the loan is not automatically waived or the loanee and his sureties are not automatically redeemed of the liabilities to repay. The Financial Corporation is concerned with repayment of loan either from the property or persons offered as surety. Thus, a vehicle, which is subject matter of confiscation proceeding under the Act, 1872, being not available to the Orissa State Financial Corporation for adjustment of the unpaid loan, that does not at all bring out an anomalous situation so as to defeat the right of the Orissa State Financial Corporation. Agreement between the Orissa State Financial Corporation and the loanee is a pure and simple contract governed by the provisions of the Contract Act, 1872 read with the provisions in the Act, 1951 and its Rules. On the other hand, a confiscation proceeding under the Act, 1972 is punitive in nature for commission of a forest offence. Thus, by virtue of the provision in Section 56 read with Section 64 (2) of the Act, 1972, the action taken for confiscation of the vehicle cannot be extended to grant protection of the loan advanced by Orissa State Financial Corporation. By doing that it amounts to grant premium to the pick-pockets in as much as, by making payment of the confiscation amount in favour of the Orissa State Financial Corporation the loan burden of the accused of the forest offence is reduced to the extent of the sale proceeds of the vehicle. In other words, on payment of the sale proceeds of the confiscation proceeding to the Orissa State Financial Corporation towards discharge of the loan account of the accused of a forest offence, it would lead to a system to reward him by repayment of his loan. Then it does not become a penalty nor the action become punitive, but it remains as a reward to the accused of forest offence. Such a concept is totally not conceivable from any provision in the Act, 1972 or the Act, 1951. [AIR 2002 Orissa 130 Overruled].  -  In that case, the stand of the Revenue was disapproved by the Orissa High Court. 16. Learned Counsel for the petitioner submitted that the photographs taken by the petitioner are not goods which can be sold and is not a marketable commodity like any other goods.',
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		'judge' => ' A.K. Ganguly, C.J. and; B.N. Mahapatra, J.',
		'judgement' => '<p>A.K. Ganguly, C.J.</p><p>1. Initially three S.J.Cs. being S.J.C. Nos. 10 of 1997, 8 of 1997 and 9 of 1997 were filed and subsequently renumbered as STREV Nos. 212, 214 and 216 of 2007 respectively. In view of the common questions of facts and law, all the three Revision Applications are heard and disposed of together.</p><p>2. The following questions of law arising out of the order passed by the Orissa Sales Tax Tribunal on 8.12.1993 in Second Appeal Nos. 3345 to 3350 of 1991-92 have been referred to this Hon'ble High Court in terms of the order of this Hon'ble Court dated 24.2.1997. The questions are:</p><p>(i) Whether on the facts and in the circumstances of the case, the Tribunal is right to held that tax is exigible for photographs as execution of works contract ?</p><p>(ii) Whether on the facts and in the circumstances of the case, the conclusion of the Tribunal is perverse due to non-consideration and mis-consideration of facts and law and, therefore, it is liable to be set aside for re-hearing ?</p><p>3. The materials facts out of which those questions arise are that the petitioner carries on the business of processing and developing photography. In the usual course of business, the petitioner takes photographs of persons or of family and then develops the negative by employing his skill and labour and then supplies the photographs to the clients. These photographs which are prepared by the petitioner are not commercial items because they are neither purchased nor sold. However, to develop these photographs employment of skill and labour is essential. It may be mentioned that petitioner does not carry on any sale of photographs of national leaders, God and Goddess.</p><p>4. After the passing of 46th amendment of the Constitution of India and consequent amendments thereto in Orissa Sales Tax Act (OST Act), the Sales Tax Officer, Bhubaneswar-II Circle, Bhubaneswar sent notices to assess the petitioner as an unregistered dealer under Section 12 (5) of the OST Act, inter alia, contending that the petitioner's activities can be called 'works contract'. Pursuant to said notice, the petitioner gave its reply and appeared before the Sales Tax Officer and produced the books of account and documents including Receipts, Purchase Memos, Vouchers, Ledger and thereby denied its liability under the OST Act. The petitioner also submitted objection petitions on various dates i.e. 28.12.1985, 10.1.1986, 20.2.1986 and 29.2.1988 contending, inter alia, that the petitioner has no sales tax liability under OST Act and the notices, which were issued, are without jurisdiction.</p><p>5. Ignoring the said objections of the petitioner, the Sales Tax Officer, Bhubaneswar-II Circle, Bhubaneswar assessed the petitioner as an unregistered dealer, inter alia, holding that the petitioner is liable to pay sales tax as petitioner has been alleged to carry activities of 'works contract'. Therefore, orders of assessment being dated 29.2.1988 for the years 1984-85 (9/84 to 3/85), 1985-86 and 1986- 87 under Section 12(5) of OST Act and under Rule 5 of the Orissa Additional Sales Tax Rules, 1975 were passed and a tax of Rs. 20,765.00 and penalty of Rs. 5,000.00 totalling to Rs. 25,765.00 was imposed on the petitioner. The petitioner then filed the First Appeal before the learned Assistant Commissioner of Sales Tax. The First Appellate Authority by an order dated 27.9.1991 confirmed the levy of tax under the OST Act, but reduced the penalty to Rs. 1250.00. Thereupon, the petitioner filed the Second Appeal before the Orissa Sales Tax Tribunal, Cuttack. The said Tribunal heard the Second Appeal and in course of hearing, the petitioner raised various contentions. Ultimately, the Tribunal upheld the levy of tax but deleted the penalty.</p><p>6. Thereafter the petitioner came up with a reference application under Section 24(1) of the Orissa Sales Tax Act framing certain questions for being referred to the Hon'ble High Court. The said prayer of the petitioner was rejected by the Tribunal. Then the petitioner moved Hon'ble High Court under Section 24(2)(b) of the Orissa Sales Tax Act, 1947 whereupon the High Court directed the Tribunal to state to case and refer the questions under Section 24(3) of the OST Act for a decision of the High Court.</p><p>7. Accordingly, the Tribunal stated the case and referred the aforesaid questions for a decision of the High Court.</p><p>8. Learned Counsel for the petitioner before the High Court submitted that in the transaction in question, there is no contract of sale between the petitioner and the client. It is only a contract of service and the photographs, which the petitioner produced by supplying the same has no commercial value and are not marketable. So, there is no question of a works contract. It is the consistent stand of the petitioner that the present photographs which are produced by the petitioner have no utility or value to any other person than the customer. By developing such photographs, the petitioner only renders service to his customers. The customer pays for the service rendered by the petitioner. It is the contention of the petitioner that his activity is similar to that of consulting firm preparing plan and sketches pursuant to client's specification or professional giving opinion on papers. All those activities are done to serve the client. Therefore, this does not come within the purview of the definition of 'goods', 'sale', 'dealer' or 'works contract'. It is the petitioner's case that he purchased the goods, namely, papers on payment of sales tax. Further levy of tax on the personal service rendered to the client of the petitioner will amount to double taxation. It is also the contention of the petitioner that the paper which is used in the photography are incidental and insignificant.</p><p>9. In support of its contention, learned Counsel for the petitioner has relied on several judgments. First reliance was place on the judgment of the Supreme Court in the case of Sales Tax Officer v. B.C. Kame reported in 39 STC 237(SC). At page 241 of the report, learned Judges of the Supreme Court held that a photographer takes the photograph and develops the negatives and does other photographic work and thereafter supplies the prints to his client. By doing so he cannot be said to enter into a contract for sale of goods. On the other hand, the contract is for use of skill and labour by the photographer to bring about the desired result. Learned Judges held that the job of a photographer is a contract for work and labour and it is not a contract of sale.</p><p>10. Reliance was also placed on a judgment of this High Court in the case of Photo Emporium v. Addl. District Magistrate reported in 77 STC 199 in which this High Court followed the ratio of the judgment of the Supreme Court in the case of B.C. Kame. In that case, the stand of the Revenue was disapproved by the Orissa High Court.</p><p>11. Similar view was taken in 110 STC 145 in the case of Foto Colour Labs Pvt. Ltd. v. Commercial Taxes Officer where the Tribunal held that the transfer of paper in the photograph is purely incidental and payment is only taken to give positive prints and not to get the photo papers. Therefore, the contract in between the petitioner and his client is not a contract of sale, and neither directly or indirectly works contract is involved in the supply of photo papers. Similar view was taken by the West Bengal Taxation Tribunal in the case of Studio Kamalalaya v. Commercial Tax Officer reported in 89 STC 307.</p><p>12. In the case of Bavens v. Onion of India report in 97 STC 161, learned Judges held that when a photographer takes a photograph of his customer, he develops the negative and supplies positive prints in the desired size to the customer. In doing so the photographer uses his own camera and his own film. The negative belongs to the photographer and not to the customer. No basic goods are provided by the customer which are subjected to processing by the photographer so as to make the contract a works contract. There is no accretion to goods or property or the nucleus of a property which belongs to the customer. It is the skill of the photographer which is most important to get the desired result.</p><p>13. Hon'ble Karnataka High Court followed the same principle in the case of Keshoram Surlndranath Photo-mag Pvt. Ltd. v. Assistant Commissioner of Commercial Taxes reported in 121 STC 175. In that judgment, learned Judges of the Karnataka High Court relied on the judgment of the Supreme Court in B.C. Kame's case and came to the conclusion that in the job of the photographer in supplying positive prints to his customer, no works contract is involved and photographs are not marketable or saleable commodity and as such no tax can be levied on it.</p><p>14. Against the said judgment of the Karnataka High Court, the State of Karnataka High Court filed a S.L.P. before the Hon'ble Supreme Court bearing SLP Nos. 6136-6163 of 2000 and the Hon'ble Supreme Court dismissed the SLP on 20th April, 2000.</p><p>15. In the case of Rainbow Colour Lab v. State of M.P. learned Judges of the Hon'ble Supreme Court reiterated its judgment in B.C. Kame's case and came to the following conclusion:</p><p>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.</p><p>Hon'ble Supreme Court in Bharat Sanchar Nigam Ltd. v. Union of India reported in 145 STC 91 again reiterated the principle in B.C. Kame's case and held that the work done by the photographer is only in the nature of a service contract not involving any sale of goods and held that the stand taken by the State cannot be sustained.</p><p>16. Learned Counsel for the petitioner submitted that the photographs taken by the petitioner are not goods which can be sold and is not a marketable commodity like any other goods. When the copies of photographs are made out, they have no utility or value to any other person than the customer. It is already admitted that the papers utilized for photographs are tax paid goods. Therefore, it is contended by the learned Counsel for the petitioner that the work of photography does not come within the purview of works contract as defined in Section 2(jj) of the Orissa Sales Tax Act.</p><p>17. Learned Counsel for the Revenue in this case virtually did not contest the submission made by the learned Counsel for the petitioner and in support of his contention, learned Counsel for the Revenue relied on a decision of the Supreme Court in the case of Imagic Creative Pvt. Ltd. v. Commissioner of Commercial Taxes and Ors. reported in (2008) 10 RC 236. In that judgment, learned Judges held that since the contract in question is a service contract, it is difficult to hold that in a case of this nature, sales tax would be payable on the value of the entire contract irrespective of the element of service provided.</p><p>For the reasons discussed above, we answer the first question in the negative and the second question, in the affirmative. We thus answer both the questions in favour of the assessee and against the Revenue.</p><p>The three revision applications are thus disposed of.</p><p>No costs.</p><p>B.N. Mahapatra, J.</p><p>18. I agree.<p></p><p>',
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			'casename' => 'Studio Sujata Vs. Commissioner of Sales Tax',
			'casenote' => 'Sales Tax - Assessment - Contract of Sale - Section 12 (5) of Orissa Sales Tax 1947 - Petitioner carries on business of processing and developing photography - Revenue assessed petitioner under Section 12(5) of Act on ground that activities of petitioner can be called works contract - Petitioner approached to Assistant of Sales Tax on ground that there is no contract of sale between the petitioner and the client, it is only service - Dismissed and affirmed by Tribunal - Hence present petition - Whether Tribunal is right to held that tax is exigible for photographs as execution of works contract or not? - Held, as per precedent laid down by Supreme Court in case of Sales Tax Officer v. B.C. Kame that photographer takes photograph and develops negatives and does other photographic work and thereafter supplies prints to his client - By doing so he cannot be said to enter into contract for sale of goods - Therefore, job of photographer is contract for work and labour and it is not contract of sale - Revenue committed mistake in assessing petitioner under Section 12(5) of Act on basis of contract of sale - Petition disposed of accordingly  - STATE FINANCIAL CORPORATIONS ACT, 1951 [63/1951]. Section 29; [P.K. Tripathy, A.K. Parichha & N.Prusty, JJ] Discharge of loan  Orissa Forest Act (14 of 1972), Section 56  Confiscation of vehicle - Held, The Authorities under Section 56 of the Orissa Forest Act, 1972 are not obliged to release the vehicle from the confiscation proceeding or to pay the sale proceeds of the vehicle after the order of confiscation in favour of Orissa State Financial Corporation when such vehicles were purchased on being financed by the Orissa State Financial Corporation and the loan had not been liquidated by the date of the seizure/confiscation of the vehicle. Concept of first charge or second charge has no applicability when the vehicle is not otherwise disposed of to determine the liabilities of the loanee. On the other hand the vehicle having been found indulged in forest offences was made subject matter of a confiscation proceedings, and therefore, the procedure followed for confiscation of the vehicle and for its sale is punitive in nature and not with a view to give benefit to anybody including the Department which initiated the confiscation proceeding. Apart from that, the claim of the Orissa State Financial Corporation as against its loanee (who had taken the vehicle on hire- purchase agreement) brings the loanee and the sureties within the default clause under the State Financial Corporation Act, 1951 or the heirs and successors of such persons. Procedure is provided in the Act, 1951 and the Rules thereof about the manner in which such loan is to be recovered, and in that context only the vehicle under the hire-purchase agreement is placed as the first charge. If such property is not available for any reason, then the loan is not automatically waived or the loanee and his sureties are not automatically redeemed of the liabilities to repay. The Financial Corporation is concerned with repayment of loan either from the property or persons offered as surety. Thus, a vehicle, which is subject matter of confiscation proceeding under the Act, 1872, being not available to the Orissa State Financial Corporation for adjustment of the unpaid loan, that does not at all bring out an anomalous situation so as to defeat the right of the Orissa State Financial Corporation. Agreement between the Orissa State Financial Corporation and the loanee is a pure and simple contract governed by the provisions of the Contract Act, 1872 read with the provisions in the Act, 1951 and its Rules. On the other hand, a confiscation proceeding under the Act, 1972 is punitive in nature for commission of a forest offence. Thus, by virtue of the provision in Section 56 read with Section 64 (2) of the Act, 1972, the action taken for confiscation of the vehicle cannot be extended to grant protection of the loan advanced by Orissa State Financial Corporation. By doing that it amounts to grant premium to the pick-pockets in as much as, by making payment of the confiscation amount in favour of the Orissa State Financial Corporation the loan burden of the accused of the forest offence is reduced to the extent of the sale proceeds of the vehicle. In other words, on payment of the sale proceeds of the confiscation proceeding to the Orissa State Financial Corporation towards discharge of the loan account of the accused of a forest offence, it would lead to a system to reward him by repayment of his loan. Then it does not become a penalty nor the action become punitive, but it remains as a reward to the accused of forest offence. Such a concept is totally not conceivable from any provision in the Act, 1972 or the Act, 1951. [AIR 2002 Orissa 130 Overruled]. -- STATE FINANCIAL CORPORATIONS ACT, 1951. 
Section 29; Discharge of loan  Orissa Forest Act (14 of 1972), Section 56  Confiscation of vehicle - Held, The Authorities under Section 56 of the Orissa Forest Act, 1972 are not obliged to release the vehicle from the confiscation proceeding or to pay the sale proceeds of the vehicle after the order of confiscation in favour of Orissa State Financial Corporation when such vehicles were purchased on being financed by the Orissa State Financial Corporation and the loan had not been liquidated by the date of the seizure/confiscation of the vehicle. Concept of first charge or second charge has no applicability when the vehicle is not otherwise disposed of to determine the liabilities of the loanee. On the other hand the vehicle having been found indulged in forest offences was made subject matter of a confiscation proceedings, and therefore, the procedure followed for confiscation of the vehicle and for its sale is punitive in nature and not with a view to give benefit to anybody including the Department which initiated the confiscation proceeding. Apart from that, the claim of the Orissa State Financial Corporation as against its loanee (who had taken the vehicle on hire- purchase agreement) brings the loanee and the sureties within the default clause under the State Financial Corporation Act, 1951 or the heirs and successors of such persons. Procedure is provided in the Act, 1951 and the Rules thereof about the manner in which such loan is to be recovered, and in that context only the vehicle under the hire-purchase agreement is placed as the first charge. If such property is not available for any reason, then the loan is not automatically waived or the loanee and his sureties are not automatically redeemed of the liabilities to repay. The Financial Corporation is concerned with repayment of loan either from the property or persons offered as surety. Thus, a vehicle, which is subject matter of confiscation proceeding under the Act, 1872, being not available to the Orissa State Financial Corporation for adjustment of the unpaid loan, that does not at all bring out an anomalous situation so as to defeat the right of the Orissa State Financial Corporation. Agreement between the Orissa State Financial Corporation and the loanee is a pure and simple contract governed by the provisions of the Contract Act, 1872 read with the provisions in the Act, 1951 and its Rules. On the other hand, a confiscation proceeding under the Act, 1972 is punitive in nature for commission of a forest offence. Thus, by virtue of the provision in Section 56 read with Section 64 (2) of the Act, 1972, the action taken for confiscation of the vehicle cannot be extended to grant protection of the loan advanced by Orissa State Financial Corporation. By doing that it amounts to grant premium to the pick-pockets in as much as, by making payment of the confiscation amount in favour of the Orissa State Financial Corporation the loan burden of the accused of the forest offence is reduced to the extent of the sale proceeds of the vehicle. In other words, on payment of the sale proceeds of the confiscation proceeding to the Orissa State Financial Corporation towards discharge of the loan account of the accused of a forest offence, it would lead to a system to reward him by repayment of his loan. Then it does not become a penalty nor the action become punitive, but it remains as a reward to the accused of forest offence. Such a concept is totally not conceivable from any provision in the Act, 1972 or the Act, 1951. [AIR 2002 Orissa 130 Overruled].  -  In that case, the stand of the Revenue was disapproved by the Orissa High Court. 16. Learned Counsel for the petitioner submitted that the photographs taken by the petitioner are not goods which can be sold and is not a marketable commodity like any other goods.',
			'caseanalysis' => null,
			'casesref' => 'Imagic Creative Pvt. Ltd. v. Commissioner of Commercial Taxes and Ors.;',
			'citingcases' => '',
			'counselplain' => '',
			'counseldef' => '',
			'court' => 'Orissa',
			'court_type' => 'HC',
			'decidedon' => '2008-04-02',
			'deposition' => '',
			'favorof' => null,
			'findings' => null,
			'judge' => ' A.K. Ganguly, C.J. and; B.N. Mahapatra, J.',
			'judgement' => '<p style="text-align: justify;">A.K. Ganguly, C.J.</p><p style="text-align: justify;">1. Initially three S.J.Cs. being S.J.C. Nos. 10 of 1997, 8 of 1997 and 9 of 1997 were filed and subsequently renumbered as STREV Nos. 212, 214 and 216 of 2007 respectively. In view of the common questions of facts and law, all the three Revision Applications are heard and disposed of together.</p><p style="text-align: justify;">2. The following questions of law arising out of the order passed by the Orissa Sales Tax Tribunal on 8.12.1993 in Second Appeal Nos. 3345 to 3350 of 1991-92 have been referred to this Hon'ble High Court in terms of the order of this Hon'ble Court dated 24.2.1997. The questions are:</p><p style="text-align: justify;">(i) Whether on the facts and in the circumstances of the case, the Tribunal is right to held that tax is exigible for photographs as execution of works contract ?</p><p style="text-align: justify;">(ii) Whether on the facts and in the circumstances of the case, the conclusion of the Tribunal is perverse due to non-consideration and mis-consideration of facts and law and, therefore, it is liable to be set aside for re-hearing ?</p><p style="text-align: justify;">3. The materials facts out of which those questions arise are that the petitioner carries on the business of processing and developing photography. In the usual course of business, the petitioner takes photographs of persons or of family and then develops the negative by employing his skill and labour and then supplies the photographs to the clients. These photographs which are prepared by the petitioner are not commercial items because they are neither purchased nor sold. However, to develop these photographs employment of skill and labour is essential. It may be mentioned that petitioner does not carry on any sale of photographs of national leaders, God and Goddess.</p><p style="text-align: justify;">4. After the passing of 46th amendment of the Constitution of India and consequent amendments thereto in Orissa Sales Tax Act (OST Act), the Sales Tax Officer, Bhubaneswar-II Circle, Bhubaneswar sent notices to assess the petitioner as an unregistered dealer under Section 12 (5) of the OST Act, inter alia, contending that the petitioner's activities can be called 'works contract'. Pursuant to said notice, the petitioner gave its reply and appeared before the Sales Tax Officer and produced the books of account and documents including Receipts, Purchase Memos, Vouchers, Ledger and thereby denied its liability under the OST Act. The petitioner also submitted objection petitions on various dates i.e. 28.12.1985, 10.1.1986, 20.2.1986 and 29.2.1988 contending, inter alia, that the petitioner has no sales tax liability under OST Act and the notices, which were issued, are without jurisdiction.</p><p style="text-align: justify;">5. Ignoring the said objections of the petitioner, the Sales Tax Officer, Bhubaneswar-II Circle, Bhubaneswar assessed the petitioner as an unregistered dealer, inter alia, holding that the petitioner is liable to pay sales tax as petitioner has been alleged to carry activities of 'works contract'. Therefore, orders of assessment being dated 29.2.1988 for the years 1984-85 (9/84 to 3/85), 1985-86 and 1986- 87 under Section 12(5) of OST Act and under Rule 5 of the Orissa Additional Sales Tax Rules, 1975 were passed and a tax of Rs. 20,765.00 and penalty of Rs. 5,000.00 totalling to Rs. 25,765.00 was imposed on the petitioner. The petitioner then filed the First Appeal before the learned Assistant Commissioner of Sales Tax. The First Appellate Authority by an order dated 27.9.1991 confirmed the levy of tax under the OST Act, but reduced the penalty to Rs. 1250.00. Thereupon, the petitioner filed the Second Appeal before the Orissa Sales Tax Tribunal, Cuttack. The said Tribunal heard the Second Appeal and in course of hearing, the petitioner raised various contentions. Ultimately, the Tribunal upheld the levy of tax but deleted the penalty.</p><p style="text-align: justify;">6. Thereafter the petitioner came up with a reference application under Section 24(1) of the Orissa Sales Tax Act framing certain questions for being referred to the Hon'ble High Court. The said prayer of the petitioner was rejected by the Tribunal. Then the petitioner moved Hon'ble High Court under Section 24(2)(b) of the Orissa Sales Tax Act, 1947 whereupon the High Court directed the Tribunal to state to case and refer the questions under Section 24(3) of the OST Act for a decision of the High Court.</p><p style="text-align: justify;">7. Accordingly, the Tribunal stated the case and referred the aforesaid questions for a decision of the High Court.</p><p style="text-align: justify;">8. Learned Counsel for the petitioner before the High Court submitted that in the transaction in question, there is no contract of sale between the petitioner and the client. It is only a contract of service and the photographs, which the petitioner produced by supplying the same has no commercial value and are not marketable. So, there is no question of a works contract. It is the consistent stand of the petitioner that the present photographs which are produced by the petitioner have no utility or value to any other person than the customer. By developing such photographs, the petitioner only renders service to his customers. The customer pays for the service rendered by the petitioner. It is the contention of the petitioner that his activity is similar to that of consulting firm preparing plan and sketches pursuant to client's specification or professional giving opinion on papers. All those activities are done to serve the client. Therefore, this does not come within the purview of the definition of 'goods', 'sale', 'dealer' or 'works contract'. It is the petitioner's case that he purchased the goods, namely, papers on payment of sales tax. Further levy of tax on the personal service rendered to the client of the petitioner will amount to double taxation. It is also the contention of the petitioner that the paper which is used in the photography are incidental and insignificant.</p><p style="text-align: justify;">9. In support of its contention, learned Counsel for the petitioner has relied on several judgments. First reliance was place on the judgment of the Supreme Court in the case of Sales Tax Officer v. B.C. Kame reported in 39 STC 237(SC). At page 241 of the report, learned Judges of the Supreme Court held that a photographer takes the photograph and develops the negatives and does other photographic work and thereafter supplies the prints to his client. By doing so he cannot be said to enter into a contract for sale of goods. On the other hand, the contract is for use of skill and labour by the photographer to bring about the desired result. Learned Judges held that the job of a photographer is a contract for work and labour and it is not a contract of sale.</p><p style="text-align: justify;">10. Reliance was also placed on a judgment of this High Court in the case of Photo Emporium v. Addl. District Magistrate reported in 77 STC 199 in which this High Court followed the ratio of the judgment of the Supreme Court in the case of B.C. Kame. In that case, the stand of the Revenue was disapproved by the Orissa High Court.</p><p style="text-align: justify;">11. Similar view was taken in 110 STC 145 in the case of Foto Colour Labs Pvt. Ltd. v. Commercial Taxes Officer where the Tribunal held that the transfer of paper in the photograph is purely incidental and payment is only taken to give positive prints and not to get the photo papers. Therefore, the contract in between the petitioner and his client is not a contract of sale, and neither directly or indirectly works contract is involved in the supply of photo papers. Similar view was taken by the West Bengal Taxation Tribunal in the case of Studio Kamalalaya v. Commercial Tax Officer reported in 89 STC 307.</p><p style="text-align: justify;">12. In the case of Bavens v. Onion of India report in 97 STC 161, learned Judges held that when a photographer takes a photograph of his customer, he develops the negative and supplies positive prints in the desired size to the customer. In doing so the photographer uses his own camera and his own film. The negative belongs to the photographer and not to the customer. No basic goods are provided by the customer which are subjected to processing by the photographer so as to make the contract a works contract. There is no accretion to goods or property or the nucleus of a property which belongs to the customer. It is the skill of the photographer which is most important to get the desired result.</p><p style="text-align: justify;">13. Hon'ble Karnataka High Court followed the same principle in the case of Keshoram Surlndranath Photo-mag Pvt. Ltd. v. Assistant Commissioner of Commercial Taxes reported in 121 STC 175. In that judgment, learned Judges of the Karnataka High Court relied on the judgment of the Supreme Court in B.C. Kame's case and came to the conclusion that in the job of the photographer in supplying positive prints to his customer, no works contract is involved and photographs are not marketable or saleable commodity and as such no tax can be levied on it.</p><p style="text-align: justify;">14. Against the said judgment of the Karnataka High Court, the State of Karnataka High Court filed a S.L.P. before the Hon'ble Supreme Court bearing SLP Nos. 6136-6163 of 2000 and the Hon'ble Supreme Court dismissed the SLP on 20th April, 2000.</p><p style="text-align: justify;">15. In the case of Rainbow Colour Lab v. State of M.P. learned Judges of the Hon'ble Supreme Court reiterated its judgment in B.C. Kame's case and came to the following conclusion:</p><p style="text-align: justify;">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.</p><p style="text-align: justify;">Hon'ble Supreme Court in Bharat Sanchar Nigam Ltd. v. Union of India reported in 145 STC 91 again reiterated the principle in B.C. Kame's case and held that the work done by the photographer is only in the nature of a service contract not involving any sale of goods and held that the stand taken by the State cannot be sustained.</p><p style="text-align: justify;">16. Learned Counsel for the petitioner submitted that the photographs taken by the petitioner are not goods which can be sold and is not a marketable commodity like any other goods. When the copies of photographs are made out, they have no utility or value to any other person than the customer. It is already admitted that the papers utilized for photographs are tax paid goods. Therefore, it is contended by the learned Counsel for the petitioner that the work of photography does not come within the purview of works contract as defined in Section 2(jj) of the Orissa Sales Tax Act.</p><p style="text-align: justify;">17. Learned Counsel for the Revenue in this case virtually did not contest the submission made by the learned Counsel for the petitioner and in support of his contention, learned Counsel for the Revenue relied on a decision of the Supreme Court in the case of Imagic Creative Pvt. Ltd. v. Commissioner of Commercial Taxes and Ors. reported in (2008) 10 RC 236. In that judgment, learned Judges held that since the contract in question is a service contract, it is difficult to hold that in a case of this nature, sales tax would be payable on the value of the entire contract irrespective of the element of service provided.</p><p style="text-align: justify;">For the reasons discussed above, we answer the first question in the negative and the second question, in the affirmative. We thus answer both the questions in favour of the assessee and against the Revenue.</p><p style="text-align: justify;">The three revision applications are thus disposed of.</p><p style="text-align: justify;">No costs.</p><p style="text-align: justify;">B.N. Mahapatra, J.</p><p style="text-align: justify;">18. I agree.<p style="text-align: justify;"></p><p style="text-align: justify;">',
			'observations' => null,
			'overruledby' => null,
			'prhistory' => '',
			'pubs' => '106(2008)CLT317; 2008(I)OLR953; (2008)17VST289(Orissa)',
			'ratiodecidendi' => '',
			'respondent' => 'Commissioner of Sales Tax',
			'sub' => 'Sales Tax/VAT',
			'link' => null,
			'circuit' => null
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$title_for_layout = 'Studio Sujata Vs Commissioner of Sales Tax - Citation 531271 - Court Judgment | '
$desc = array(
	'Judgement' => array(
		'id' => '531271',
		'acts' => '',
		'appealno' => '',
		'appellant' => 'Studio Sujata',
		'authreffered' => '',
		'casename' => 'Studio Sujata Vs. Commissioner of Sales Tax',
		'casenote' => 'Sales Tax - Assessment - Contract of Sale - Section 12 (5) of Orissa Sales Tax 1947 - Petitioner carries on business of processing and developing photography - Revenue assessed petitioner under Section 12(5) of Act on ground that activities of petitioner can be called works contract - Petitioner approached to Assistant of Sales Tax on ground that there is no contract of sale between the petitioner and the client, it is only service - Dismissed and affirmed by Tribunal - Hence present petition - Whether Tribunal is right to held that tax is exigible for photographs as execution of works contract or not? - Held, as per precedent laid down by Supreme Court in case of Sales Tax Officer v. B.C. Kame that photographer takes photograph and develops negatives and does other photographic work and thereafter supplies prints to his client - By doing so he cannot be said to enter into contract for sale of goods - Therefore, job of photographer is contract for work and labour and it is not contract of sale - Revenue committed mistake in assessing petitioner under Section 12(5) of Act on basis of contract of sale - Petition disposed of accordingly  - STATE FINANCIAL CORPORATIONS ACT, 1951 [63/1951]. Section 29; [P.K. Tripathy, A.K. Parichha & N.Prusty, JJ] Discharge of loan  Orissa Forest Act (14 of 1972), Section 56  Confiscation of vehicle - Held, The Authorities under Section 56 of the Orissa Forest Act, 1972 are not obliged to release the vehicle from the confiscation proceeding or to pay the sale proceeds of the vehicle after the order of confiscation in favour of Orissa State Financial Corporation when such vehicles were purchased on being financed by the Orissa State Financial Corporation and the loan had not been liquidated by the date of the seizure/confiscation of the vehicle. Concept of first charge or second charge has no applicability when the vehicle is not otherwise disposed of to determine the liabilities of the loanee. On the other hand the vehicle having been found indulged in forest offences was made subject matter of a confiscation proceedings, and therefore, the procedure followed for confiscation of the vehicle and for its sale is punitive in nature and not with a view to give benefit to anybody including the Department which initiated the confiscation proceeding. Apart from that, the claim of the Orissa State Financial Corporation as against its loanee (who had taken the vehicle on hire- purchase agreement) brings the loanee and the sureties within the default clause under the State Financial Corporation Act, 1951 or the heirs and successors of such persons. Procedure is provided in the Act, 1951 and the Rules thereof about the manner in which such loan is to be recovered, and in that context only the vehicle under the hire-purchase agreement is placed as the first charge. If such property is not available for any reason, then the loan is not automatically waived or the loanee and his sureties are not automatically redeemed of the liabilities to repay. The Financial Corporation is concerned with repayment of loan either from the property or persons offered as surety. Thus, a vehicle, which is subject matter of confiscation proceeding under the Act, 1872, being not available to the Orissa State Financial Corporation for adjustment of the unpaid loan, that does not at all bring out an anomalous situation so as to defeat the right of the Orissa State Financial Corporation. Agreement between the Orissa State Financial Corporation and the loanee is a pure and simple contract governed by the provisions of the Contract Act, 1872 read with the provisions in the Act, 1951 and its Rules. On the other hand, a confiscation proceeding under the Act, 1972 is punitive in nature for commission of a forest offence. Thus, by virtue of the provision in Section 56 read with Section 64 (2) of the Act, 1972, the action taken for confiscation of the vehicle cannot be extended to grant protection of the loan advanced by Orissa State Financial Corporation. By doing that it amounts to grant premium to the pick-pockets in as much as, by making payment of the confiscation amount in favour of the Orissa State Financial Corporation the loan burden of the accused of the forest offence is reduced to the extent of the sale proceeds of the vehicle. In other words, on payment of the sale proceeds of the confiscation proceeding to the Orissa State Financial Corporation towards discharge of the loan account of the accused of a forest offence, it would lead to a system to reward him by repayment of his loan. Then it does not become a penalty nor the action become punitive, but it remains as a reward to the accused of forest offence. Such a concept is totally not conceivable from any provision in the Act, 1972 or the Act, 1951. [AIR 2002 Orissa 130 Overruled]. -- STATE FINANCIAL CORPORATIONS ACT, 1951. 
Section 29; Discharge of loan  Orissa Forest Act (14 of 1972), Section 56  Confiscation of vehicle - Held, The Authorities under Section 56 of the Orissa Forest Act, 1972 are not obliged to release the vehicle from the confiscation proceeding or to pay the sale proceeds of the vehicle after the order of confiscation in favour of Orissa State Financial Corporation when such vehicles were purchased on being financed by the Orissa State Financial Corporation and the loan had not been liquidated by the date of the seizure/confiscation of the vehicle. Concept of first charge or second charge has no applicability when the vehicle is not otherwise disposed of to determine the liabilities of the loanee. On the other hand the vehicle having been found indulged in forest offences was made subject matter of a confiscation proceedings, and therefore, the procedure followed for confiscation of the vehicle and for its sale is punitive in nature and not with a view to give benefit to anybody including the Department which initiated the confiscation proceeding. Apart from that, the claim of the Orissa State Financial Corporation as against its loanee (who had taken the vehicle on hire- purchase agreement) brings the loanee and the sureties within the default clause under the State Financial Corporation Act, 1951 or the heirs and successors of such persons. Procedure is provided in the Act, 1951 and the Rules thereof about the manner in which such loan is to be recovered, and in that context only the vehicle under the hire-purchase agreement is placed as the first charge. If such property is not available for any reason, then the loan is not automatically waived or the loanee and his sureties are not automatically redeemed of the liabilities to repay. The Financial Corporation is concerned with repayment of loan either from the property or persons offered as surety. Thus, a vehicle, which is subject matter of confiscation proceeding under the Act, 1872, being not available to the Orissa State Financial Corporation for adjustment of the unpaid loan, that does not at all bring out an anomalous situation so as to defeat the right of the Orissa State Financial Corporation. Agreement between the Orissa State Financial Corporation and the loanee is a pure and simple contract governed by the provisions of the Contract Act, 1872 read with the provisions in the Act, 1951 and its Rules. On the other hand, a confiscation proceeding under the Act, 1972 is punitive in nature for commission of a forest offence. Thus, by virtue of the provision in Section 56 read with Section 64 (2) of the Act, 1972, the action taken for confiscation of the vehicle cannot be extended to grant protection of the loan advanced by Orissa State Financial Corporation. By doing that it amounts to grant premium to the pick-pockets in as much as, by making payment of the confiscation amount in favour of the Orissa State Financial Corporation the loan burden of the accused of the forest offence is reduced to the extent of the sale proceeds of the vehicle. In other words, on payment of the sale proceeds of the confiscation proceeding to the Orissa State Financial Corporation towards discharge of the loan account of the accused of a forest offence, it would lead to a system to reward him by repayment of his loan. Then it does not become a penalty nor the action become punitive, but it remains as a reward to the accused of forest offence. Such a concept is totally not conceivable from any provision in the Act, 1972 or the Act, 1951. [AIR 2002 Orissa 130 Overruled].  -  In that case, the stand of the Revenue was disapproved by the Orissa High Court. 16. Learned Counsel for the petitioner submitted that the photographs taken by the petitioner are not goods which can be sold and is not a marketable commodity like any other goods.',
		'caseanalysis' => null,
		'casesref' => 'Imagic Creative Pvt. Ltd. v. Commissioner of Commercial Taxes and Ors.;',
		'citingcases' => '',
		'counselplain' => '',
		'counseldef' => '',
		'court' => 'Orissa',
		'court_type' => 'HC',
		'decidedon' => '2008-04-02',
		'deposition' => '',
		'favorof' => null,
		'findings' => null,
		'judge' => ' A.K. Ganguly, C.J. and; B.N. Mahapatra, J.',
		'judgement' => '<p>A.K. Ganguly, C.J.</p><p>1. Initially three S.J.Cs. being S.J.C. Nos. 10 of 1997, 8 of 1997 and 9 of 1997 were filed and subsequently renumbered as STREV Nos. 212, 214 and 216 of 2007 respectively. In view of the common questions of facts and law, all the three Revision Applications are heard and disposed of together.</p><p>2. The following questions of law arising out of the order passed by the Orissa Sales Tax Tribunal on 8.12.1993 in Second Appeal Nos. 3345 to 3350 of 1991-92 have been referred to this Hon'ble High Court in terms of the order of this Hon'ble Court dated 24.2.1997. The questions are:</p><p>(i) Whether on the facts and in the circumstances of the case, the Tribunal is right to held that tax is exigible for photographs as execution of works contract ?</p><p>(ii) Whether on the facts and in the circumstances of the case, the conclusion of the Tribunal is perverse due to non-consideration and mis-consideration of facts and law and, therefore, it is liable to be set aside for re-hearing ?</p><p>3. The materials facts out of which those questions arise are that the petitioner carries on the business of processing and developing photography. In the usual course of business, the petitioner takes photographs of persons or of family and then develops the negative by employing his skill and labour and then supplies the photographs to the clients. These photographs which are prepared by the petitioner are not commercial items because they are neither purchased nor sold. However, to develop these photographs employment of skill and labour is essential. It may be mentioned that petitioner does not carry on any sale of photographs of national leaders, God and Goddess.</p><p>4. After the passing of 46th amendment of the Constitution of India and consequent amendments thereto in Orissa Sales Tax Act (OST Act), the Sales Tax Officer, Bhubaneswar-II Circle, Bhubaneswar sent notices to assess the petitioner as an unregistered dealer under Section 12 (5) of the OST Act, inter alia, contending that the petitioner's activities can be called 'works contract'. Pursuant to said notice, the petitioner gave its reply and appeared before the Sales Tax Officer and produced the books of account and documents including Receipts, Purchase Memos, Vouchers, Ledger and thereby denied its liability under the OST Act. The petitioner also submitted objection petitions on various dates i.e. 28.12.1985, 10.1.1986, 20.2.1986 and 29.2.1988 contending, inter alia, that the petitioner has no sales tax liability under OST Act and the notices, which were issued, are without jurisdiction.</p><p>5. Ignoring the said objections of the petitioner, the Sales Tax Officer, Bhubaneswar-II Circle, Bhubaneswar assessed the petitioner as an unregistered dealer, inter alia, holding that the petitioner is liable to pay sales tax as petitioner has been alleged to carry activities of 'works contract'. Therefore, orders of assessment being dated 29.2.1988 for the years 1984-85 (9/84 to 3/85), 1985-86 and 1986- 87 under Section 12(5) of OST Act and under Rule 5 of the Orissa Additional Sales Tax Rules, 1975 were passed and a tax of Rs. 20,765.00 and penalty of Rs. 5,000.00 totalling to Rs. 25,765.00 was imposed on the petitioner. The petitioner then filed the First Appeal before the learned Assistant Commissioner of Sales Tax. The First Appellate Authority by an order dated 27.9.1991 confirmed the levy of tax under the OST Act, but reduced the penalty to Rs. 1250.00. Thereupon, the petitioner filed the Second Appeal before the Orissa Sales Tax Tribunal, Cuttack. The said Tribunal heard the Second Appeal and in course of hearing, the petitioner raised various contentions. Ultimately, the Tribunal upheld the levy of tax but deleted the penalty.</p><p>6. Thereafter the petitioner came up with a reference application under Section 24(1) of the Orissa Sales Tax Act framing certain questions for being referred to the Hon'ble High Court. The said prayer of the petitioner was rejected by the Tribunal. Then the petitioner moved Hon'ble High Court under Section 24(2)(b) of the Orissa Sales Tax Act, 1947 whereupon the High Court directed the Tribunal to state to case and refer the questions under Section 24(3) of the OST Act for a decision of the High Court.</p><p>7. Accordingly, the Tribunal stated the case and referred the aforesaid questions for a decision of the High Court.</p><p>8. Learned Counsel for the petitioner before the High Court submitted that in the transaction in question, there is no contract of sale between the petitioner and the client. It is only a contract of service and the photographs, which the petitioner produced by supplying the same has no commercial value and are not marketable. So, there is no question of a works contract. It is the consistent stand of the petitioner that the present photographs which are produced by the petitioner have no utility or value to any other person than the customer. By developing such photographs, the petitioner only renders service to his customers. The customer pays for the service rendered by the petitioner. It is the contention of the petitioner that his activity is similar to that of consulting firm preparing plan and sketches pursuant to client's specification or professional giving opinion on papers. All those activities are done to serve the client. Therefore, this does not come within the purview of the definition of 'goods', 'sale', 'dealer' or 'works contract'. It is the petitioner's case that he purchased the goods, namely, papers on payment of sales tax. Further levy of tax on the personal service rendered to the client of the petitioner will amount to double taxation. It is also the contention of the petitioner that the paper which is used in the photography are incidental and insignificant.</p><p>9. In support of its contention, learned Counsel for the petitioner has relied on several judgments. First reliance was place on the judgment of the Supreme Court in the case of Sales Tax Officer v. B.C. Kame reported in 39 STC 237(SC). At page 241 of the report, learned Judges of the Supreme Court held that a photographer takes the photograph and develops the negatives and does other photographic work and thereafter supplies the prints to his client. By doing so he cannot be said to enter into a contract for sale of goods. On the other hand, the contract is for use of skill and labour by the photographer to bring about the desired result. Learned Judges held that the job of a photographer is a contract for work and labour and it is not a contract of sale.</p><p>10. Reliance was also placed on a judgment of this High Court in the case of Photo Emporium v. Addl. District Magistrate reported in 77 STC 199 in which this High Court followed the ratio of the judgment of the Supreme Court in the case of B.C. Kame. In that case, the stand of the Revenue was disapproved by the Orissa High Court.</p><p>11. Similar view was taken in 110 STC 145 in the case of Foto Colour Labs Pvt. Ltd. v. Commercial Taxes Officer where the Tribunal held that the transfer of paper in the photograph is purely incidental and payment is only taken to give positive prints and not to get the photo papers. Therefore, the contract in between the petitioner and his client is not a contract of sale, and neither directly or indirectly works contract is involved in the supply of photo papers. Similar view was taken by the West Bengal Taxation Tribunal in the case of Studio Kamalalaya v. Commercial Tax Officer reported in 89 STC 307.</p><p>12. In the case of Bavens v. Onion of India report in 97 STC 161, learned Judges held that when a photographer takes a photograph of his customer, he develops the negative and supplies positive prints in the desired size to the customer. In doing so the photographer uses his own camera and his own film. The negative belongs to the photographer and not to the customer. No basic goods are provided by the customer which are subjected to processing by the photographer so as to make the contract a works contract. There is no accretion to goods or property or the nucleus of a property which belongs to the customer. It is the skill of the photographer which is most important to get the desired result.</p><p>13. Hon'ble Karnataka High Court followed the same principle in the case of Keshoram Surlndranath Photo-mag Pvt. Ltd. v. Assistant Commissioner of Commercial Taxes reported in 121 STC 175. In that judgment, learned Judges of the Karnataka High Court relied on the judgment of the Supreme Court in B.C. Kame's case and came to the conclusion that in the job of the photographer in supplying positive prints to his customer, no works contract is involved and photographs are not marketable or saleable commodity and as such no tax can be levied on it.</p><p>14. Against the said judgment of the Karnataka High Court, the State of Karnataka High Court filed a S.L.P. before the Hon'ble Supreme Court bearing SLP Nos. 6136-6163 of 2000 and the Hon'ble Supreme Court dismissed the SLP on 20th April, 2000.</p><p>15. In the case of Rainbow Colour Lab v. State of M.P. learned Judges of the Hon'ble Supreme Court reiterated its judgment in B.C. Kame's case and came to the following conclusion:</p><p>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.</p><p>Hon'ble Supreme Court in Bharat Sanchar Nigam Ltd. v. Union of India reported in 145 STC 91 again reiterated the principle in B.C. Kame's case and held that the work done by the photographer is only in the nature of a service contract not involving any sale of goods and held that the stand taken by the State cannot be sustained.</p><p>16. Learned Counsel for the petitioner submitted that the photographs taken by the petitioner are not goods which can be sold and is not a marketable commodity like any other goods. When the copies of photographs are made out, they have no utility or value to any other person than the customer. It is already admitted that the papers utilized for photographs are tax paid goods. Therefore, it is contended by the learned Counsel for the petitioner that the work of photography does not come within the purview of works contract as defined in Section 2(jj) of the Orissa Sales Tax Act.</p><p>17. Learned Counsel for the Revenue in this case virtually did not contest the submission made by the learned Counsel for the petitioner and in support of his contention, learned Counsel for the Revenue relied on a decision of the Supreme Court in the case of Imagic Creative Pvt. Ltd. v. Commissioner of Commercial Taxes and Ors. reported in (2008) 10 RC 236. In that judgment, learned Judges held that since the contract in question is a service contract, it is difficult to hold that in a case of this nature, sales tax would be payable on the value of the entire contract irrespective of the element of service provided.</p><p>For the reasons discussed above, we answer the first question in the negative and the second question, in the affirmative. We thus answer both the questions in favour of the assessee and against the Revenue.</p><p>The three revision applications are thus disposed of.</p><p>No costs.</p><p>B.N. Mahapatra, J.</p><p>18. I agree.<p></p><p>',
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	'title_for_layout' => 'Studio Sujata Vs Commissioner of Sales Tax - Citation 531271 - Court Judgment | ',
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			'id' => '531271',
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			'casenote' => 'Sales Tax - Assessment - Contract of Sale - Section 12 (5) of Orissa Sales Tax 1947 - Petitioner carries on business of processing and developing photography - Revenue assessed petitioner under Section 12(5) of Act on ground that activities of petitioner can be called works contract - Petitioner approached to Assistant of Sales Tax on ground that there is no contract of sale between the petitioner and the client, it is only service - Dismissed and affirmed by Tribunal - Hence present petition - Whether Tribunal is right to held that tax is exigible for photographs as execution of works contract or not? - Held, as per precedent laid down by Supreme Court in case of Sales Tax Officer v. B.C. Kame that photographer takes photograph and develops negatives and does other photographic work and thereafter supplies prints to his client - By doing so he cannot be said to enter into contract for sale of goods - Therefore, job of photographer is contract for work and labour and it is not contract of sale - Revenue committed mistake in assessing petitioner under Section 12(5) of Act on basis of contract of sale - Petition disposed of accordingly  - STATE FINANCIAL CORPORATIONS ACT, 1951 [63/1951]. Section 29; [P.K. Tripathy, A.K. Parichha & N.Prusty, JJ] Discharge of loan  Orissa Forest Act (14 of 1972), Section 56  Confiscation of vehicle - Held, The Authorities under Section 56 of the Orissa Forest Act, 1972 are not obliged to release the vehicle from the confiscation proceeding or to pay the sale proceeds of the vehicle after the order of confiscation in favour of Orissa State Financial Corporation when such vehicles were purchased on being financed by the Orissa State Financial Corporation and the loan had not been liquidated by the date of the seizure/confiscation of the vehicle. Concept of first charge or second charge has no applicability when the vehicle is not otherwise disposed of to determine the liabilities of the loanee. On the other hand the vehicle having been found indulged in forest offences was made subject matter of a confiscation proceedings, and therefore, the procedure followed for confiscation of the vehicle and for its sale is punitive in nature and not with a view to give benefit to anybody including the Department which initiated the confiscation proceeding. Apart from that, the claim of the Orissa State Financial Corporation as against its loanee (who had taken the vehicle on hire- purchase agreement) brings the loanee and the sureties within the default clause under the State Financial Corporation Act, 1951 or the heirs and successors of such persons. Procedure is provided in the Act, 1951 and the Rules thereof about the manner in which such loan is to be recovered, and in that context only the vehicle under the hire-purchase agreement is placed as the first charge. If such property is not available for any reason, then the loan is not automatically waived or the loanee and his sureties are not automatically redeemed of the liabilities to repay. The Financial Corporation is concerned with repayment of loan either from the property or persons offered as surety. Thus, a vehicle, which is subject matter of confiscation proceeding under the Act, 1872, being not available to the Orissa State Financial Corporation for adjustment of the unpaid loan, that does not at all bring out an anomalous situation so as to defeat the right of the Orissa State Financial Corporation. Agreement between the Orissa State Financial Corporation and the loanee is a pure and simple contract governed by the provisions of the Contract Act, 1872 read with the provisions in the Act, 1951 and its Rules. On the other hand, a confiscation proceeding under the Act, 1972 is punitive in nature for commission of a forest offence. Thus, by virtue of the provision in Section 56 read with Section 64 (2) of the Act, 1972, the action taken for confiscation of the vehicle cannot be extended to grant protection of the loan advanced by Orissa State Financial Corporation. By doing that it amounts to grant premium to the pick-pockets in as much as, by making payment of the confiscation amount in favour of the Orissa State Financial Corporation the loan burden of the accused of the forest offence is reduced to the extent of the sale proceeds of the vehicle. In other words, on payment of the sale proceeds of the confiscation proceeding to the Orissa State Financial Corporation towards discharge of the loan account of the accused of a forest offence, it would lead to a system to reward him by repayment of his loan. Then it does not become a penalty nor the action become punitive, but it remains as a reward to the accused of forest offence. Such a concept is totally not conceivable from any provision in the Act, 1972 or the Act, 1951. [AIR 2002 Orissa 130 Overruled]. -- STATE FINANCIAL CORPORATIONS ACT, 1951. 
Section 29; Discharge of loan  Orissa Forest Act (14 of 1972), Section 56  Confiscation of vehicle - Held, The Authorities under Section 56 of the Orissa Forest Act, 1972 are not obliged to release the vehicle from the confiscation proceeding or to pay the sale proceeds of the vehicle after the order of confiscation in favour of Orissa State Financial Corporation when such vehicles were purchased on being financed by the Orissa State Financial Corporation and the loan had not been liquidated by the date of the seizure/confiscation of the vehicle. Concept of first charge or second charge has no applicability when the vehicle is not otherwise disposed of to determine the liabilities of the loanee. On the other hand the vehicle having been found indulged in forest offences was made subject matter of a confiscation proceedings, and therefore, the procedure followed for confiscation of the vehicle and for its sale is punitive in nature and not with a view to give benefit to anybody including the Department which initiated the confiscation proceeding. Apart from that, the claim of the Orissa State Financial Corporation as against its loanee (who had taken the vehicle on hire- purchase agreement) brings the loanee and the sureties within the default clause under the State Financial Corporation Act, 1951 or the heirs and successors of such persons. Procedure is provided in the Act, 1951 and the Rules thereof about the manner in which such loan is to be recovered, and in that context only the vehicle under the hire-purchase agreement is placed as the first charge. If such property is not available for any reason, then the loan is not automatically waived or the loanee and his sureties are not automatically redeemed of the liabilities to repay. The Financial Corporation is concerned with repayment of loan either from the property or persons offered as surety. Thus, a vehicle, which is subject matter of confiscation proceeding under the Act, 1872, being not available to the Orissa State Financial Corporation for adjustment of the unpaid loan, that does not at all bring out an anomalous situation so as to defeat the right of the Orissa State Financial Corporation. Agreement between the Orissa State Financial Corporation and the loanee is a pure and simple contract governed by the provisions of the Contract Act, 1872 read with the provisions in the Act, 1951 and its Rules. On the other hand, a confiscation proceeding under the Act, 1972 is punitive in nature for commission of a forest offence. Thus, by virtue of the provision in Section 56 read with Section 64 (2) of the Act, 1972, the action taken for confiscation of the vehicle cannot be extended to grant protection of the loan advanced by Orissa State Financial Corporation. By doing that it amounts to grant premium to the pick-pockets in as much as, by making payment of the confiscation amount in favour of the Orissa State Financial Corporation the loan burden of the accused of the forest offence is reduced to the extent of the sale proceeds of the vehicle. In other words, on payment of the sale proceeds of the confiscation proceeding to the Orissa State Financial Corporation towards discharge of the loan account of the accused of a forest offence, it would lead to a system to reward him by repayment of his loan. Then it does not become a penalty nor the action become punitive, but it remains as a reward to the accused of forest offence. Such a concept is totally not conceivable from any provision in the Act, 1972 or the Act, 1951. [AIR 2002 Orissa 130 Overruled].  -  In that case, the stand of the Revenue was disapproved by the Orissa High Court. 16. Learned Counsel for the petitioner submitted that the photographs taken by the petitioner are not goods which can be sold and is not a marketable commodity like any other goods.',
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			'judgement' => '<p style="text-align: justify;">A.K. Ganguly, C.J.</p><p style="text-align: justify;">1. Initially three S.J.Cs. being S.J.C. Nos. 10 of 1997, 8 of 1997 and 9 of 1997 were filed and subsequently renumbered as STREV Nos. 212, 214 and 216 of 2007 respectively. In view of the common questions of facts and law, all the three Revision Applications are heard and disposed of together.</p><p style="text-align: justify;">2. The following questions of law arising out of the order passed by the Orissa Sales Tax Tribunal on 8.12.1993 in Second Appeal Nos. 3345 to 3350 of 1991-92 have been referred to this Hon'ble High Court in terms of the order of this Hon'ble Court dated 24.2.1997. The questions are:</p><p style="text-align: justify;">(i) Whether on the facts and in the circumstances of the case, the Tribunal is right to held that tax is exigible for photographs as execution of works contract ?</p><p style="text-align: justify;">(ii) Whether on the facts and in the circumstances of the case, the conclusion of the Tribunal is perverse due to non-consideration and mis-consideration of facts and law and, therefore, it is liable to be set aside for re-hearing ?</p><p style="text-align: justify;">3. The materials facts out of which those questions arise are that the petitioner carries on the business of processing and developing photography. In the usual course of business, the petitioner takes photographs of persons or of family and then develops the negative by employing his skill and labour and then supplies the photographs to the clients. These photographs which are prepared by the petitioner are not commercial items because they are neither purchased nor sold. However, to develop these photographs employment of skill and labour is essential. It may be mentioned that petitioner does not carry on any sale of photographs of national leaders, God and Goddess.</p><p style="text-align: justify;">4. After the passing of 46th amendment of the Constitution of India and consequent amendments thereto in Orissa Sales Tax Act (OST Act), the Sales Tax Officer, Bhubaneswar-II Circle, Bhubaneswar sent notices to assess the petitioner as an unregistered dealer under Section 12 (5) of the OST Act, inter alia, contending that the petitioner's activities can be called 'works contract'. Pursuant to said notice, the petitioner gave its reply and appeared before the Sales Tax Officer and produced the books of account and documents including Receipts, Purchase Memos, Vouchers, Ledger and thereby denied its liability under the OST Act. The petitioner also submitted objection petitions on various dates i.e. 28.12.1985, 10.1.1986, 20.2.1986 and 29.2.1988 contending, inter alia, that the petitioner has no sales tax liability under OST Act and the notices, which were issued, are without jurisdiction.</p><p style="text-align: justify;">5. Ignoring the said objections of the petitioner, the Sales Tax Officer, Bhubaneswar-II Circle, Bhubaneswar assessed the petitioner as an unregistered dealer, inter alia, holding that the petitioner is liable to pay sales tax as petitioner has been alleged to carry activities of 'works contract'. Therefore, orders of assessment being dated 29.2.1988 for the years 1984-85 (9/84 to 3/85), 1985-86 and 1986- 87 under Section 12(5) of OST Act and under Rule 5 of the Orissa Additional Sales Tax Rules, 1975 were passed and a tax of Rs. 20,765.00 and penalty of Rs. 5,000.00 totalling to Rs. 25,765.00 was imposed on the petitioner. The petitioner then filed the First Appeal before the learned Assistant Commissioner of Sales Tax. The First Appellate Authority by an order dated 27.9.1991 confirmed the levy of tax under the OST Act, but reduced the penalty to Rs. 1250.00. Thereupon, the petitioner filed the Second Appeal before the Orissa Sales Tax Tribunal, Cuttack. The said Tribunal heard the Second Appeal and in course of hearing, the petitioner raised various contentions. Ultimately, the Tribunal upheld the levy of tax but deleted the penalty.</p><p style="text-align: justify;">6. Thereafter the petitioner came up with a reference application under Section 24(1) of the Orissa Sales Tax Act framing certain questions for being referred to the Hon'ble High Court. The said prayer of the petitioner was rejected by the Tribunal. Then the petitioner moved Hon'ble High Court under Section 24(2)(b) of the Orissa Sales Tax Act, 1947 whereupon the High Court directed the Tribunal to state to case and refer the questions under Section 24(3) of the OST Act for a decision of the High Court.</p><p style="text-align: justify;">7. Accordingly, the Tribunal stated the case and referred the aforesaid questions for a decision of the High Court.</p><p style="text-align: justify;">8. Learned Counsel for the petitioner before the High Court submitted that in the transaction in question, there is no contract of sale between the petitioner and the client. It is only a contract of service and the photographs, which the petitioner produced by supplying the same has no commercial value and are not marketable. So, there is no question of a works contract. It is the consistent stand of the petitioner that the present photographs which are produced by the petitioner have no utility or value to any other person than the customer. By developing such photographs, the petitioner only renders service to his customers. The customer pays for the service rendered by the petitioner. It is the contention of the petitioner that his activity is similar to that of consulting firm preparing plan and sketches pursuant to client's specification or professional giving opinion on papers. All those activities are done to serve the client. Therefore, this does not come within the purview of the definition of 'goods', 'sale', 'dealer' or 'works contract'. It is the petitioner's case that he purchased the goods, namely, papers on payment of sales tax. Further levy of tax on the personal service rendered to the client of the petitioner will amount to double taxation. It is also the contention of the petitioner that the paper which is used in the photography are incidental and insignificant.</p><p style="text-align: justify;">9. In support of its contention, learned Counsel for the petitioner has relied on several judgments. First reliance was place on the judgment of the Supreme Court in the case of Sales Tax Officer v. B.C. Kame reported in 39 STC 237(SC). At page 241 of the report, learned Judges of the Supreme Court held that a photographer takes the photograph and develops the negatives and does other photographic work and thereafter supplies the prints to his client. By doing so he cannot be said to enter into a contract for sale of goods. On the other hand, the contract is for use of skill and labour by the photographer to bring about the desired result. Learned Judges held that the job of a photographer is a contract for work and labour and it is not a contract of sale.</p><p style="text-align: justify;">10. Reliance was also placed on a judgment of this High Court in the case of Photo Emporium v. Addl. District Magistrate reported in 77 STC 199 in which this High Court followed the ratio of the judgment of the Supreme Court in the case of B.C. Kame. In that case, the stand of the Revenue was disapproved by the Orissa High Court.</p><p style="text-align: justify;">11. Similar view was taken in 110 STC 145 in the case of Foto Colour Labs Pvt. Ltd. v. Commercial Taxes Officer where the Tribunal held that the transfer of paper in the photograph is purely incidental and payment is only taken to give positive prints and not to get the photo papers. Therefore, the contract in between the petitioner and his client is not a contract of sale, and neither directly or indirectly works contract is involved in the supply of photo papers. Similar view was taken by the West Bengal Taxation Tribunal in the case of Studio Kamalalaya v. Commercial Tax Officer reported in 89 STC 307.</p><p style="text-align: justify;">12. In the case of Bavens v. Onion of India report in 97 STC 161, learned Judges held that when a photographer takes a photograph of his customer, he develops the negative and supplies positive prints in the desired size to the customer. In doing so the photographer uses his own camera and his own film. The negative belongs to the photographer and not to the customer. No basic goods are provided by the customer which are subjected to processing by the photographer so as to make the contract a works contract. There is no accretion to goods or property or the nucleus of a property which belongs to the customer. It is the skill of the photographer which is most important to get the desired result.</p><p style="text-align: justify;">13. Hon'ble Karnataka High Court followed the same principle in the case of Keshoram Surlndranath Photo-mag Pvt. Ltd. v. Assistant Commissioner of Commercial Taxes reported in 121 STC 175. In that judgment, learned Judges of the Karnataka High Court relied on the judgment of the Supreme Court in B.C. Kame's case and came to the conclusion that in the job of the photographer in supplying positive prints to his customer, no works contract is involved and photographs are not marketable or saleable commodity and as such no tax can be levied on it.</p><p style="text-align: justify;">14. Against the said judgment of the Karnataka High Court, the State of Karnataka High Court filed a S.L.P. before the Hon'ble Supreme Court bearing SLP Nos. 6136-6163 of 2000 and the Hon'ble Supreme Court dismissed the SLP on 20th April, 2000.</p><p style="text-align: justify;">15. In the case of Rainbow Colour Lab v. State of M.P. learned Judges of the Hon'ble Supreme Court reiterated its judgment in B.C. Kame's case and came to the following conclusion:</p><p style="text-align: justify;">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.</p><p style="text-align: justify;">Hon'ble Supreme Court in Bharat Sanchar Nigam Ltd. v. Union of India reported in 145 STC 91 again reiterated the principle in B.C. Kame's case and held that the work done by the photographer is only in the nature of a service contract not involving any sale of goods and held that the stand taken by the State cannot be sustained.</p><p style="text-align: justify;">16. Learned Counsel for the petitioner submitted that the photographs taken by the petitioner are not goods which can be sold and is not a marketable commodity like any other goods. When the copies of photographs are made out, they have no utility or value to any other person than the customer. It is already admitted that the papers utilized for photographs are tax paid goods. Therefore, it is contended by the learned Counsel for the petitioner that the work of photography does not come within the purview of works contract as defined in Section 2(jj) of the Orissa Sales Tax Act.</p><p style="text-align: justify;">17. Learned Counsel for the Revenue in this case virtually did not contest the submission made by the learned Counsel for the petitioner and in support of his contention, learned Counsel for the Revenue relied on a decision of the Supreme Court in the case of Imagic Creative Pvt. Ltd. v. Commissioner of Commercial Taxes and Ors. reported in (2008) 10 RC 236. In that judgment, learned Judges held that since the contract in question is a service contract, it is difficult to hold that in a case of this nature, sales tax would be payable on the value of the entire contract irrespective of the element of service provided.</p><p style="text-align: justify;">For the reasons discussed above, we answer the first question in the negative and the second question, in the affirmative. We thus answer both the questions in favour of the assessee and against the Revenue.</p><p style="text-align: justify;">The three revision applications are thus disposed of.</p><p style="text-align: justify;">No costs.</p><p style="text-align: justify;">B.N. Mahapatra, J.</p><p style="text-align: justify;">18. I agree.<p style="text-align: justify;"></p><p style="text-align: justify;">',
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		'casenote' => 'Sales Tax - Assessment - Contract of Sale - Section 12 (5) of Orissa Sales Tax 1947 - Petitioner carries on business of processing and developing photography - Revenue assessed petitioner under Section 12(5) of Act on ground that activities of petitioner can be called works contract - Petitioner approached to Assistant of Sales Tax on ground that there is no contract of sale between the petitioner and the client, it is only service - Dismissed and affirmed by Tribunal - Hence present petition - Whether Tribunal is right to held that tax is exigible for photographs as execution of works contract or not? - Held, as per precedent laid down by Supreme Court in case of Sales Tax Officer v. B.C. Kame that photographer takes photograph and develops negatives and does other photographic work and thereafter supplies prints to his client - By doing so he cannot be said to enter into contract for sale of goods - Therefore, job of photographer is contract for work and labour and it is not contract of sale - Revenue committed mistake in assessing petitioner under Section 12(5) of Act on basis of contract of sale - Petition disposed of accordingly  - STATE FINANCIAL CORPORATIONS ACT, 1951 [63/1951]. Section 29; [P.K. Tripathy, A.K. Parichha & N.Prusty, JJ] Discharge of loan  Orissa Forest Act (14 of 1972), Section 56  Confiscation of vehicle - Held, The Authorities under Section 56 of the Orissa Forest Act, 1972 are not obliged to release the vehicle from the confiscation proceeding or to pay the sale proceeds of the vehicle after the order of confiscation in favour of Orissa State Financial Corporation when such vehicles were purchased on being financed by the Orissa State Financial Corporation and the loan had not been liquidated by the date of the seizure/confiscation of the vehicle. Concept of first charge or second charge has no applicability when the vehicle is not otherwise disposed of to determine the liabilities of the loanee. On the other hand the vehicle having been found indulged in forest offences was made subject matter of a confiscation proceedings, and therefore, the procedure followed for confiscation of the vehicle and for its sale is punitive in nature and not with a view to give benefit to anybody including the Department which initiated the confiscation proceeding. Apart from that, the claim of the Orissa State Financial Corporation as against its loanee (who had taken the vehicle on hire- purchase agreement) brings the loanee and the sureties within the default clause under the State Financial Corporation Act, 1951 or the heirs and successors of such persons. Procedure is provided in the Act, 1951 and the Rules thereof about the manner in which such loan is to be recovered, and in that context only the vehicle under the hire-purchase agreement is placed as the first charge. If such property is not available for any reason, then the loan is not automatically waived or the loanee and his sureties are not automatically redeemed of the liabilities to repay. The Financial Corporation is concerned with repayment of loan either from the property or persons offered as surety. Thus, a vehicle, which is subject matter of confiscation proceeding under the Act, 1872, being not available to the Orissa State Financial Corporation for adjustment of the unpaid loan, that does not at all bring out an anomalous situation so as to defeat the right of the Orissa State Financial Corporation. Agreement between the Orissa State Financial Corporation and the loanee is a pure and simple contract governed by the provisions of the Contract Act, 1872 read with the provisions in the Act, 1951 and its Rules. On the other hand, a confiscation proceeding under the Act, 1972 is punitive in nature for commission of a forest offence. Thus, by virtue of the provision in Section 56 read with Section 64 (2) of the Act, 1972, the action taken for confiscation of the vehicle cannot be extended to grant protection of the loan advanced by Orissa State Financial Corporation. By doing that it amounts to grant premium to the pick-pockets in as much as, by making payment of the confiscation amount in favour of the Orissa State Financial Corporation the loan burden of the accused of the forest offence is reduced to the extent of the sale proceeds of the vehicle. In other words, on payment of the sale proceeds of the confiscation proceeding to the Orissa State Financial Corporation towards discharge of the loan account of the accused of a forest offence, it would lead to a system to reward him by repayment of his loan. Then it does not become a penalty nor the action become punitive, but it remains as a reward to the accused of forest offence. Such a concept is totally not conceivable from any provision in the Act, 1972 or the Act, 1951. [AIR 2002 Orissa 130 Overruled]. -- STATE FINANCIAL CORPORATIONS ACT, 1951. 
Section 29; Discharge of loan  Orissa Forest Act (14 of 1972), Section 56  Confiscation of vehicle - Held, The Authorities under Section 56 of the Orissa Forest Act, 1972 are not obliged to release the vehicle from the confiscation proceeding or to pay the sale proceeds of the vehicle after the order of confiscation in favour of Orissa State Financial Corporation when such vehicles were purchased on being financed by the Orissa State Financial Corporation and the loan had not been liquidated by the date of the seizure/confiscation of the vehicle. Concept of first charge or second charge has no applicability when the vehicle is not otherwise disposed of to determine the liabilities of the loanee. On the other hand the vehicle having been found indulged in forest offences was made subject matter of a confiscation proceedings, and therefore, the procedure followed for confiscation of the vehicle and for its sale is punitive in nature and not with a view to give benefit to anybody including the Department which initiated the confiscation proceeding. Apart from that, the claim of the Orissa State Financial Corporation as against its loanee (who had taken the vehicle on hire- purchase agreement) brings the loanee and the sureties within the default clause under the State Financial Corporation Act, 1951 or the heirs and successors of such persons. Procedure is provided in the Act, 1951 and the Rules thereof about the manner in which such loan is to be recovered, and in that context only the vehicle under the hire-purchase agreement is placed as the first charge. If such property is not available for any reason, then the loan is not automatically waived or the loanee and his sureties are not automatically redeemed of the liabilities to repay. The Financial Corporation is concerned with repayment of loan either from the property or persons offered as surety. Thus, a vehicle, which is subject matter of confiscation proceeding under the Act, 1872, being not available to the Orissa State Financial Corporation for adjustment of the unpaid loan, that does not at all bring out an anomalous situation so as to defeat the right of the Orissa State Financial Corporation. Agreement between the Orissa State Financial Corporation and the loanee is a pure and simple contract governed by the provisions of the Contract Act, 1872 read with the provisions in the Act, 1951 and its Rules. On the other hand, a confiscation proceeding under the Act, 1972 is punitive in nature for commission of a forest offence. Thus, by virtue of the provision in Section 56 read with Section 64 (2) of the Act, 1972, the action taken for confiscation of the vehicle cannot be extended to grant protection of the loan advanced by Orissa State Financial Corporation. By doing that it amounts to grant premium to the pick-pockets in as much as, by making payment of the confiscation amount in favour of the Orissa State Financial Corporation the loan burden of the accused of the forest offence is reduced to the extent of the sale proceeds of the vehicle. In other words, on payment of the sale proceeds of the confiscation proceeding to the Orissa State Financial Corporation towards discharge of the loan account of the accused of a forest offence, it would lead to a system to reward him by repayment of his loan. Then it does not become a penalty nor the action become punitive, but it remains as a reward to the accused of forest offence. Such a concept is totally not conceivable from any provision in the Act, 1972 or the Act, 1951. [AIR 2002 Orissa 130 Overruled].  -  In that case, the stand of the Revenue was disapproved by the Orissa High Court. 16. Learned Counsel for the petitioner submitted that the photographs taken by the petitioner are not goods which can be sold and is not a marketable commodity like any other goods.',
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		'casesref' => 'Imagic Creative Pvt. Ltd. v. Commissioner of Commercial Taxes and Ors.;',
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		'counselplain' => '',
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		'decidedon' => '2008-04-02',
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		'judge' => ' A.K. Ganguly, C.J. and; B.N. Mahapatra, J.',
		'judgement' => '<p>A.K. Ganguly, C.J.</p><p>1. Initially three S.J.Cs. being S.J.C. Nos. 10 of 1997, 8 of 1997 and 9 of 1997 were filed and subsequently renumbered as STREV Nos. 212, 214 and 216 of 2007 respectively. In view of the common questions of facts and law, all the three Revision Applications are heard and disposed of together.</p><p>2. The following questions of law arising out of the order passed by the Orissa Sales Tax Tribunal on 8.12.1993 in Second Appeal Nos. 3345 to 3350 of 1991-92 have been referred to this Hon'ble High Court in terms of the order of this Hon'ble Court dated 24.2.1997. The questions are:</p><p>(i) Whether on the facts and in the circumstances of the case, the Tribunal is right to held that tax is exigible for photographs as execution of works contract ?</p><p>(ii) Whether on the facts and in the circumstances of the case, the conclusion of the Tribunal is perverse due to non-consideration and mis-consideration of facts and law and, therefore, it is liable to be set aside for re-hearing ?</p><p>3. The materials facts out of which those questions arise are that the petitioner carries on the business of processing and developing photography. In the usual course of business, the petitioner takes photographs of persons or of family and then develops the negative by employing his skill and labour and then supplies the photographs to the clients. These photographs which are prepared by the petitioner are not commercial items because they are neither purchased nor sold. However, to develop these photographs employment of skill and labour is essential. It may be mentioned that petitioner does not carry on any sale of photographs of national leaders, God and Goddess.</p><p>4. After the passing of 46th amendment of the Constitution of India and consequent amendments thereto in Orissa Sales Tax Act (OST Act), the Sales Tax Officer, Bhubaneswar-II Circle, Bhubaneswar sent notices to assess the petitioner as an unregistered dealer under Section 12 (5) of the OST Act, inter alia, contending that the petitioner's activities can be called 'works contract'. Pursuant to said notice, the petitioner gave its reply and appeared before the Sales Tax Officer and produced the books of account and documents including Receipts, Purchase Memos, Vouchers, Ledger and thereby denied its liability under the OST Act. The petitioner also submitted objection petitions on various dates i.e. 28.12.1985, 10.1.1986, 20.2.1986 and 29.2.1988 contending, inter alia, that the petitioner has no sales tax liability under OST Act and the notices, which were issued, are without jurisdiction.</p><p>5. Ignoring the said objections of the petitioner, the Sales Tax Officer, Bhubaneswar-II Circle, Bhubaneswar assessed the petitioner as an unregistered dealer, inter alia, holding that the petitioner is liable to pay sales tax as petitioner has been alleged to carry activities of 'works contract'. Therefore, orders of assessment being dated 29.2.1988 for the years 1984-85 (9/84 to 3/85), 1985-86 and 1986- 87 under Section 12(5) of OST Act and under Rule 5 of the Orissa Additional Sales Tax Rules, 1975 were passed and a tax of Rs. 20,765.00 and penalty of Rs. 5,000.00 totalling to Rs. 25,765.00 was imposed on the petitioner. The petitioner then filed the First Appeal before the learned Assistant Commissioner of Sales Tax. The First Appellate Authority by an order dated 27.9.1991 confirmed the levy of tax under the OST Act, but reduced the penalty to Rs. 1250.00. Thereupon, the petitioner filed the Second Appeal before the Orissa Sales Tax Tribunal, Cuttack. The said Tribunal heard the Second Appeal and in course of hearing, the petitioner raised various contentions. Ultimately, the Tribunal upheld the levy of tax but deleted the penalty.</p><p>6. Thereafter the petitioner came up with a reference application under Section 24(1) of the Orissa Sales Tax Act framing certain questions for being referred to the Hon'ble High Court. The said prayer of the petitioner was rejected by the Tribunal. Then the petitioner moved Hon'ble High Court under Section 24(2)(b) of the Orissa Sales Tax Act, 1947 whereupon the High Court directed the Tribunal to state to case and refer the questions under Section 24(3) of the OST Act for a decision of the High Court.</p><p>7. Accordingly, the Tribunal stated the case and referred the aforesaid questions for a decision of the High Court.</p><p>8. Learned Counsel for the petitioner before the High Court submitted that in the transaction in question, there is no contract of sale between the petitioner and the client. It is only a contract of service and the photographs, which the petitioner produced by supplying the same has no commercial value and are not marketable. So, there is no question of a works contract. It is the consistent stand of the petitioner that the present photographs which are produced by the petitioner have no utility or value to any other person than the customer. By developing such photographs, the petitioner only renders service to his customers. The customer pays for the service rendered by the petitioner. It is the contention of the petitioner that his activity is similar to that of consulting firm preparing plan and sketches pursuant to client's specification or professional giving opinion on papers. All those activities are done to serve the client. Therefore, this does not come within the purview of the definition of 'goods', 'sale', 'dealer' or 'works contract'. It is the petitioner's case that he purchased the goods, namely, papers on payment of sales tax. Further levy of tax on the personal service rendered to the client of the petitioner will amount to double taxation. It is also the contention of the petitioner that the paper which is used in the photography are incidental and insignificant.</p><p>9. In support of its contention, learned Counsel for the petitioner has relied on several judgments. First reliance was place on the judgment of the Supreme Court in the case of Sales Tax Officer v. B.C. Kame reported in 39 STC 237(SC). At page 241 of the report, learned Judges of the Supreme Court held that a photographer takes the photograph and develops the negatives and does other photographic work and thereafter supplies the prints to his client. By doing so he cannot be said to enter into a contract for sale of goods. On the other hand, the contract is for use of skill and labour by the photographer to bring about the desired result. Learned Judges held that the job of a photographer is a contract for work and labour and it is not a contract of sale.</p><p>10. Reliance was also placed on a judgment of this High Court in the case of Photo Emporium v. Addl. District Magistrate reported in 77 STC 199 in which this High Court followed the ratio of the judgment of the Supreme Court in the case of B.C. Kame. In that case, the stand of the Revenue was disapproved by the Orissa High Court.</p><p>11. Similar view was taken in 110 STC 145 in the case of Foto Colour Labs Pvt. Ltd. v. Commercial Taxes Officer where the Tribunal held that the transfer of paper in the photograph is purely incidental and payment is only taken to give positive prints and not to get the photo papers. Therefore, the contract in between the petitioner and his client is not a contract of sale, and neither directly or indirectly works contract is involved in the supply of photo papers. Similar view was taken by the West Bengal Taxation Tribunal in the case of Studio Kamalalaya v. Commercial Tax Officer reported in 89 STC 307.</p><p>12. In the case of Bavens v. Onion of India report in 97 STC 161, learned Judges held that when a photographer takes a photograph of his customer, he develops the negative and supplies positive prints in the desired size to the customer. In doing so the photographer uses his own camera and his own film. The negative belongs to the photographer and not to the customer. No basic goods are provided by the customer which are subjected to processing by the photographer so as to make the contract a works contract. There is no accretion to goods or property or the nucleus of a property which belongs to the customer. It is the skill of the photographer which is most important to get the desired result.</p><p>13. Hon'ble Karnataka High Court followed the same principle in the case of Keshoram Surlndranath Photo-mag Pvt. Ltd. v. Assistant Commissioner of Commercial Taxes reported in 121 STC 175. In that judgment, learned Judges of the Karnataka High Court relied on the judgment of the Supreme Court in B.C. Kame's case and came to the conclusion that in the job of the photographer in supplying positive prints to his customer, no works contract is involved and photographs are not marketable or saleable commodity and as such no tax can be levied on it.</p><p>14. Against the said judgment of the Karnataka High Court, the State of Karnataka High Court filed a S.L.P. before the Hon'ble Supreme Court bearing SLP Nos. 6136-6163 of 2000 and the Hon'ble Supreme Court dismissed the SLP on 20th April, 2000.</p><p>15. In the case of Rainbow Colour Lab v. State of M.P. learned Judges of the Hon'ble Supreme Court reiterated its judgment in B.C. Kame's case and came to the following conclusion:</p><p>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.</p><p>Hon'ble Supreme Court in Bharat Sanchar Nigam Ltd. v. Union of India reported in 145 STC 91 again reiterated the principle in B.C. Kame's case and held that the work done by the photographer is only in the nature of a service contract not involving any sale of goods and held that the stand taken by the State cannot be sustained.</p><p>16. Learned Counsel for the petitioner submitted that the photographs taken by the petitioner are not goods which can be sold and is not a marketable commodity like any other goods. When the copies of photographs are made out, they have no utility or value to any other person than the customer. It is already admitted that the papers utilized for photographs are tax paid goods. Therefore, it is contended by the learned Counsel for the petitioner that the work of photography does not come within the purview of works contract as defined in Section 2(jj) of the Orissa Sales Tax Act.</p><p>17. Learned Counsel for the Revenue in this case virtually did not contest the submission made by the learned Counsel for the petitioner and in support of his contention, learned Counsel for the Revenue relied on a decision of the Supreme Court in the case of Imagic Creative Pvt. Ltd. v. Commissioner of Commercial Taxes and Ors. reported in (2008) 10 RC 236. In that judgment, learned Judges held that since the contract in question is a service contract, it is difficult to hold that in a case of this nature, sales tax would be payable on the value of the entire contract irrespective of the element of service provided.</p><p>For the reasons discussed above, we answer the first question in the negative and the second question, in the affirmative. We thus answer both the questions in favour of the assessee and against the Revenue.</p><p>The three revision applications are thus disposed of.</p><p>No costs.</p><p>B.N. Mahapatra, J.</p><p>18. I agree.<p></p><p>',
		'observations' => null,
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		'prhistory' => '',
		'pubs' => '106(2008)CLT317; 2008(I)OLR953; (2008)17VST289(Orissa)',
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		'respondent' => 'Commissioner of Sales Tax',
		'sub' => 'Sales Tax/VAT',
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	(int) 0 => '<p>A.K. Ganguly, C.J.',
	(int) 1 => '<p>1. Initially three S.J.Cs. being S.J.C. Nos. 10 of 1997, 8 of 1997 and 9 of 1997 were filed and subsequently renumbered as STREV Nos. 212, 214 and 216 of 2007 respectively. In view of the common questions of facts and law, all the three Revision Applications are heard and disposed of together.',
	(int) 2 => '<p>2. The following questions of law arising out of the order passed by the Orissa Sales Tax Tribunal on 8.12.1993 in Second Appeal Nos. 3345 to 3350 of 1991-92 have been referred to this Hon'ble High Court in terms of the order of this Hon'ble Court dated 24.2.1997. The questions are:',
	(int) 3 => '<p>(i) Whether on the facts and in the circumstances of the case, the Tribunal is right to held that tax is exigible for photographs as execution of works contract ?',
	(int) 4 => '<p>(ii) Whether on the facts and in the circumstances of the case, the conclusion of the Tribunal is perverse due to non-consideration and mis-consideration of facts and law and, therefore, it is liable to be set aside for re-hearing ?',
	(int) 5 => '<p>3. The materials facts out of which those questions arise are that the petitioner carries on the business of processing and developing photography. In the usual course of business, the petitioner takes photographs of persons or of family and then develops the negative by employing his skill and labour and then supplies the photographs to the clients. These photographs which are prepared by the petitioner are not commercial items because they are neither purchased nor sold. However, to develop these photographs employment of skill and labour is essential. It may be mentioned that petitioner does not carry on any sale of photographs of national leaders, God and Goddess.',
	(int) 6 => '<p>4. After the passing of 46th amendment of the Constitution of India and consequent amendments thereto in Orissa Sales Tax Act (OST Act), the Sales Tax Officer, Bhubaneswar-II Circle, Bhubaneswar sent notices to assess the petitioner as an unregistered dealer under Section 12 (5) of the OST Act, inter alia, contending that the petitioner's activities can be called 'works contract'. Pursuant to said notice, the petitioner gave its reply and appeared before the Sales Tax Officer and produced the books of account and documents including Receipts, Purchase Memos, Vouchers, Ledger and thereby denied its liability under the OST Act. The petitioner also submitted objection petitions on various dates i.e. 28.12.1985, 10.1.1986, 20.2.1986 and 29.2.1988 contending, inter alia, that the petitioner has no sales tax liability under OST Act and the notices, which were issued, are without jurisdiction.',
	(int) 7 => '<p>5. Ignoring the said objections of the petitioner, the Sales Tax Officer, Bhubaneswar-II Circle, Bhubaneswar assessed the petitioner as an unregistered dealer, inter alia, holding that the petitioner is liable to pay sales tax as petitioner has been alleged to carry activities of 'works contract'. Therefore, orders of assessment being dated 29.2.1988 for the years 1984-85 (9/84 to 3/85), 1985-86 and 1986- 87 under Section 12(5) of OST Act and under Rule 5 of the Orissa Additional Sales Tax Rules, 1975 were passed and a tax of Rs. 20,765.00 and penalty of Rs. 5,000.00 totalling to Rs. 25,765.00 was imposed on the petitioner. The petitioner then filed the First Appeal before the learned Assistant Commissioner of Sales Tax. The First Appellate Authority by an order dated 27.9.1991 confirmed the levy of tax under the OST Act, but reduced the penalty to Rs. 1250.00. Thereupon, the petitioner filed the Second Appeal before the Orissa Sales Tax Tribunal, Cuttack. The said Tribunal heard the Second Appeal and in course of hearing, the petitioner raised various contentions. Ultimately, the Tribunal upheld the levy of tax but deleted the penalty.',
	(int) 8 => '<p>6. Thereafter the petitioner came up with a reference application under Section 24(1) of the Orissa Sales Tax Act framing certain questions for being referred to the Hon'ble High Court. The said prayer of the petitioner was rejected by the Tribunal. Then the petitioner moved Hon'ble High Court under Section 24(2)(b) of the Orissa Sales Tax Act, 1947 whereupon the High Court directed the Tribunal to state to case and refer the questions under Section 24(3) of the OST Act for a decision of the High Court.',
	(int) 9 => '<p>7. Accordingly, the Tribunal stated the case and referred the aforesaid questions for a decision of the High Court.',
	(int) 10 => '<p>8. Learned Counsel for the petitioner before the High Court submitted that in the transaction in question, there is no contract of sale between the petitioner and the client. It is only a contract of service and the photographs, which the petitioner produced by supplying the same has no commercial value and are not marketable. So, there is no question of a works contract. It is the consistent stand of the petitioner that the present photographs which are produced by the petitioner have no utility or value to any other person than the customer. By developing such photographs, the petitioner only renders service to his customers. The customer pays for the service rendered by the petitioner. It is the contention of the petitioner that his activity is similar to that of consulting firm preparing plan and sketches pursuant to client's specification or professional giving opinion on papers. All those activities are done to serve the client. Therefore, this does not come within the purview of the definition of 'goods', 'sale', 'dealer' or 'works contract'. It is the petitioner's case that he purchased the goods, namely, papers on payment of sales tax. Further levy of tax on the personal service rendered to the client of the petitioner will amount to double taxation. It is also the contention of the petitioner that the paper which is used in the photography are incidental and insignificant.',
	(int) 11 => '<p>9. In support of its contention, learned Counsel for the petitioner has relied on several judgments. First reliance was place on the judgment of the Supreme Court in the case of Sales Tax Officer v. B.C. Kame reported in 39 STC 237(SC). At page 241 of the report, learned Judges of the Supreme Court held that a photographer takes the photograph and develops the negatives and does other photographic work and thereafter supplies the prints to his client. By doing so he cannot be said to enter into a contract for sale of goods. On the other hand, the contract is for use of skill and labour by the photographer to bring about the desired result. Learned Judges held that the job of a photographer is a contract for work and labour and it is not a contract of sale.',
	(int) 12 => '<p>10. Reliance was also placed on a judgment of this High Court in the case of Photo Emporium v. Addl. District Magistrate reported in 77 STC 199 in which this High Court followed the ratio of the judgment of the Supreme Court in the case of B.C. Kame. In that case, the stand of the Revenue was disapproved by the Orissa High Court.',
	(int) 13 => '<p>11. Similar view was taken in 110 STC 145 in the case of Foto Colour Labs Pvt. Ltd. v. Commercial Taxes Officer where the Tribunal held that the transfer of paper in the photograph is purely incidental and payment is only taken to give positive prints and not to get the photo papers. Therefore, the contract in between the petitioner and his client is not a contract of sale, and neither directly or indirectly works contract is involved in the supply of photo papers. Similar view was taken by the West Bengal Taxation Tribunal in the case of Studio Kamalalaya v. Commercial Tax Officer reported in 89 STC 307.',
	(int) 14 => '<p>12. In the case of Bavens v. Onion of India report in 97 STC 161, learned Judges held that when a photographer takes a photograph of his customer, he develops the negative and supplies positive prints in the desired size to the customer. In doing so the photographer uses his own camera and his own film. The negative belongs to the photographer and not to the customer. No basic goods are provided by the customer which are subjected to processing by the photographer so as to make the contract a works contract. There is no accretion to goods or property or the nucleus of a property which belongs to the customer. It is the skill of the photographer which is most important to get the desired result.',
	(int) 15 => '<p>13. Hon'ble Karnataka High Court followed the same principle in the case of Keshoram Surlndranath Photo-mag Pvt. Ltd. v. Assistant Commissioner of Commercial Taxes reported in 121 STC 175. In that judgment, learned Judges of the Karnataka High Court relied on the judgment of the Supreme Court in B.C. Kame's case and came to the conclusion that in the job of the photographer in supplying positive prints to his customer, no works contract is involved and photographs are not marketable or saleable commodity and as such no tax can be levied on it.',
	(int) 16 => '<p>14. Against the said judgment of the Karnataka High Court, the State of Karnataka High Court filed a S.L.P. before the Hon'ble Supreme Court bearing SLP Nos. 6136-6163 of 2000 and the Hon'ble Supreme Court dismissed the SLP on 20th April, 2000.',
	(int) 17 => '<p>15. In the case of Rainbow Colour Lab v. State of M.P. learned Judges of the Hon'ble Supreme Court reiterated its judgment in B.C. Kame's case and came to the following conclusion:',
	(int) 18 => '<p>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.',
	(int) 19 => '<p>Hon'ble Supreme Court in Bharat Sanchar Nigam Ltd. v. Union of India reported in 145 STC 91 again reiterated the principle in B.C. Kame's case and held that the work done by the photographer is only in the nature of a service contract not involving any sale of goods and held that the stand taken by the State cannot be sustained.',
	(int) 20 => '<p>16. Learned Counsel for the petitioner submitted that the photographs taken by the petitioner are not goods which can be sold and is not a marketable commodity like any other goods. When the copies of photographs are made out, they have no utility or value to any other person than the customer. It is already admitted that the papers utilized for photographs are tax paid goods. Therefore, it is contended by the learned Counsel for the petitioner that the work of photography does not come within the purview of works contract as defined in Section 2(jj) of the Orissa Sales Tax Act.',
	(int) 21 => '<p>17. Learned Counsel for the Revenue in this case virtually did not contest the submission made by the learned Counsel for the petitioner and in support of his contention, learned Counsel for the Revenue relied on a decision of the Supreme Court in the case of Imagic Creative Pvt. Ltd. v. Commissioner of Commercial Taxes and Ors. reported in (2008) 10 RC 236. In that judgment, learned Judges held that since the contract in question is a service contract, it is difficult to hold that in a case of this nature, sales tax would be payable on the value of the entire contract irrespective of the element of service provided.',
	(int) 22 => '<p>For the reasons discussed above, we answer the first question in the negative and the second question, in the affirmative. We thus answer both the questions in favour of the assessee and against the Revenue.',
	(int) 23 => '<p>The three revision applications are thus disposed of.',
	(int) 24 => '<p>No costs.',
	(int) 25 => '<p>B.N. Mahapatra, J.',
	(int) 26 => '<p>18. I agree.<p>',
	(int) 27 => '<p>'
)
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A.K. Ganguly, C.J.

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			'casename' => 'Studio Sujata Vs. Commissioner of Sales Tax',
			'casenote' => 'Sales Tax - Assessment - Contract of Sale - Section 12 (5) of Orissa Sales Tax 1947 - Petitioner carries on business of processing and developing photography - Revenue assessed petitioner under Section 12(5) of Act on ground that activities of petitioner can be called works contract - Petitioner approached to Assistant of Sales Tax on ground that there is no contract of sale between the petitioner and the client, it is only service - Dismissed and affirmed by Tribunal - Hence present petition - Whether Tribunal is right to held that tax is exigible for photographs as execution of works contract or not? - Held, as per precedent laid down by Supreme Court in case of Sales Tax Officer v. B.C. Kame that photographer takes photograph and develops negatives and does other photographic work and thereafter supplies prints to his client - By doing so he cannot be said to enter into contract for sale of goods - Therefore, job of photographer is contract for work and labour and it is not contract of sale - Revenue committed mistake in assessing petitioner under Section 12(5) of Act on basis of contract of sale - Petition disposed of accordingly  - STATE FINANCIAL CORPORATIONS ACT, 1951 [63/1951]. Section 29; [P.K. Tripathy, A.K. Parichha & N.Prusty, JJ] Discharge of loan  Orissa Forest Act (14 of 1972), Section 56  Confiscation of vehicle - Held, The Authorities under Section 56 of the Orissa Forest Act, 1972 are not obliged to release the vehicle from the confiscation proceeding or to pay the sale proceeds of the vehicle after the order of confiscation in favour of Orissa State Financial Corporation when such vehicles were purchased on being financed by the Orissa State Financial Corporation and the loan had not been liquidated by the date of the seizure/confiscation of the vehicle. Concept of first charge or second charge has no applicability when the vehicle is not otherwise disposed of to determine the liabilities of the loanee. On the other hand the vehicle having been found indulged in forest offences was made subject matter of a confiscation proceedings, and therefore, the procedure followed for confiscation of the vehicle and for its sale is punitive in nature and not with a view to give benefit to anybody including the Department which initiated the confiscation proceeding. Apart from that, the claim of the Orissa State Financial Corporation as against its loanee (who had taken the vehicle on hire- purchase agreement) brings the loanee and the sureties within the default clause under the State Financial Corporation Act, 1951 or the heirs and successors of such persons. Procedure is provided in the Act, 1951 and the Rules thereof about the manner in which such loan is to be recovered, and in that context only the vehicle under the hire-purchase agreement is placed as the first charge. If such property is not available for any reason, then the loan is not automatically waived or the loanee and his sureties are not automatically redeemed of the liabilities to repay. The Financial Corporation is concerned with repayment of loan either from the property or persons offered as surety. Thus, a vehicle, which is subject matter of confiscation proceeding under the Act, 1872, being not available to the Orissa State Financial Corporation for adjustment of the unpaid loan, that does not at all bring out an anomalous situation so as to defeat the right of the Orissa State Financial Corporation. Agreement between the Orissa State Financial Corporation and the loanee is a pure and simple contract governed by the provisions of the Contract Act, 1872 read with the provisions in the Act, 1951 and its Rules. On the other hand, a confiscation proceeding under the Act, 1972 is punitive in nature for commission of a forest offence. Thus, by virtue of the provision in Section 56 read with Section 64 (2) of the Act, 1972, the action taken for confiscation of the vehicle cannot be extended to grant protection of the loan advanced by Orissa State Financial Corporation. By doing that it amounts to grant premium to the pick-pockets in as much as, by making payment of the confiscation amount in favour of the Orissa State Financial Corporation the loan burden of the accused of the forest offence is reduced to the extent of the sale proceeds of the vehicle. In other words, on payment of the sale proceeds of the confiscation proceeding to the Orissa State Financial Corporation towards discharge of the loan account of the accused of a forest offence, it would lead to a system to reward him by repayment of his loan. Then it does not become a penalty nor the action become punitive, but it remains as a reward to the accused of forest offence. Such a concept is totally not conceivable from any provision in the Act, 1972 or the Act, 1951. [AIR 2002 Orissa 130 Overruled]. -- STATE FINANCIAL CORPORATIONS ACT, 1951. 
Section 29; Discharge of loan  Orissa Forest Act (14 of 1972), Section 56  Confiscation of vehicle - Held, The Authorities under Section 56 of the Orissa Forest Act, 1972 are not obliged to release the vehicle from the confiscation proceeding or to pay the sale proceeds of the vehicle after the order of confiscation in favour of Orissa State Financial Corporation when such vehicles were purchased on being financed by the Orissa State Financial Corporation and the loan had not been liquidated by the date of the seizure/confiscation of the vehicle. Concept of first charge or second charge has no applicability when the vehicle is not otherwise disposed of to determine the liabilities of the loanee. On the other hand the vehicle having been found indulged in forest offences was made subject matter of a confiscation proceedings, and therefore, the procedure followed for confiscation of the vehicle and for its sale is punitive in nature and not with a view to give benefit to anybody including the Department which initiated the confiscation proceeding. Apart from that, the claim of the Orissa State Financial Corporation as against its loanee (who had taken the vehicle on hire- purchase agreement) brings the loanee and the sureties within the default clause under the State Financial Corporation Act, 1951 or the heirs and successors of such persons. Procedure is provided in the Act, 1951 and the Rules thereof about the manner in which such loan is to be recovered, and in that context only the vehicle under the hire-purchase agreement is placed as the first charge. If such property is not available for any reason, then the loan is not automatically waived or the loanee and his sureties are not automatically redeemed of the liabilities to repay. The Financial Corporation is concerned with repayment of loan either from the property or persons offered as surety. Thus, a vehicle, which is subject matter of confiscation proceeding under the Act, 1872, being not available to the Orissa State Financial Corporation for adjustment of the unpaid loan, that does not at all bring out an anomalous situation so as to defeat the right of the Orissa State Financial Corporation. Agreement between the Orissa State Financial Corporation and the loanee is a pure and simple contract governed by the provisions of the Contract Act, 1872 read with the provisions in the Act, 1951 and its Rules. On the other hand, a confiscation proceeding under the Act, 1972 is punitive in nature for commission of a forest offence. Thus, by virtue of the provision in Section 56 read with Section 64 (2) of the Act, 1972, the action taken for confiscation of the vehicle cannot be extended to grant protection of the loan advanced by Orissa State Financial Corporation. By doing that it amounts to grant premium to the pick-pockets in as much as, by making payment of the confiscation amount in favour of the Orissa State Financial Corporation the loan burden of the accused of the forest offence is reduced to the extent of the sale proceeds of the vehicle. In other words, on payment of the sale proceeds of the confiscation proceeding to the Orissa State Financial Corporation towards discharge of the loan account of the accused of a forest offence, it would lead to a system to reward him by repayment of his loan. Then it does not become a penalty nor the action become punitive, but it remains as a reward to the accused of forest offence. Such a concept is totally not conceivable from any provision in the Act, 1972 or the Act, 1951. [AIR 2002 Orissa 130 Overruled].  -  In that case, the stand of the Revenue was disapproved by the Orissa High Court. 16. Learned Counsel for the petitioner submitted that the photographs taken by the petitioner are not goods which can be sold and is not a marketable commodity like any other goods.',
			'caseanalysis' => null,
			'casesref' => 'Imagic Creative Pvt. Ltd. v. Commissioner of Commercial Taxes and Ors.;',
			'citingcases' => '',
			'counselplain' => '',
			'counseldef' => '',
			'court' => 'Orissa',
			'court_type' => 'HC',
			'decidedon' => '2008-04-02',
			'deposition' => '',
			'favorof' => null,
			'findings' => null,
			'judge' => ' A.K. Ganguly, C.J. and; B.N. Mahapatra, J.',
			'judgement' => '<p style="text-align: justify;">A.K. Ganguly, C.J.</p><p style="text-align: justify;">1. Initially three S.J.Cs. being S.J.C. Nos. 10 of 1997, 8 of 1997 and 9 of 1997 were filed and subsequently renumbered as STREV Nos. 212, 214 and 216 of 2007 respectively. In view of the common questions of facts and law, all the three Revision Applications are heard and disposed of together.</p><p style="text-align: justify;">2. The following questions of law arising out of the order passed by the Orissa Sales Tax Tribunal on 8.12.1993 in Second Appeal Nos. 3345 to 3350 of 1991-92 have been referred to this Hon'ble High Court in terms of the order of this Hon'ble Court dated 24.2.1997. The questions are:</p><p style="text-align: justify;">(i) Whether on the facts and in the circumstances of the case, the Tribunal is right to held that tax is exigible for photographs as execution of works contract ?</p><p style="text-align: justify;">(ii) Whether on the facts and in the circumstances of the case, the conclusion of the Tribunal is perverse due to non-consideration and mis-consideration of facts and law and, therefore, it is liable to be set aside for re-hearing ?</p><p style="text-align: justify;">3. The materials facts out of which those questions arise are that the petitioner carries on the business of processing and developing photography. In the usual course of business, the petitioner takes photographs of persons or of family and then develops the negative by employing his skill and labour and then supplies the photographs to the clients. These photographs which are prepared by the petitioner are not commercial items because they are neither purchased nor sold. However, to develop these photographs employment of skill and labour is essential. It may be mentioned that petitioner does not carry on any sale of photographs of national leaders, God and Goddess.</p><p style="text-align: justify;">4. After the passing of 46th amendment of the Constitution of India and consequent amendments thereto in Orissa Sales Tax Act (OST Act), the Sales Tax Officer, Bhubaneswar-II Circle, Bhubaneswar sent notices to assess the petitioner as an unregistered dealer under Section 12 (5) of the OST Act, inter alia, contending that the petitioner's activities can be called 'works contract'. Pursuant to said notice, the petitioner gave its reply and appeared before the Sales Tax Officer and produced the books of account and documents including Receipts, Purchase Memos, Vouchers, Ledger and thereby denied its liability under the OST Act. The petitioner also submitted objection petitions on various dates i.e. 28.12.1985, 10.1.1986, 20.2.1986 and 29.2.1988 contending, inter alia, that the petitioner has no sales tax liability under OST Act and the notices, which were issued, are without jurisdiction.</p><p style="text-align: justify;">5. Ignoring the said objections of the petitioner, the Sales Tax Officer, Bhubaneswar-II Circle, Bhubaneswar assessed the petitioner as an unregistered dealer, inter alia, holding that the petitioner is liable to pay sales tax as petitioner has been alleged to carry activities of 'works contract'. Therefore, orders of assessment being dated 29.2.1988 for the years 1984-85 (9/84 to 3/85), 1985-86 and 1986- 87 under Section 12(5) of OST Act and under Rule 5 of the Orissa Additional Sales Tax Rules, 1975 were passed and a tax of Rs. 20,765.00 and penalty of Rs. 5,000.00 totalling to Rs. 25,765.00 was imposed on the petitioner. The petitioner then filed the First Appeal before the learned Assistant Commissioner of Sales Tax. The First Appellate Authority by an order dated 27.9.1991 confirmed the levy of tax under the OST Act, but reduced the penalty to Rs. 1250.00. Thereupon, the petitioner filed the Second Appeal before the Orissa Sales Tax Tribunal, Cuttack. The said Tribunal heard the Second Appeal and in course of hearing, the petitioner raised various contentions. Ultimately, the Tribunal upheld the levy of tax but deleted the penalty.</p><p style="text-align: justify;">6. Thereafter the petitioner came up with a reference application under Section 24(1) of the Orissa Sales Tax Act framing certain questions for being referred to the Hon'ble High Court. The said prayer of the petitioner was rejected by the Tribunal. Then the petitioner moved Hon'ble High Court under Section 24(2)(b) of the Orissa Sales Tax Act, 1947 whereupon the High Court directed the Tribunal to state to case and refer the questions under Section 24(3) of the OST Act for a decision of the High Court.</p><p style="text-align: justify;">7. Accordingly, the Tribunal stated the case and referred the aforesaid questions for a decision of the High Court.</p><p style="text-align: justify;">8. Learned Counsel for the petitioner before the High Court submitted that in the transaction in question, there is no contract of sale between the petitioner and the client. It is only a contract of service and the photographs, which the petitioner produced by supplying the same has no commercial value and are not marketable. So, there is no question of a works contract. It is the consistent stand of the petitioner that the present photographs which are produced by the petitioner have no utility or value to any other person than the customer. By developing such photographs, the petitioner only renders service to his customers. The customer pays for the service rendered by the petitioner. It is the contention of the petitioner that his activity is similar to that of consulting firm preparing plan and sketches pursuant to client's specification or professional giving opinion on papers. All those activities are done to serve the client. Therefore, this does not come within the purview of the definition of 'goods', 'sale', 'dealer' or 'works contract'. It is the petitioner's case that he purchased the goods, namely, papers on payment of sales tax. Further levy of tax on the personal service rendered to the client of the petitioner will amount to double taxation. It is also the contention of the petitioner that the paper which is used in the photography are incidental and insignificant.</p><p style="text-align: justify;">9. In support of its contention, learned Counsel for the petitioner has relied on several judgments. First reliance was place on the judgment of the Supreme Court in the case of Sales Tax Officer v. B.C. Kame reported in 39 STC 237(SC). At page 241 of the report, learned Judges of the Supreme Court held that a photographer takes the photograph and develops the negatives and does other photographic work and thereafter supplies the prints to his client. By doing so he cannot be said to enter into a contract for sale of goods. On the other hand, the contract is for use of skill and labour by the photographer to bring about the desired result. Learned Judges held that the job of a photographer is a contract for work and labour and it is not a contract of sale.</p><p style="text-align: justify;">10. Reliance was also placed on a judgment of this High Court in the case of Photo Emporium v. Addl. District Magistrate reported in 77 STC 199 in which this High Court followed the ratio of the judgment of the Supreme Court in the case of B.C. Kame. In that case, the stand of the Revenue was disapproved by the Orissa High Court.</p><p style="text-align: justify;">11. Similar view was taken in 110 STC 145 in the case of Foto Colour Labs Pvt. Ltd. v. Commercial Taxes Officer where the Tribunal held that the transfer of paper in the photograph is purely incidental and payment is only taken to give positive prints and not to get the photo papers. Therefore, the contract in between the petitioner and his client is not a contract of sale, and neither directly or indirectly works contract is involved in the supply of photo papers. Similar view was taken by the West Bengal Taxation Tribunal in the case of Studio Kamalalaya v. Commercial Tax Officer reported in 89 STC 307.</p><p style="text-align: justify;">12. In the case of Bavens v. Onion of India report in 97 STC 161, learned Judges held that when a photographer takes a photograph of his customer, he develops the negative and supplies positive prints in the desired size to the customer. In doing so the photographer uses his own camera and his own film. The negative belongs to the photographer and not to the customer. No basic goods are provided by the customer which are subjected to processing by the photographer so as to make the contract a works contract. There is no accretion to goods or property or the nucleus of a property which belongs to the customer. It is the skill of the photographer which is most important to get the desired result.</p><p style="text-align: justify;">13. Hon'ble Karnataka High Court followed the same principle in the case of Keshoram Surlndranath Photo-mag Pvt. Ltd. v. Assistant Commissioner of Commercial Taxes reported in 121 STC 175. In that judgment, learned Judges of the Karnataka High Court relied on the judgment of the Supreme Court in B.C. Kame's case and came to the conclusion that in the job of the photographer in supplying positive prints to his customer, no works contract is involved and photographs are not marketable or saleable commodity and as such no tax can be levied on it.</p><p style="text-align: justify;">14. Against the said judgment of the Karnataka High Court, the State of Karnataka High Court filed a S.L.P. before the Hon'ble Supreme Court bearing SLP Nos. 6136-6163 of 2000 and the Hon'ble Supreme Court dismissed the SLP on 20th April, 2000.</p><p style="text-align: justify;">15. In the case of Rainbow Colour Lab v. State of M.P. learned Judges of the Hon'ble Supreme Court reiterated its judgment in B.C. Kame's case and came to the following conclusion:</p><p style="text-align: justify;">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.</p><p style="text-align: justify;">Hon'ble Supreme Court in Bharat Sanchar Nigam Ltd. v. Union of India reported in 145 STC 91 again reiterated the principle in B.C. Kame's case and held that the work done by the photographer is only in the nature of a service contract not involving any sale of goods and held that the stand taken by the State cannot be sustained.</p><p style="text-align: justify;">16. Learned Counsel for the petitioner submitted that the photographs taken by the petitioner are not goods which can be sold and is not a marketable commodity like any other goods. When the copies of photographs are made out, they have no utility or value to any other person than the customer. It is already admitted that the papers utilized for photographs are tax paid goods. Therefore, it is contended by the learned Counsel for the petitioner that the work of photography does not come within the purview of works contract as defined in Section 2(jj) of the Orissa Sales Tax Act.</p><p style="text-align: justify;">17. Learned Counsel for the Revenue in this case virtually did not contest the submission made by the learned Counsel for the petitioner and in support of his contention, learned Counsel for the Revenue relied on a decision of the Supreme Court in the case of Imagic Creative Pvt. Ltd. v. Commissioner of Commercial Taxes and Ors. reported in (2008) 10 RC 236. In that judgment, learned Judges held that since the contract in question is a service contract, it is difficult to hold that in a case of this nature, sales tax would be payable on the value of the entire contract irrespective of the element of service provided.</p><p style="text-align: justify;">For the reasons discussed above, we answer the first question in the negative and the second question, in the affirmative. We thus answer both the questions in favour of the assessee and against the Revenue.</p><p style="text-align: justify;">The three revision applications are thus disposed of.</p><p style="text-align: justify;">No costs.</p><p style="text-align: justify;">B.N. Mahapatra, J.</p><p style="text-align: justify;">18. I agree.<p style="text-align: justify;"></p><p style="text-align: justify;">',
			'observations' => null,
			'overruledby' => null,
			'prhistory' => '',
			'pubs' => '106(2008)CLT317; 2008(I)OLR953; (2008)17VST289(Orissa)',
			'ratiodecidendi' => '',
			'respondent' => 'Commissioner of Sales Tax',
			'sub' => 'Sales Tax/VAT',
			'link' => null,
			'circuit' => null
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$title_for_layout = 'Studio Sujata Vs Commissioner of Sales Tax - Citation 531271 - Court Judgment | '
$desc = array(
	'Judgement' => array(
		'id' => '531271',
		'acts' => '',
		'appealno' => '',
		'appellant' => 'Studio Sujata',
		'authreffered' => '',
		'casename' => 'Studio Sujata Vs. Commissioner of Sales Tax',
		'casenote' => 'Sales Tax - Assessment - Contract of Sale - Section 12 (5) of Orissa Sales Tax 1947 - Petitioner carries on business of processing and developing photography - Revenue assessed petitioner under Section 12(5) of Act on ground that activities of petitioner can be called works contract - Petitioner approached to Assistant of Sales Tax on ground that there is no contract of sale between the petitioner and the client, it is only service - Dismissed and affirmed by Tribunal - Hence present petition - Whether Tribunal is right to held that tax is exigible for photographs as execution of works contract or not? - Held, as per precedent laid down by Supreme Court in case of Sales Tax Officer v. B.C. Kame that photographer takes photograph and develops negatives and does other photographic work and thereafter supplies prints to his client - By doing so he cannot be said to enter into contract for sale of goods - Therefore, job of photographer is contract for work and labour and it is not contract of sale - Revenue committed mistake in assessing petitioner under Section 12(5) of Act on basis of contract of sale - Petition disposed of accordingly  - STATE FINANCIAL CORPORATIONS ACT, 1951 [63/1951]. Section 29; [P.K. Tripathy, A.K. Parichha & N.Prusty, JJ] Discharge of loan  Orissa Forest Act (14 of 1972), Section 56  Confiscation of vehicle - Held, The Authorities under Section 56 of the Orissa Forest Act, 1972 are not obliged to release the vehicle from the confiscation proceeding or to pay the sale proceeds of the vehicle after the order of confiscation in favour of Orissa State Financial Corporation when such vehicles were purchased on being financed by the Orissa State Financial Corporation and the loan had not been liquidated by the date of the seizure/confiscation of the vehicle. Concept of first charge or second charge has no applicability when the vehicle is not otherwise disposed of to determine the liabilities of the loanee. On the other hand the vehicle having been found indulged in forest offences was made subject matter of a confiscation proceedings, and therefore, the procedure followed for confiscation of the vehicle and for its sale is punitive in nature and not with a view to give benefit to anybody including the Department which initiated the confiscation proceeding. Apart from that, the claim of the Orissa State Financial Corporation as against its loanee (who had taken the vehicle on hire- purchase agreement) brings the loanee and the sureties within the default clause under the State Financial Corporation Act, 1951 or the heirs and successors of such persons. Procedure is provided in the Act, 1951 and the Rules thereof about the manner in which such loan is to be recovered, and in that context only the vehicle under the hire-purchase agreement is placed as the first charge. If such property is not available for any reason, then the loan is not automatically waived or the loanee and his sureties are not automatically redeemed of the liabilities to repay. The Financial Corporation is concerned with repayment of loan either from the property or persons offered as surety. Thus, a vehicle, which is subject matter of confiscation proceeding under the Act, 1872, being not available to the Orissa State Financial Corporation for adjustment of the unpaid loan, that does not at all bring out an anomalous situation so as to defeat the right of the Orissa State Financial Corporation. Agreement between the Orissa State Financial Corporation and the loanee is a pure and simple contract governed by the provisions of the Contract Act, 1872 read with the provisions in the Act, 1951 and its Rules. On the other hand, a confiscation proceeding under the Act, 1972 is punitive in nature for commission of a forest offence. Thus, by virtue of the provision in Section 56 read with Section 64 (2) of the Act, 1972, the action taken for confiscation of the vehicle cannot be extended to grant protection of the loan advanced by Orissa State Financial Corporation. By doing that it amounts to grant premium to the pick-pockets in as much as, by making payment of the confiscation amount in favour of the Orissa State Financial Corporation the loan burden of the accused of the forest offence is reduced to the extent of the sale proceeds of the vehicle. In other words, on payment of the sale proceeds of the confiscation proceeding to the Orissa State Financial Corporation towards discharge of the loan account of the accused of a forest offence, it would lead to a system to reward him by repayment of his loan. Then it does not become a penalty nor the action become punitive, but it remains as a reward to the accused of forest offence. Such a concept is totally not conceivable from any provision in the Act, 1972 or the Act, 1951. [AIR 2002 Orissa 130 Overruled]. -- STATE FINANCIAL CORPORATIONS ACT, 1951. 
Section 29; Discharge of loan  Orissa Forest Act (14 of 1972), Section 56  Confiscation of vehicle - Held, The Authorities under Section 56 of the Orissa Forest Act, 1972 are not obliged to release the vehicle from the confiscation proceeding or to pay the sale proceeds of the vehicle after the order of confiscation in favour of Orissa State Financial Corporation when such vehicles were purchased on being financed by the Orissa State Financial Corporation and the loan had not been liquidated by the date of the seizure/confiscation of the vehicle. Concept of first charge or second charge has no applicability when the vehicle is not otherwise disposed of to determine the liabilities of the loanee. On the other hand the vehicle having been found indulged in forest offences was made subject matter of a confiscation proceedings, and therefore, the procedure followed for confiscation of the vehicle and for its sale is punitive in nature and not with a view to give benefit to anybody including the Department which initiated the confiscation proceeding. Apart from that, the claim of the Orissa State Financial Corporation as against its loanee (who had taken the vehicle on hire- purchase agreement) brings the loanee and the sureties within the default clause under the State Financial Corporation Act, 1951 or the heirs and successors of such persons. Procedure is provided in the Act, 1951 and the Rules thereof about the manner in which such loan is to be recovered, and in that context only the vehicle under the hire-purchase agreement is placed as the first charge. If such property is not available for any reason, then the loan is not automatically waived or the loanee and his sureties are not automatically redeemed of the liabilities to repay. The Financial Corporation is concerned with repayment of loan either from the property or persons offered as surety. Thus, a vehicle, which is subject matter of confiscation proceeding under the Act, 1872, being not available to the Orissa State Financial Corporation for adjustment of the unpaid loan, that does not at all bring out an anomalous situation so as to defeat the right of the Orissa State Financial Corporation. Agreement between the Orissa State Financial Corporation and the loanee is a pure and simple contract governed by the provisions of the Contract Act, 1872 read with the provisions in the Act, 1951 and its Rules. On the other hand, a confiscation proceeding under the Act, 1972 is punitive in nature for commission of a forest offence. Thus, by virtue of the provision in Section 56 read with Section 64 (2) of the Act, 1972, the action taken for confiscation of the vehicle cannot be extended to grant protection of the loan advanced by Orissa State Financial Corporation. By doing that it amounts to grant premium to the pick-pockets in as much as, by making payment of the confiscation amount in favour of the Orissa State Financial Corporation the loan burden of the accused of the forest offence is reduced to the extent of the sale proceeds of the vehicle. In other words, on payment of the sale proceeds of the confiscation proceeding to the Orissa State Financial Corporation towards discharge of the loan account of the accused of a forest offence, it would lead to a system to reward him by repayment of his loan. Then it does not become a penalty nor the action become punitive, but it remains as a reward to the accused of forest offence. Such a concept is totally not conceivable from any provision in the Act, 1972 or the Act, 1951. [AIR 2002 Orissa 130 Overruled].  -  In that case, the stand of the Revenue was disapproved by the Orissa High Court. 16. Learned Counsel for the petitioner submitted that the photographs taken by the petitioner are not goods which can be sold and is not a marketable commodity like any other goods.',
		'caseanalysis' => null,
		'casesref' => 'Imagic Creative Pvt. Ltd. v. Commissioner of Commercial Taxes and Ors.;',
		'citingcases' => '',
		'counselplain' => '',
		'counseldef' => '',
		'court' => 'Orissa',
		'court_type' => 'HC',
		'decidedon' => '2008-04-02',
		'deposition' => '',
		'favorof' => null,
		'findings' => null,
		'judge' => ' A.K. Ganguly, C.J. and; B.N. Mahapatra, J.',
		'judgement' => '<p>A.K. Ganguly, C.J.</p><p>1. Initially three S.J.Cs. being S.J.C. Nos. 10 of 1997, 8 of 1997 and 9 of 1997 were filed and subsequently renumbered as STREV Nos. 212, 214 and 216 of 2007 respectively. In view of the common questions of facts and law, all the three Revision Applications are heard and disposed of together.</p><p>2. The following questions of law arising out of the order passed by the Orissa Sales Tax Tribunal on 8.12.1993 in Second Appeal Nos. 3345 to 3350 of 1991-92 have been referred to this Hon'ble High Court in terms of the order of this Hon'ble Court dated 24.2.1997. The questions are:</p><p>(i) Whether on the facts and in the circumstances of the case, the Tribunal is right to held that tax is exigible for photographs as execution of works contract ?</p><p>(ii) Whether on the facts and in the circumstances of the case, the conclusion of the Tribunal is perverse due to non-consideration and mis-consideration of facts and law and, therefore, it is liable to be set aside for re-hearing ?</p><p>3. The materials facts out of which those questions arise are that the petitioner carries on the business of processing and developing photography. In the usual course of business, the petitioner takes photographs of persons or of family and then develops the negative by employing his skill and labour and then supplies the photographs to the clients. These photographs which are prepared by the petitioner are not commercial items because they are neither purchased nor sold. However, to develop these photographs employment of skill and labour is essential. It may be mentioned that petitioner does not carry on any sale of photographs of national leaders, God and Goddess.</p><p>4. After the passing of 46th amendment of the Constitution of India and consequent amendments thereto in Orissa Sales Tax Act (OST Act), the Sales Tax Officer, Bhubaneswar-II Circle, Bhubaneswar sent notices to assess the petitioner as an unregistered dealer under Section 12 (5) of the OST Act, inter alia, contending that the petitioner's activities can be called 'works contract'. Pursuant to said notice, the petitioner gave its reply and appeared before the Sales Tax Officer and produced the books of account and documents including Receipts, Purchase Memos, Vouchers, Ledger and thereby denied its liability under the OST Act. The petitioner also submitted objection petitions on various dates i.e. 28.12.1985, 10.1.1986, 20.2.1986 and 29.2.1988 contending, inter alia, that the petitioner has no sales tax liability under OST Act and the notices, which were issued, are without jurisdiction.</p><p>5. Ignoring the said objections of the petitioner, the Sales Tax Officer, Bhubaneswar-II Circle, Bhubaneswar assessed the petitioner as an unregistered dealer, inter alia, holding that the petitioner is liable to pay sales tax as petitioner has been alleged to carry activities of 'works contract'. Therefore, orders of assessment being dated 29.2.1988 for the years 1984-85 (9/84 to 3/85), 1985-86 and 1986- 87 under Section 12(5) of OST Act and under Rule 5 of the Orissa Additional Sales Tax Rules, 1975 were passed and a tax of Rs. 20,765.00 and penalty of Rs. 5,000.00 totalling to Rs. 25,765.00 was imposed on the petitioner. The petitioner then filed the First Appeal before the learned Assistant Commissioner of Sales Tax. The First Appellate Authority by an order dated 27.9.1991 confirmed the levy of tax under the OST Act, but reduced the penalty to Rs. 1250.00. Thereupon, the petitioner filed the Second Appeal before the Orissa Sales Tax Tribunal, Cuttack. The said Tribunal heard the Second Appeal and in course of hearing, the petitioner raised various contentions. Ultimately, the Tribunal upheld the levy of tax but deleted the penalty.</p><p>6. Thereafter the petitioner came up with a reference application under Section 24(1) of the Orissa Sales Tax Act framing certain questions for being referred to the Hon'ble High Court. The said prayer of the petitioner was rejected by the Tribunal. Then the petitioner moved Hon'ble High Court under Section 24(2)(b) of the Orissa Sales Tax Act, 1947 whereupon the High Court directed the Tribunal to state to case and refer the questions under Section 24(3) of the OST Act for a decision of the High Court.</p><p>7. Accordingly, the Tribunal stated the case and referred the aforesaid questions for a decision of the High Court.</p><p>8. Learned Counsel for the petitioner before the High Court submitted that in the transaction in question, there is no contract of sale between the petitioner and the client. It is only a contract of service and the photographs, which the petitioner produced by supplying the same has no commercial value and are not marketable. So, there is no question of a works contract. It is the consistent stand of the petitioner that the present photographs which are produced by the petitioner have no utility or value to any other person than the customer. By developing such photographs, the petitioner only renders service to his customers. The customer pays for the service rendered by the petitioner. It is the contention of the petitioner that his activity is similar to that of consulting firm preparing plan and sketches pursuant to client's specification or professional giving opinion on papers. All those activities are done to serve the client. Therefore, this does not come within the purview of the definition of 'goods', 'sale', 'dealer' or 'works contract'. It is the petitioner's case that he purchased the goods, namely, papers on payment of sales tax. Further levy of tax on the personal service rendered to the client of the petitioner will amount to double taxation. It is also the contention of the petitioner that the paper which is used in the photography are incidental and insignificant.</p><p>9. In support of its contention, learned Counsel for the petitioner has relied on several judgments. First reliance was place on the judgment of the Supreme Court in the case of Sales Tax Officer v. B.C. Kame reported in 39 STC 237(SC). At page 241 of the report, learned Judges of the Supreme Court held that a photographer takes the photograph and develops the negatives and does other photographic work and thereafter supplies the prints to his client. By doing so he cannot be said to enter into a contract for sale of goods. On the other hand, the contract is for use of skill and labour by the photographer to bring about the desired result. Learned Judges held that the job of a photographer is a contract for work and labour and it is not a contract of sale.</p><p>10. Reliance was also placed on a judgment of this High Court in the case of Photo Emporium v. Addl. District Magistrate reported in 77 STC 199 in which this High Court followed the ratio of the judgment of the Supreme Court in the case of B.C. Kame. In that case, the stand of the Revenue was disapproved by the Orissa High Court.</p><p>11. Similar view was taken in 110 STC 145 in the case of Foto Colour Labs Pvt. Ltd. v. Commercial Taxes Officer where the Tribunal held that the transfer of paper in the photograph is purely incidental and payment is only taken to give positive prints and not to get the photo papers. Therefore, the contract in between the petitioner and his client is not a contract of sale, and neither directly or indirectly works contract is involved in the supply of photo papers. Similar view was taken by the West Bengal Taxation Tribunal in the case of Studio Kamalalaya v. Commercial Tax Officer reported in 89 STC 307.</p><p>12. In the case of Bavens v. Onion of India report in 97 STC 161, learned Judges held that when a photographer takes a photograph of his customer, he develops the negative and supplies positive prints in the desired size to the customer. In doing so the photographer uses his own camera and his own film. The negative belongs to the photographer and not to the customer. No basic goods are provided by the customer which are subjected to processing by the photographer so as to make the contract a works contract. There is no accretion to goods or property or the nucleus of a property which belongs to the customer. It is the skill of the photographer which is most important to get the desired result.</p><p>13. Hon'ble Karnataka High Court followed the same principle in the case of Keshoram Surlndranath Photo-mag Pvt. Ltd. v. Assistant Commissioner of Commercial Taxes reported in 121 STC 175. In that judgment, learned Judges of the Karnataka High Court relied on the judgment of the Supreme Court in B.C. Kame's case and came to the conclusion that in the job of the photographer in supplying positive prints to his customer, no works contract is involved and photographs are not marketable or saleable commodity and as such no tax can be levied on it.</p><p>14. Against the said judgment of the Karnataka High Court, the State of Karnataka High Court filed a S.L.P. before the Hon'ble Supreme Court bearing SLP Nos. 6136-6163 of 2000 and the Hon'ble Supreme Court dismissed the SLP on 20th April, 2000.</p><p>15. In the case of Rainbow Colour Lab v. State of M.P. learned Judges of the Hon'ble Supreme Court reiterated its judgment in B.C. Kame's case and came to the following conclusion:</p><p>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.</p><p>Hon'ble Supreme Court in Bharat Sanchar Nigam Ltd. v. Union of India reported in 145 STC 91 again reiterated the principle in B.C. Kame's case and held that the work done by the photographer is only in the nature of a service contract not involving any sale of goods and held that the stand taken by the State cannot be sustained.</p><p>16. Learned Counsel for the petitioner submitted that the photographs taken by the petitioner are not goods which can be sold and is not a marketable commodity like any other goods. When the copies of photographs are made out, they have no utility or value to any other person than the customer. It is already admitted that the papers utilized for photographs are tax paid goods. Therefore, it is contended by the learned Counsel for the petitioner that the work of photography does not come within the purview of works contract as defined in Section 2(jj) of the Orissa Sales Tax Act.</p><p>17. Learned Counsel for the Revenue in this case virtually did not contest the submission made by the learned Counsel for the petitioner and in support of his contention, learned Counsel for the Revenue relied on a decision of the Supreme Court in the case of Imagic Creative Pvt. Ltd. v. Commissioner of Commercial Taxes and Ors. reported in (2008) 10 RC 236. In that judgment, learned Judges held that since the contract in question is a service contract, it is difficult to hold that in a case of this nature, sales tax would be payable on the value of the entire contract irrespective of the element of service provided.</p><p>For the reasons discussed above, we answer the first question in the negative and the second question, in the affirmative. We thus answer both the questions in favour of the assessee and against the Revenue.</p><p>The three revision applications are thus disposed of.</p><p>No costs.</p><p>B.N. Mahapatra, J.</p><p>18. I agree.<p></p><p>',
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	(int) 0 => '<p>A.K. Ganguly, C.J.',
	(int) 1 => '<p>1. Initially three S.J.Cs. being S.J.C. Nos. 10 of 1997, 8 of 1997 and 9 of 1997 were filed and subsequently renumbered as STREV Nos. 212, 214 and 216 of 2007 respectively. In view of the common questions of facts and law, all the three Revision Applications are heard and disposed of together.',
	(int) 2 => '<p>2. The following questions of law arising out of the order passed by the Orissa Sales Tax Tribunal on 8.12.1993 in Second Appeal Nos. 3345 to 3350 of 1991-92 have been referred to this Hon'ble High Court in terms of the order of this Hon'ble Court dated 24.2.1997. The questions are:',
	(int) 3 => '<p>(i) Whether on the facts and in the circumstances of the case, the Tribunal is right to held that tax is exigible for photographs as execution of works contract ?',
	(int) 4 => '<p>(ii) Whether on the facts and in the circumstances of the case, the conclusion of the Tribunal is perverse due to non-consideration and mis-consideration of facts and law and, therefore, it is liable to be set aside for re-hearing ?',
	(int) 5 => '<p>3. The materials facts out of which those questions arise are that the petitioner carries on the business of processing and developing photography. In the usual course of business, the petitioner takes photographs of persons or of family and then develops the negative by employing his skill and labour and then supplies the photographs to the clients. These photographs which are prepared by the petitioner are not commercial items because they are neither purchased nor sold. However, to develop these photographs employment of skill and labour is essential. It may be mentioned that petitioner does not carry on any sale of photographs of national leaders, God and Goddess.',
	(int) 6 => '<p>4. After the passing of 46th amendment of the Constitution of India and consequent amendments thereto in Orissa Sales Tax Act (OST Act), the Sales Tax Officer, Bhubaneswar-II Circle, Bhubaneswar sent notices to assess the petitioner as an unregistered dealer under Section 12 (5) of the OST Act, inter alia, contending that the petitioner's activities can be called 'works contract'. Pursuant to said notice, the petitioner gave its reply and appeared before the Sales Tax Officer and produced the books of account and documents including Receipts, Purchase Memos, Vouchers, Ledger and thereby denied its liability under the OST Act. The petitioner also submitted objection petitions on various dates i.e. 28.12.1985, 10.1.1986, 20.2.1986 and 29.2.1988 contending, inter alia, that the petitioner has no sales tax liability under OST Act and the notices, which were issued, are without jurisdiction.',
	(int) 7 => '<p>5. Ignoring the said objections of the petitioner, the Sales Tax Officer, Bhubaneswar-II Circle, Bhubaneswar assessed the petitioner as an unregistered dealer, inter alia, holding that the petitioner is liable to pay sales tax as petitioner has been alleged to carry activities of 'works contract'. Therefore, orders of assessment being dated 29.2.1988 for the years 1984-85 (9/84 to 3/85), 1985-86 and 1986- 87 under Section 12(5) of OST Act and under Rule 5 of the Orissa Additional Sales Tax Rules, 1975 were passed and a tax of Rs. 20,765.00 and penalty of Rs. 5,000.00 totalling to Rs. 25,765.00 was imposed on the petitioner. The petitioner then filed the First Appeal before the learned Assistant Commissioner of Sales Tax. The First Appellate Authority by an order dated 27.9.1991 confirmed the levy of tax under the OST Act, but reduced the penalty to Rs. 1250.00. Thereupon, the petitioner filed the Second Appeal before the Orissa Sales Tax Tribunal, Cuttack. The said Tribunal heard the Second Appeal and in course of hearing, the petitioner raised various contentions. Ultimately, the Tribunal upheld the levy of tax but deleted the penalty.',
	(int) 8 => '<p>6. Thereafter the petitioner came up with a reference application under Section 24(1) of the Orissa Sales Tax Act framing certain questions for being referred to the Hon'ble High Court. The said prayer of the petitioner was rejected by the Tribunal. Then the petitioner moved Hon'ble High Court under Section 24(2)(b) of the Orissa Sales Tax Act, 1947 whereupon the High Court directed the Tribunal to state to case and refer the questions under Section 24(3) of the OST Act for a decision of the High Court.',
	(int) 9 => '<p>7. Accordingly, the Tribunal stated the case and referred the aforesaid questions for a decision of the High Court.',
	(int) 10 => '<p>8. Learned Counsel for the petitioner before the High Court submitted that in the transaction in question, there is no contract of sale between the petitioner and the client. It is only a contract of service and the photographs, which the petitioner produced by supplying the same has no commercial value and are not marketable. So, there is no question of a works contract. It is the consistent stand of the petitioner that the present photographs which are produced by the petitioner have no utility or value to any other person than the customer. By developing such photographs, the petitioner only renders service to his customers. The customer pays for the service rendered by the petitioner. It is the contention of the petitioner that his activity is similar to that of consulting firm preparing plan and sketches pursuant to client's specification or professional giving opinion on papers. All those activities are done to serve the client. Therefore, this does not come within the purview of the definition of 'goods', 'sale', 'dealer' or 'works contract'. It is the petitioner's case that he purchased the goods, namely, papers on payment of sales tax. Further levy of tax on the personal service rendered to the client of the petitioner will amount to double taxation. It is also the contention of the petitioner that the paper which is used in the photography are incidental and insignificant.',
	(int) 11 => '<p>9. In support of its contention, learned Counsel for the petitioner has relied on several judgments. First reliance was place on the judgment of the Supreme Court in the case of Sales Tax Officer v. B.C. Kame reported in 39 STC 237(SC). At page 241 of the report, learned Judges of the Supreme Court held that a photographer takes the photograph and develops the negatives and does other photographic work and thereafter supplies the prints to his client. By doing so he cannot be said to enter into a contract for sale of goods. On the other hand, the contract is for use of skill and labour by the photographer to bring about the desired result. Learned Judges held that the job of a photographer is a contract for work and labour and it is not a contract of sale.',
	(int) 12 => '<p>10. Reliance was also placed on a judgment of this High Court in the case of Photo Emporium v. Addl. District Magistrate reported in 77 STC 199 in which this High Court followed the ratio of the judgment of the Supreme Court in the case of B.C. Kame. In that case, the stand of the Revenue was disapproved by the Orissa High Court.',
	(int) 13 => '<p>11. Similar view was taken in 110 STC 145 in the case of Foto Colour Labs Pvt. Ltd. v. Commercial Taxes Officer where the Tribunal held that the transfer of paper in the photograph is purely incidental and payment is only taken to give positive prints and not to get the photo papers. Therefore, the contract in between the petitioner and his client is not a contract of sale, and neither directly or indirectly works contract is involved in the supply of photo papers. Similar view was taken by the West Bengal Taxation Tribunal in the case of Studio Kamalalaya v. Commercial Tax Officer reported in 89 STC 307.',
	(int) 14 => '<p>12. In the case of Bavens v. Onion of India report in 97 STC 161, learned Judges held that when a photographer takes a photograph of his customer, he develops the negative and supplies positive prints in the desired size to the customer. In doing so the photographer uses his own camera and his own film. The negative belongs to the photographer and not to the customer. No basic goods are provided by the customer which are subjected to processing by the photographer so as to make the contract a works contract. There is no accretion to goods or property or the nucleus of a property which belongs to the customer. It is the skill of the photographer which is most important to get the desired result.',
	(int) 15 => '<p>13. Hon'ble Karnataka High Court followed the same principle in the case of Keshoram Surlndranath Photo-mag Pvt. Ltd. v. Assistant Commissioner of Commercial Taxes reported in 121 STC 175. In that judgment, learned Judges of the Karnataka High Court relied on the judgment of the Supreme Court in B.C. Kame's case and came to the conclusion that in the job of the photographer in supplying positive prints to his customer, no works contract is involved and photographs are not marketable or saleable commodity and as such no tax can be levied on it.',
	(int) 16 => '<p>14. Against the said judgment of the Karnataka High Court, the State of Karnataka High Court filed a S.L.P. before the Hon'ble Supreme Court bearing SLP Nos. 6136-6163 of 2000 and the Hon'ble Supreme Court dismissed the SLP on 20th April, 2000.',
	(int) 17 => '<p>15. In the case of Rainbow Colour Lab v. State of M.P. learned Judges of the Hon'ble Supreme Court reiterated its judgment in B.C. Kame's case and came to the following conclusion:',
	(int) 18 => '<p>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.',
	(int) 19 => '<p>Hon'ble Supreme Court in Bharat Sanchar Nigam Ltd. v. Union of India reported in 145 STC 91 again reiterated the principle in B.C. Kame's case and held that the work done by the photographer is only in the nature of a service contract not involving any sale of goods and held that the stand taken by the State cannot be sustained.',
	(int) 20 => '<p>16. Learned Counsel for the petitioner submitted that the photographs taken by the petitioner are not goods which can be sold and is not a marketable commodity like any other goods. When the copies of photographs are made out, they have no utility or value to any other person than the customer. It is already admitted that the papers utilized for photographs are tax paid goods. Therefore, it is contended by the learned Counsel for the petitioner that the work of photography does not come within the purview of works contract as defined in Section 2(jj) of the Orissa Sales Tax Act.',
	(int) 21 => '<p>17. Learned Counsel for the Revenue in this case virtually did not contest the submission made by the learned Counsel for the petitioner and in support of his contention, learned Counsel for the Revenue relied on a decision of the Supreme Court in the case of Imagic Creative Pvt. Ltd. v. Commissioner of Commercial Taxes and Ors. reported in (2008) 10 RC 236. In that judgment, learned Judges held that since the contract in question is a service contract, it is difficult to hold that in a case of this nature, sales tax would be payable on the value of the entire contract irrespective of the element of service provided.',
	(int) 22 => '<p>For the reasons discussed above, we answer the first question in the negative and the second question, in the affirmative. We thus answer both the questions in favour of the assessee and against the Revenue.',
	(int) 23 => '<p>The three revision applications are thus disposed of.',
	(int) 24 => '<p>No costs.',
	(int) 25 => '<p>B.N. Mahapatra, J.',
	(int) 26 => '<p>18. I agree.<p>',
	(int) 27 => '<p>'
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1. Initially three S.J.Cs. being S.J.C. Nos. 10 of 1997, 8 of 1997 and 9 of 1997 were filed and subsequently renumbered as STREV Nos. 212, 214 and 216 of 2007 respectively. In view of the common questions of facts and law, all the three Revision Applications are heard and disposed of together.

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	'title_for_layout' => 'Studio Sujata Vs Commissioner of Sales Tax - Citation 531271 - Court Judgment | ',
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		'Judgement' => array(
			'id' => '531271',
			'acts' => '',
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			'appellant' => 'Studio Sujata',
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			'casename' => 'Studio Sujata Vs. Commissioner of Sales Tax',
			'casenote' => 'Sales Tax - Assessment - Contract of Sale - Section 12 (5) of Orissa Sales Tax 1947 - Petitioner carries on business of processing and developing photography - Revenue assessed petitioner under Section 12(5) of Act on ground that activities of petitioner can be called works contract - Petitioner approached to Assistant of Sales Tax on ground that there is no contract of sale between the petitioner and the client, it is only service - Dismissed and affirmed by Tribunal - Hence present petition - Whether Tribunal is right to held that tax is exigible for photographs as execution of works contract or not? - Held, as per precedent laid down by Supreme Court in case of Sales Tax Officer v. B.C. Kame that photographer takes photograph and develops negatives and does other photographic work and thereafter supplies prints to his client - By doing so he cannot be said to enter into contract for sale of goods - Therefore, job of photographer is contract for work and labour and it is not contract of sale - Revenue committed mistake in assessing petitioner under Section 12(5) of Act on basis of contract of sale - Petition disposed of accordingly  - STATE FINANCIAL CORPORATIONS ACT, 1951 [63/1951]. Section 29; [P.K. Tripathy, A.K. Parichha & N.Prusty, JJ] Discharge of loan  Orissa Forest Act (14 of 1972), Section 56  Confiscation of vehicle - Held, The Authorities under Section 56 of the Orissa Forest Act, 1972 are not obliged to release the vehicle from the confiscation proceeding or to pay the sale proceeds of the vehicle after the order of confiscation in favour of Orissa State Financial Corporation when such vehicles were purchased on being financed by the Orissa State Financial Corporation and the loan had not been liquidated by the date of the seizure/confiscation of the vehicle. Concept of first charge or second charge has no applicability when the vehicle is not otherwise disposed of to determine the liabilities of the loanee. On the other hand the vehicle having been found indulged in forest offences was made subject matter of a confiscation proceedings, and therefore, the procedure followed for confiscation of the vehicle and for its sale is punitive in nature and not with a view to give benefit to anybody including the Department which initiated the confiscation proceeding. Apart from that, the claim of the Orissa State Financial Corporation as against its loanee (who had taken the vehicle on hire- purchase agreement) brings the loanee and the sureties within the default clause under the State Financial Corporation Act, 1951 or the heirs and successors of such persons. Procedure is provided in the Act, 1951 and the Rules thereof about the manner in which such loan is to be recovered, and in that context only the vehicle under the hire-purchase agreement is placed as the first charge. If such property is not available for any reason, then the loan is not automatically waived or the loanee and his sureties are not automatically redeemed of the liabilities to repay. The Financial Corporation is concerned with repayment of loan either from the property or persons offered as surety. Thus, a vehicle, which is subject matter of confiscation proceeding under the Act, 1872, being not available to the Orissa State Financial Corporation for adjustment of the unpaid loan, that does not at all bring out an anomalous situation so as to defeat the right of the Orissa State Financial Corporation. Agreement between the Orissa State Financial Corporation and the loanee is a pure and simple contract governed by the provisions of the Contract Act, 1872 read with the provisions in the Act, 1951 and its Rules. On the other hand, a confiscation proceeding under the Act, 1972 is punitive in nature for commission of a forest offence. Thus, by virtue of the provision in Section 56 read with Section 64 (2) of the Act, 1972, the action taken for confiscation of the vehicle cannot be extended to grant protection of the loan advanced by Orissa State Financial Corporation. By doing that it amounts to grant premium to the pick-pockets in as much as, by making payment of the confiscation amount in favour of the Orissa State Financial Corporation the loan burden of the accused of the forest offence is reduced to the extent of the sale proceeds of the vehicle. In other words, on payment of the sale proceeds of the confiscation proceeding to the Orissa State Financial Corporation towards discharge of the loan account of the accused of a forest offence, it would lead to a system to reward him by repayment of his loan. Then it does not become a penalty nor the action become punitive, but it remains as a reward to the accused of forest offence. Such a concept is totally not conceivable from any provision in the Act, 1972 or the Act, 1951. [AIR 2002 Orissa 130 Overruled]. -- STATE FINANCIAL CORPORATIONS ACT, 1951. 
Section 29; Discharge of loan  Orissa Forest Act (14 of 1972), Section 56  Confiscation of vehicle - Held, The Authorities under Section 56 of the Orissa Forest Act, 1972 are not obliged to release the vehicle from the confiscation proceeding or to pay the sale proceeds of the vehicle after the order of confiscation in favour of Orissa State Financial Corporation when such vehicles were purchased on being financed by the Orissa State Financial Corporation and the loan had not been liquidated by the date of the seizure/confiscation of the vehicle. Concept of first charge or second charge has no applicability when the vehicle is not otherwise disposed of to determine the liabilities of the loanee. On the other hand the vehicle having been found indulged in forest offences was made subject matter of a confiscation proceedings, and therefore, the procedure followed for confiscation of the vehicle and for its sale is punitive in nature and not with a view to give benefit to anybody including the Department which initiated the confiscation proceeding. Apart from that, the claim of the Orissa State Financial Corporation as against its loanee (who had taken the vehicle on hire- purchase agreement) brings the loanee and the sureties within the default clause under the State Financial Corporation Act, 1951 or the heirs and successors of such persons. Procedure is provided in the Act, 1951 and the Rules thereof about the manner in which such loan is to be recovered, and in that context only the vehicle under the hire-purchase agreement is placed as the first charge. If such property is not available for any reason, then the loan is not automatically waived or the loanee and his sureties are not automatically redeemed of the liabilities to repay. The Financial Corporation is concerned with repayment of loan either from the property or persons offered as surety. Thus, a vehicle, which is subject matter of confiscation proceeding under the Act, 1872, being not available to the Orissa State Financial Corporation for adjustment of the unpaid loan, that does not at all bring out an anomalous situation so as to defeat the right of the Orissa State Financial Corporation. Agreement between the Orissa State Financial Corporation and the loanee is a pure and simple contract governed by the provisions of the Contract Act, 1872 read with the provisions in the Act, 1951 and its Rules. On the other hand, a confiscation proceeding under the Act, 1972 is punitive in nature for commission of a forest offence. Thus, by virtue of the provision in Section 56 read with Section 64 (2) of the Act, 1972, the action taken for confiscation of the vehicle cannot be extended to grant protection of the loan advanced by Orissa State Financial Corporation. By doing that it amounts to grant premium to the pick-pockets in as much as, by making payment of the confiscation amount in favour of the Orissa State Financial Corporation the loan burden of the accused of the forest offence is reduced to the extent of the sale proceeds of the vehicle. In other words, on payment of the sale proceeds of the confiscation proceeding to the Orissa State Financial Corporation towards discharge of the loan account of the accused of a forest offence, it would lead to a system to reward him by repayment of his loan. Then it does not become a penalty nor the action become punitive, but it remains as a reward to the accused of forest offence. Such a concept is totally not conceivable from any provision in the Act, 1972 or the Act, 1951. [AIR 2002 Orissa 130 Overruled].  -  In that case, the stand of the Revenue was disapproved by the Orissa High Court. 16. Learned Counsel for the petitioner submitted that the photographs taken by the petitioner are not goods which can be sold and is not a marketable commodity like any other goods.',
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			'judge' => ' A.K. Ganguly, C.J. and; B.N. Mahapatra, J.',
			'judgement' => '<p style="text-align: justify;">A.K. Ganguly, C.J.</p><p style="text-align: justify;">1. Initially three S.J.Cs. being S.J.C. Nos. 10 of 1997, 8 of 1997 and 9 of 1997 were filed and subsequently renumbered as STREV Nos. 212, 214 and 216 of 2007 respectively. In view of the common questions of facts and law, all the three Revision Applications are heard and disposed of together.</p><p style="text-align: justify;">2. The following questions of law arising out of the order passed by the Orissa Sales Tax Tribunal on 8.12.1993 in Second Appeal Nos. 3345 to 3350 of 1991-92 have been referred to this Hon'ble High Court in terms of the order of this Hon'ble Court dated 24.2.1997. The questions are:</p><p style="text-align: justify;">(i) Whether on the facts and in the circumstances of the case, the Tribunal is right to held that tax is exigible for photographs as execution of works contract ?</p><p style="text-align: justify;">(ii) Whether on the facts and in the circumstances of the case, the conclusion of the Tribunal is perverse due to non-consideration and mis-consideration of facts and law and, therefore, it is liable to be set aside for re-hearing ?</p><p style="text-align: justify;">3. The materials facts out of which those questions arise are that the petitioner carries on the business of processing and developing photography. In the usual course of business, the petitioner takes photographs of persons or of family and then develops the negative by employing his skill and labour and then supplies the photographs to the clients. These photographs which are prepared by the petitioner are not commercial items because they are neither purchased nor sold. However, to develop these photographs employment of skill and labour is essential. It may be mentioned that petitioner does not carry on any sale of photographs of national leaders, God and Goddess.</p><p style="text-align: justify;">4. After the passing of 46th amendment of the Constitution of India and consequent amendments thereto in Orissa Sales Tax Act (OST Act), the Sales Tax Officer, Bhubaneswar-II Circle, Bhubaneswar sent notices to assess the petitioner as an unregistered dealer under Section 12 (5) of the OST Act, inter alia, contending that the petitioner's activities can be called 'works contract'. Pursuant to said notice, the petitioner gave its reply and appeared before the Sales Tax Officer and produced the books of account and documents including Receipts, Purchase Memos, Vouchers, Ledger and thereby denied its liability under the OST Act. The petitioner also submitted objection petitions on various dates i.e. 28.12.1985, 10.1.1986, 20.2.1986 and 29.2.1988 contending, inter alia, that the petitioner has no sales tax liability under OST Act and the notices, which were issued, are without jurisdiction.</p><p style="text-align: justify;">5. Ignoring the said objections of the petitioner, the Sales Tax Officer, Bhubaneswar-II Circle, Bhubaneswar assessed the petitioner as an unregistered dealer, inter alia, holding that the petitioner is liable to pay sales tax as petitioner has been alleged to carry activities of 'works contract'. Therefore, orders of assessment being dated 29.2.1988 for the years 1984-85 (9/84 to 3/85), 1985-86 and 1986- 87 under Section 12(5) of OST Act and under Rule 5 of the Orissa Additional Sales Tax Rules, 1975 were passed and a tax of Rs. 20,765.00 and penalty of Rs. 5,000.00 totalling to Rs. 25,765.00 was imposed on the petitioner. The petitioner then filed the First Appeal before the learned Assistant Commissioner of Sales Tax. The First Appellate Authority by an order dated 27.9.1991 confirmed the levy of tax under the OST Act, but reduced the penalty to Rs. 1250.00. Thereupon, the petitioner filed the Second Appeal before the Orissa Sales Tax Tribunal, Cuttack. The said Tribunal heard the Second Appeal and in course of hearing, the petitioner raised various contentions. Ultimately, the Tribunal upheld the levy of tax but deleted the penalty.</p><p style="text-align: justify;">6. Thereafter the petitioner came up with a reference application under Section 24(1) of the Orissa Sales Tax Act framing certain questions for being referred to the Hon'ble High Court. The said prayer of the petitioner was rejected by the Tribunal. Then the petitioner moved Hon'ble High Court under Section 24(2)(b) of the Orissa Sales Tax Act, 1947 whereupon the High Court directed the Tribunal to state to case and refer the questions under Section 24(3) of the OST Act for a decision of the High Court.</p><p style="text-align: justify;">7. Accordingly, the Tribunal stated the case and referred the aforesaid questions for a decision of the High Court.</p><p style="text-align: justify;">8. Learned Counsel for the petitioner before the High Court submitted that in the transaction in question, there is no contract of sale between the petitioner and the client. It is only a contract of service and the photographs, which the petitioner produced by supplying the same has no commercial value and are not marketable. So, there is no question of a works contract. It is the consistent stand of the petitioner that the present photographs which are produced by the petitioner have no utility or value to any other person than the customer. By developing such photographs, the petitioner only renders service to his customers. The customer pays for the service rendered by the petitioner. It is the contention of the petitioner that his activity is similar to that of consulting firm preparing plan and sketches pursuant to client's specification or professional giving opinion on papers. All those activities are done to serve the client. Therefore, this does not come within the purview of the definition of 'goods', 'sale', 'dealer' or 'works contract'. It is the petitioner's case that he purchased the goods, namely, papers on payment of sales tax. Further levy of tax on the personal service rendered to the client of the petitioner will amount to double taxation. It is also the contention of the petitioner that the paper which is used in the photography are incidental and insignificant.</p><p style="text-align: justify;">9. In support of its contention, learned Counsel for the petitioner has relied on several judgments. First reliance was place on the judgment of the Supreme Court in the case of Sales Tax Officer v. B.C. Kame reported in 39 STC 237(SC). At page 241 of the report, learned Judges of the Supreme Court held that a photographer takes the photograph and develops the negatives and does other photographic work and thereafter supplies the prints to his client. By doing so he cannot be said to enter into a contract for sale of goods. On the other hand, the contract is for use of skill and labour by the photographer to bring about the desired result. Learned Judges held that the job of a photographer is a contract for work and labour and it is not a contract of sale.</p><p style="text-align: justify;">10. Reliance was also placed on a judgment of this High Court in the case of Photo Emporium v. Addl. District Magistrate reported in 77 STC 199 in which this High Court followed the ratio of the judgment of the Supreme Court in the case of B.C. Kame. In that case, the stand of the Revenue was disapproved by the Orissa High Court.</p><p style="text-align: justify;">11. Similar view was taken in 110 STC 145 in the case of Foto Colour Labs Pvt. Ltd. v. Commercial Taxes Officer where the Tribunal held that the transfer of paper in the photograph is purely incidental and payment is only taken to give positive prints and not to get the photo papers. Therefore, the contract in between the petitioner and his client is not a contract of sale, and neither directly or indirectly works contract is involved in the supply of photo papers. Similar view was taken by the West Bengal Taxation Tribunal in the case of Studio Kamalalaya v. Commercial Tax Officer reported in 89 STC 307.</p><p style="text-align: justify;">12. In the case of Bavens v. Onion of India report in 97 STC 161, learned Judges held that when a photographer takes a photograph of his customer, he develops the negative and supplies positive prints in the desired size to the customer. In doing so the photographer uses his own camera and his own film. The negative belongs to the photographer and not to the customer. No basic goods are provided by the customer which are subjected to processing by the photographer so as to make the contract a works contract. There is no accretion to goods or property or the nucleus of a property which belongs to the customer. It is the skill of the photographer which is most important to get the desired result.</p><p style="text-align: justify;">13. Hon'ble Karnataka High Court followed the same principle in the case of Keshoram Surlndranath Photo-mag Pvt. Ltd. v. Assistant Commissioner of Commercial Taxes reported in 121 STC 175. In that judgment, learned Judges of the Karnataka High Court relied on the judgment of the Supreme Court in B.C. Kame's case and came to the conclusion that in the job of the photographer in supplying positive prints to his customer, no works contract is involved and photographs are not marketable or saleable commodity and as such no tax can be levied on it.</p><p style="text-align: justify;">14. Against the said judgment of the Karnataka High Court, the State of Karnataka High Court filed a S.L.P. before the Hon'ble Supreme Court bearing SLP Nos. 6136-6163 of 2000 and the Hon'ble Supreme Court dismissed the SLP on 20th April, 2000.</p><p style="text-align: justify;">15. In the case of Rainbow Colour Lab v. State of M.P. learned Judges of the Hon'ble Supreme Court reiterated its judgment in B.C. Kame's case and came to the following conclusion:</p><p style="text-align: justify;">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.</p><p style="text-align: justify;">Hon'ble Supreme Court in Bharat Sanchar Nigam Ltd. v. Union of India reported in 145 STC 91 again reiterated the principle in B.C. Kame's case and held that the work done by the photographer is only in the nature of a service contract not involving any sale of goods and held that the stand taken by the State cannot be sustained.</p><p style="text-align: justify;">16. Learned Counsel for the petitioner submitted that the photographs taken by the petitioner are not goods which can be sold and is not a marketable commodity like any other goods. When the copies of photographs are made out, they have no utility or value to any other person than the customer. It is already admitted that the papers utilized for photographs are tax paid goods. Therefore, it is contended by the learned Counsel for the petitioner that the work of photography does not come within the purview of works contract as defined in Section 2(jj) of the Orissa Sales Tax Act.</p><p style="text-align: justify;">17. Learned Counsel for the Revenue in this case virtually did not contest the submission made by the learned Counsel for the petitioner and in support of his contention, learned Counsel for the Revenue relied on a decision of the Supreme Court in the case of Imagic Creative Pvt. Ltd. v. Commissioner of Commercial Taxes and Ors. reported in (2008) 10 RC 236. In that judgment, learned Judges held that since the contract in question is a service contract, it is difficult to hold that in a case of this nature, sales tax would be payable on the value of the entire contract irrespective of the element of service provided.</p><p style="text-align: justify;">For the reasons discussed above, we answer the first question in the negative and the second question, in the affirmative. We thus answer both the questions in favour of the assessee and against the Revenue.</p><p style="text-align: justify;">The three revision applications are thus disposed of.</p><p style="text-align: justify;">No costs.</p><p style="text-align: justify;">B.N. Mahapatra, J.</p><p style="text-align: justify;">18. I agree.<p style="text-align: justify;"></p><p style="text-align: justify;">',
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$title_for_layout = 'Studio Sujata Vs Commissioner of Sales Tax - Citation 531271 - Court Judgment | '
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	'Judgement' => array(
		'id' => '531271',
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		'appellant' => 'Studio Sujata',
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		'casename' => 'Studio Sujata Vs. Commissioner of Sales Tax',
		'casenote' => 'Sales Tax - Assessment - Contract of Sale - Section 12 (5) of Orissa Sales Tax 1947 - Petitioner carries on business of processing and developing photography - Revenue assessed petitioner under Section 12(5) of Act on ground that activities of petitioner can be called works contract - Petitioner approached to Assistant of Sales Tax on ground that there is no contract of sale between the petitioner and the client, it is only service - Dismissed and affirmed by Tribunal - Hence present petition - Whether Tribunal is right to held that tax is exigible for photographs as execution of works contract or not? - Held, as per precedent laid down by Supreme Court in case of Sales Tax Officer v. B.C. Kame that photographer takes photograph and develops negatives and does other photographic work and thereafter supplies prints to his client - By doing so he cannot be said to enter into contract for sale of goods - Therefore, job of photographer is contract for work and labour and it is not contract of sale - Revenue committed mistake in assessing petitioner under Section 12(5) of Act on basis of contract of sale - Petition disposed of accordingly  - STATE FINANCIAL CORPORATIONS ACT, 1951 [63/1951]. Section 29; [P.K. Tripathy, A.K. Parichha & N.Prusty, JJ] Discharge of loan  Orissa Forest Act (14 of 1972), Section 56  Confiscation of vehicle - Held, The Authorities under Section 56 of the Orissa Forest Act, 1972 are not obliged to release the vehicle from the confiscation proceeding or to pay the sale proceeds of the vehicle after the order of confiscation in favour of Orissa State Financial Corporation when such vehicles were purchased on being financed by the Orissa State Financial Corporation and the loan had not been liquidated by the date of the seizure/confiscation of the vehicle. Concept of first charge or second charge has no applicability when the vehicle is not otherwise disposed of to determine the liabilities of the loanee. On the other hand the vehicle having been found indulged in forest offences was made subject matter of a confiscation proceedings, and therefore, the procedure followed for confiscation of the vehicle and for its sale is punitive in nature and not with a view to give benefit to anybody including the Department which initiated the confiscation proceeding. Apart from that, the claim of the Orissa State Financial Corporation as against its loanee (who had taken the vehicle on hire- purchase agreement) brings the loanee and the sureties within the default clause under the State Financial Corporation Act, 1951 or the heirs and successors of such persons. Procedure is provided in the Act, 1951 and the Rules thereof about the manner in which such loan is to be recovered, and in that context only the vehicle under the hire-purchase agreement is placed as the first charge. If such property is not available for any reason, then the loan is not automatically waived or the loanee and his sureties are not automatically redeemed of the liabilities to repay. The Financial Corporation is concerned with repayment of loan either from the property or persons offered as surety. Thus, a vehicle, which is subject matter of confiscation proceeding under the Act, 1872, being not available to the Orissa State Financial Corporation for adjustment of the unpaid loan, that does not at all bring out an anomalous situation so as to defeat the right of the Orissa State Financial Corporation. Agreement between the Orissa State Financial Corporation and the loanee is a pure and simple contract governed by the provisions of the Contract Act, 1872 read with the provisions in the Act, 1951 and its Rules. On the other hand, a confiscation proceeding under the Act, 1972 is punitive in nature for commission of a forest offence. Thus, by virtue of the provision in Section 56 read with Section 64 (2) of the Act, 1972, the action taken for confiscation of the vehicle cannot be extended to grant protection of the loan advanced by Orissa State Financial Corporation. By doing that it amounts to grant premium to the pick-pockets in as much as, by making payment of the confiscation amount in favour of the Orissa State Financial Corporation the loan burden of the accused of the forest offence is reduced to the extent of the sale proceeds of the vehicle. In other words, on payment of the sale proceeds of the confiscation proceeding to the Orissa State Financial Corporation towards discharge of the loan account of the accused of a forest offence, it would lead to a system to reward him by repayment of his loan. Then it does not become a penalty nor the action become punitive, but it remains as a reward to the accused of forest offence. Such a concept is totally not conceivable from any provision in the Act, 1972 or the Act, 1951. [AIR 2002 Orissa 130 Overruled]. -- STATE FINANCIAL CORPORATIONS ACT, 1951. 
Section 29; Discharge of loan  Orissa Forest Act (14 of 1972), Section 56  Confiscation of vehicle - Held, The Authorities under Section 56 of the Orissa Forest Act, 1972 are not obliged to release the vehicle from the confiscation proceeding or to pay the sale proceeds of the vehicle after the order of confiscation in favour of Orissa State Financial Corporation when such vehicles were purchased on being financed by the Orissa State Financial Corporation and the loan had not been liquidated by the date of the seizure/confiscation of the vehicle. Concept of first charge or second charge has no applicability when the vehicle is not otherwise disposed of to determine the liabilities of the loanee. On the other hand the vehicle having been found indulged in forest offences was made subject matter of a confiscation proceedings, and therefore, the procedure followed for confiscation of the vehicle and for its sale is punitive in nature and not with a view to give benefit to anybody including the Department which initiated the confiscation proceeding. Apart from that, the claim of the Orissa State Financial Corporation as against its loanee (who had taken the vehicle on hire- purchase agreement) brings the loanee and the sureties within the default clause under the State Financial Corporation Act, 1951 or the heirs and successors of such persons. Procedure is provided in the Act, 1951 and the Rules thereof about the manner in which such loan is to be recovered, and in that context only the vehicle under the hire-purchase agreement is placed as the first charge. If such property is not available for any reason, then the loan is not automatically waived or the loanee and his sureties are not automatically redeemed of the liabilities to repay. The Financial Corporation is concerned with repayment of loan either from the property or persons offered as surety. Thus, a vehicle, which is subject matter of confiscation proceeding under the Act, 1872, being not available to the Orissa State Financial Corporation for adjustment of the unpaid loan, that does not at all bring out an anomalous situation so as to defeat the right of the Orissa State Financial Corporation. Agreement between the Orissa State Financial Corporation and the loanee is a pure and simple contract governed by the provisions of the Contract Act, 1872 read with the provisions in the Act, 1951 and its Rules. On the other hand, a confiscation proceeding under the Act, 1972 is punitive in nature for commission of a forest offence. Thus, by virtue of the provision in Section 56 read with Section 64 (2) of the Act, 1972, the action taken for confiscation of the vehicle cannot be extended to grant protection of the loan advanced by Orissa State Financial Corporation. By doing that it amounts to grant premium to the pick-pockets in as much as, by making payment of the confiscation amount in favour of the Orissa State Financial Corporation the loan burden of the accused of the forest offence is reduced to the extent of the sale proceeds of the vehicle. In other words, on payment of the sale proceeds of the confiscation proceeding to the Orissa State Financial Corporation towards discharge of the loan account of the accused of a forest offence, it would lead to a system to reward him by repayment of his loan. Then it does not become a penalty nor the action become punitive, but it remains as a reward to the accused of forest offence. Such a concept is totally not conceivable from any provision in the Act, 1972 or the Act, 1951. [AIR 2002 Orissa 130 Overruled].  -  In that case, the stand of the Revenue was disapproved by the Orissa High Court. 16. Learned Counsel for the petitioner submitted that the photographs taken by the petitioner are not goods which can be sold and is not a marketable commodity like any other goods.',
		'caseanalysis' => null,
		'casesref' => 'Imagic Creative Pvt. Ltd. v. Commissioner of Commercial Taxes and Ors.;',
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		'court' => 'Orissa',
		'court_type' => 'HC',
		'decidedon' => '2008-04-02',
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		'judge' => ' A.K. Ganguly, C.J. and; B.N. Mahapatra, J.',
		'judgement' => '<p>A.K. Ganguly, C.J.</p><p>1. Initially three S.J.Cs. being S.J.C. Nos. 10 of 1997, 8 of 1997 and 9 of 1997 were filed and subsequently renumbered as STREV Nos. 212, 214 and 216 of 2007 respectively. In view of the common questions of facts and law, all the three Revision Applications are heard and disposed of together.</p><p>2. The following questions of law arising out of the order passed by the Orissa Sales Tax Tribunal on 8.12.1993 in Second Appeal Nos. 3345 to 3350 of 1991-92 have been referred to this Hon'ble High Court in terms of the order of this Hon'ble Court dated 24.2.1997. The questions are:</p><p>(i) Whether on the facts and in the circumstances of the case, the Tribunal is right to held that tax is exigible for photographs as execution of works contract ?</p><p>(ii) Whether on the facts and in the circumstances of the case, the conclusion of the Tribunal is perverse due to non-consideration and mis-consideration of facts and law and, therefore, it is liable to be set aside for re-hearing ?</p><p>3. The materials facts out of which those questions arise are that the petitioner carries on the business of processing and developing photography. In the usual course of business, the petitioner takes photographs of persons or of family and then develops the negative by employing his skill and labour and then supplies the photographs to the clients. These photographs which are prepared by the petitioner are not commercial items because they are neither purchased nor sold. However, to develop these photographs employment of skill and labour is essential. It may be mentioned that petitioner does not carry on any sale of photographs of national leaders, God and Goddess.</p><p>4. After the passing of 46th amendment of the Constitution of India and consequent amendments thereto in Orissa Sales Tax Act (OST Act), the Sales Tax Officer, Bhubaneswar-II Circle, Bhubaneswar sent notices to assess the petitioner as an unregistered dealer under Section 12 (5) of the OST Act, inter alia, contending that the petitioner's activities can be called 'works contract'. Pursuant to said notice, the petitioner gave its reply and appeared before the Sales Tax Officer and produced the books of account and documents including Receipts, Purchase Memos, Vouchers, Ledger and thereby denied its liability under the OST Act. The petitioner also submitted objection petitions on various dates i.e. 28.12.1985, 10.1.1986, 20.2.1986 and 29.2.1988 contending, inter alia, that the petitioner has no sales tax liability under OST Act and the notices, which were issued, are without jurisdiction.</p><p>5. Ignoring the said objections of the petitioner, the Sales Tax Officer, Bhubaneswar-II Circle, Bhubaneswar assessed the petitioner as an unregistered dealer, inter alia, holding that the petitioner is liable to pay sales tax as petitioner has been alleged to carry activities of 'works contract'. Therefore, orders of assessment being dated 29.2.1988 for the years 1984-85 (9/84 to 3/85), 1985-86 and 1986- 87 under Section 12(5) of OST Act and under Rule 5 of the Orissa Additional Sales Tax Rules, 1975 were passed and a tax of Rs. 20,765.00 and penalty of Rs. 5,000.00 totalling to Rs. 25,765.00 was imposed on the petitioner. The petitioner then filed the First Appeal before the learned Assistant Commissioner of Sales Tax. The First Appellate Authority by an order dated 27.9.1991 confirmed the levy of tax under the OST Act, but reduced the penalty to Rs. 1250.00. Thereupon, the petitioner filed the Second Appeal before the Orissa Sales Tax Tribunal, Cuttack. The said Tribunal heard the Second Appeal and in course of hearing, the petitioner raised various contentions. Ultimately, the Tribunal upheld the levy of tax but deleted the penalty.</p><p>6. Thereafter the petitioner came up with a reference application under Section 24(1) of the Orissa Sales Tax Act framing certain questions for being referred to the Hon'ble High Court. The said prayer of the petitioner was rejected by the Tribunal. Then the petitioner moved Hon'ble High Court under Section 24(2)(b) of the Orissa Sales Tax Act, 1947 whereupon the High Court directed the Tribunal to state to case and refer the questions under Section 24(3) of the OST Act for a decision of the High Court.</p><p>7. Accordingly, the Tribunal stated the case and referred the aforesaid questions for a decision of the High Court.</p><p>8. Learned Counsel for the petitioner before the High Court submitted that in the transaction in question, there is no contract of sale between the petitioner and the client. It is only a contract of service and the photographs, which the petitioner produced by supplying the same has no commercial value and are not marketable. So, there is no question of a works contract. It is the consistent stand of the petitioner that the present photographs which are produced by the petitioner have no utility or value to any other person than the customer. By developing such photographs, the petitioner only renders service to his customers. The customer pays for the service rendered by the petitioner. It is the contention of the petitioner that his activity is similar to that of consulting firm preparing plan and sketches pursuant to client's specification or professional giving opinion on papers. All those activities are done to serve the client. Therefore, this does not come within the purview of the definition of 'goods', 'sale', 'dealer' or 'works contract'. It is the petitioner's case that he purchased the goods, namely, papers on payment of sales tax. Further levy of tax on the personal service rendered to the client of the petitioner will amount to double taxation. It is also the contention of the petitioner that the paper which is used in the photography are incidental and insignificant.</p><p>9. In support of its contention, learned Counsel for the petitioner has relied on several judgments. First reliance was place on the judgment of the Supreme Court in the case of Sales Tax Officer v. B.C. Kame reported in 39 STC 237(SC). At page 241 of the report, learned Judges of the Supreme Court held that a photographer takes the photograph and develops the negatives and does other photographic work and thereafter supplies the prints to his client. By doing so he cannot be said to enter into a contract for sale of goods. On the other hand, the contract is for use of skill and labour by the photographer to bring about the desired result. Learned Judges held that the job of a photographer is a contract for work and labour and it is not a contract of sale.</p><p>10. Reliance was also placed on a judgment of this High Court in the case of Photo Emporium v. Addl. District Magistrate reported in 77 STC 199 in which this High Court followed the ratio of the judgment of the Supreme Court in the case of B.C. Kame. In that case, the stand of the Revenue was disapproved by the Orissa High Court.</p><p>11. Similar view was taken in 110 STC 145 in the case of Foto Colour Labs Pvt. Ltd. v. Commercial Taxes Officer where the Tribunal held that the transfer of paper in the photograph is purely incidental and payment is only taken to give positive prints and not to get the photo papers. Therefore, the contract in between the petitioner and his client is not a contract of sale, and neither directly or indirectly works contract is involved in the supply of photo papers. Similar view was taken by the West Bengal Taxation Tribunal in the case of Studio Kamalalaya v. Commercial Tax Officer reported in 89 STC 307.</p><p>12. In the case of Bavens v. Onion of India report in 97 STC 161, learned Judges held that when a photographer takes a photograph of his customer, he develops the negative and supplies positive prints in the desired size to the customer. In doing so the photographer uses his own camera and his own film. The negative belongs to the photographer and not to the customer. No basic goods are provided by the customer which are subjected to processing by the photographer so as to make the contract a works contract. There is no accretion to goods or property or the nucleus of a property which belongs to the customer. It is the skill of the photographer which is most important to get the desired result.</p><p>13. Hon'ble Karnataka High Court followed the same principle in the case of Keshoram Surlndranath Photo-mag Pvt. Ltd. v. Assistant Commissioner of Commercial Taxes reported in 121 STC 175. In that judgment, learned Judges of the Karnataka High Court relied on the judgment of the Supreme Court in B.C. Kame's case and came to the conclusion that in the job of the photographer in supplying positive prints to his customer, no works contract is involved and photographs are not marketable or saleable commodity and as such no tax can be levied on it.</p><p>14. Against the said judgment of the Karnataka High Court, the State of Karnataka High Court filed a S.L.P. before the Hon'ble Supreme Court bearing SLP Nos. 6136-6163 of 2000 and the Hon'ble Supreme Court dismissed the SLP on 20th April, 2000.</p><p>15. In the case of Rainbow Colour Lab v. State of M.P. learned Judges of the Hon'ble Supreme Court reiterated its judgment in B.C. Kame's case and came to the following conclusion:</p><p>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.</p><p>Hon'ble Supreme Court in Bharat Sanchar Nigam Ltd. v. Union of India reported in 145 STC 91 again reiterated the principle in B.C. Kame's case and held that the work done by the photographer is only in the nature of a service contract not involving any sale of goods and held that the stand taken by the State cannot be sustained.</p><p>16. Learned Counsel for the petitioner submitted that the photographs taken by the petitioner are not goods which can be sold and is not a marketable commodity like any other goods. When the copies of photographs are made out, they have no utility or value to any other person than the customer. It is already admitted that the papers utilized for photographs are tax paid goods. Therefore, it is contended by the learned Counsel for the petitioner that the work of photography does not come within the purview of works contract as defined in Section 2(jj) of the Orissa Sales Tax Act.</p><p>17. Learned Counsel for the Revenue in this case virtually did not contest the submission made by the learned Counsel for the petitioner and in support of his contention, learned Counsel for the Revenue relied on a decision of the Supreme Court in the case of Imagic Creative Pvt. Ltd. v. Commissioner of Commercial Taxes and Ors. reported in (2008) 10 RC 236. In that judgment, learned Judges held that since the contract in question is a service contract, it is difficult to hold that in a case of this nature, sales tax would be payable on the value of the entire contract irrespective of the element of service provided.</p><p>For the reasons discussed above, we answer the first question in the negative and the second question, in the affirmative. We thus answer both the questions in favour of the assessee and against the Revenue.</p><p>The three revision applications are thus disposed of.</p><p>No costs.</p><p>B.N. Mahapatra, J.</p><p>18. I agree.<p></p><p>',
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	(int) 0 => '<p>A.K. Ganguly, C.J.',
	(int) 1 => '<p>1. Initially three S.J.Cs. being S.J.C. Nos. 10 of 1997, 8 of 1997 and 9 of 1997 were filed and subsequently renumbered as STREV Nos. 212, 214 and 216 of 2007 respectively. In view of the common questions of facts and law, all the three Revision Applications are heard and disposed of together.',
	(int) 2 => '<p>2. The following questions of law arising out of the order passed by the Orissa Sales Tax Tribunal on 8.12.1993 in Second Appeal Nos. 3345 to 3350 of 1991-92 have been referred to this Hon'ble High Court in terms of the order of this Hon'ble Court dated 24.2.1997. The questions are:',
	(int) 3 => '<p>(i) Whether on the facts and in the circumstances of the case, the Tribunal is right to held that tax is exigible for photographs as execution of works contract ?',
	(int) 4 => '<p>(ii) Whether on the facts and in the circumstances of the case, the conclusion of the Tribunal is perverse due to non-consideration and mis-consideration of facts and law and, therefore, it is liable to be set aside for re-hearing ?',
	(int) 5 => '<p>3. The materials facts out of which those questions arise are that the petitioner carries on the business of processing and developing photography. In the usual course of business, the petitioner takes photographs of persons or of family and then develops the negative by employing his skill and labour and then supplies the photographs to the clients. These photographs which are prepared by the petitioner are not commercial items because they are neither purchased nor sold. However, to develop these photographs employment of skill and labour is essential. It may be mentioned that petitioner does not carry on any sale of photographs of national leaders, God and Goddess.',
	(int) 6 => '<p>4. After the passing of 46th amendment of the Constitution of India and consequent amendments thereto in Orissa Sales Tax Act (OST Act), the Sales Tax Officer, Bhubaneswar-II Circle, Bhubaneswar sent notices to assess the petitioner as an unregistered dealer under Section 12 (5) of the OST Act, inter alia, contending that the petitioner's activities can be called 'works contract'. Pursuant to said notice, the petitioner gave its reply and appeared before the Sales Tax Officer and produced the books of account and documents including Receipts, Purchase Memos, Vouchers, Ledger and thereby denied its liability under the OST Act. The petitioner also submitted objection petitions on various dates i.e. 28.12.1985, 10.1.1986, 20.2.1986 and 29.2.1988 contending, inter alia, that the petitioner has no sales tax liability under OST Act and the notices, which were issued, are without jurisdiction.',
	(int) 7 => '<p>5. Ignoring the said objections of the petitioner, the Sales Tax Officer, Bhubaneswar-II Circle, Bhubaneswar assessed the petitioner as an unregistered dealer, inter alia, holding that the petitioner is liable to pay sales tax as petitioner has been alleged to carry activities of 'works contract'. Therefore, orders of assessment being dated 29.2.1988 for the years 1984-85 (9/84 to 3/85), 1985-86 and 1986- 87 under Section 12(5) of OST Act and under Rule 5 of the Orissa Additional Sales Tax Rules, 1975 were passed and a tax of Rs. 20,765.00 and penalty of Rs. 5,000.00 totalling to Rs. 25,765.00 was imposed on the petitioner. The petitioner then filed the First Appeal before the learned Assistant Commissioner of Sales Tax. The First Appellate Authority by an order dated 27.9.1991 confirmed the levy of tax under the OST Act, but reduced the penalty to Rs. 1250.00. Thereupon, the petitioner filed the Second Appeal before the Orissa Sales Tax Tribunal, Cuttack. The said Tribunal heard the Second Appeal and in course of hearing, the petitioner raised various contentions. Ultimately, the Tribunal upheld the levy of tax but deleted the penalty.',
	(int) 8 => '<p>6. Thereafter the petitioner came up with a reference application under Section 24(1) of the Orissa Sales Tax Act framing certain questions for being referred to the Hon'ble High Court. The said prayer of the petitioner was rejected by the Tribunal. Then the petitioner moved Hon'ble High Court under Section 24(2)(b) of the Orissa Sales Tax Act, 1947 whereupon the High Court directed the Tribunal to state to case and refer the questions under Section 24(3) of the OST Act for a decision of the High Court.',
	(int) 9 => '<p>7. Accordingly, the Tribunal stated the case and referred the aforesaid questions for a decision of the High Court.',
	(int) 10 => '<p>8. Learned Counsel for the petitioner before the High Court submitted that in the transaction in question, there is no contract of sale between the petitioner and the client. It is only a contract of service and the photographs, which the petitioner produced by supplying the same has no commercial value and are not marketable. So, there is no question of a works contract. It is the consistent stand of the petitioner that the present photographs which are produced by the petitioner have no utility or value to any other person than the customer. By developing such photographs, the petitioner only renders service to his customers. The customer pays for the service rendered by the petitioner. It is the contention of the petitioner that his activity is similar to that of consulting firm preparing plan and sketches pursuant to client's specification or professional giving opinion on papers. All those activities are done to serve the client. Therefore, this does not come within the purview of the definition of 'goods', 'sale', 'dealer' or 'works contract'. It is the petitioner's case that he purchased the goods, namely, papers on payment of sales tax. Further levy of tax on the personal service rendered to the client of the petitioner will amount to double taxation. It is also the contention of the petitioner that the paper which is used in the photography are incidental and insignificant.',
	(int) 11 => '<p>9. In support of its contention, learned Counsel for the petitioner has relied on several judgments. First reliance was place on the judgment of the Supreme Court in the case of Sales Tax Officer v. B.C. Kame reported in 39 STC 237(SC). At page 241 of the report, learned Judges of the Supreme Court held that a photographer takes the photograph and develops the negatives and does other photographic work and thereafter supplies the prints to his client. By doing so he cannot be said to enter into a contract for sale of goods. On the other hand, the contract is for use of skill and labour by the photographer to bring about the desired result. Learned Judges held that the job of a photographer is a contract for work and labour and it is not a contract of sale.',
	(int) 12 => '<p>10. Reliance was also placed on a judgment of this High Court in the case of Photo Emporium v. Addl. District Magistrate reported in 77 STC 199 in which this High Court followed the ratio of the judgment of the Supreme Court in the case of B.C. Kame. In that case, the stand of the Revenue was disapproved by the Orissa High Court.',
	(int) 13 => '<p>11. Similar view was taken in 110 STC 145 in the case of Foto Colour Labs Pvt. Ltd. v. Commercial Taxes Officer where the Tribunal held that the transfer of paper in the photograph is purely incidental and payment is only taken to give positive prints and not to get the photo papers. Therefore, the contract in between the petitioner and his client is not a contract of sale, and neither directly or indirectly works contract is involved in the supply of photo papers. Similar view was taken by the West Bengal Taxation Tribunal in the case of Studio Kamalalaya v. Commercial Tax Officer reported in 89 STC 307.',
	(int) 14 => '<p>12. In the case of Bavens v. Onion of India report in 97 STC 161, learned Judges held that when a photographer takes a photograph of his customer, he develops the negative and supplies positive prints in the desired size to the customer. In doing so the photographer uses his own camera and his own film. The negative belongs to the photographer and not to the customer. No basic goods are provided by the customer which are subjected to processing by the photographer so as to make the contract a works contract. There is no accretion to goods or property or the nucleus of a property which belongs to the customer. It is the skill of the photographer which is most important to get the desired result.',
	(int) 15 => '<p>13. Hon'ble Karnataka High Court followed the same principle in the case of Keshoram Surlndranath Photo-mag Pvt. Ltd. v. Assistant Commissioner of Commercial Taxes reported in 121 STC 175. In that judgment, learned Judges of the Karnataka High Court relied on the judgment of the Supreme Court in B.C. Kame's case and came to the conclusion that in the job of the photographer in supplying positive prints to his customer, no works contract is involved and photographs are not marketable or saleable commodity and as such no tax can be levied on it.',
	(int) 16 => '<p>14. Against the said judgment of the Karnataka High Court, the State of Karnataka High Court filed a S.L.P. before the Hon'ble Supreme Court bearing SLP Nos. 6136-6163 of 2000 and the Hon'ble Supreme Court dismissed the SLP on 20th April, 2000.',
	(int) 17 => '<p>15. In the case of Rainbow Colour Lab v. State of M.P. learned Judges of the Hon'ble Supreme Court reiterated its judgment in B.C. Kame's case and came to the following conclusion:',
	(int) 18 => '<p>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.',
	(int) 19 => '<p>Hon'ble Supreme Court in Bharat Sanchar Nigam Ltd. v. Union of India reported in 145 STC 91 again reiterated the principle in B.C. Kame's case and held that the work done by the photographer is only in the nature of a service contract not involving any sale of goods and held that the stand taken by the State cannot be sustained.',
	(int) 20 => '<p>16. Learned Counsel for the petitioner submitted that the photographs taken by the petitioner are not goods which can be sold and is not a marketable commodity like any other goods. When the copies of photographs are made out, they have no utility or value to any other person than the customer. It is already admitted that the papers utilized for photographs are tax paid goods. Therefore, it is contended by the learned Counsel for the petitioner that the work of photography does not come within the purview of works contract as defined in Section 2(jj) of the Orissa Sales Tax Act.',
	(int) 21 => '<p>17. Learned Counsel for the Revenue in this case virtually did not contest the submission made by the learned Counsel for the petitioner and in support of his contention, learned Counsel for the Revenue relied on a decision of the Supreme Court in the case of Imagic Creative Pvt. Ltd. v. Commissioner of Commercial Taxes and Ors. reported in (2008) 10 RC 236. In that judgment, learned Judges held that since the contract in question is a service contract, it is difficult to hold that in a case of this nature, sales tax would be payable on the value of the entire contract irrespective of the element of service provided.',
	(int) 22 => '<p>For the reasons discussed above, we answer the first question in the negative and the second question, in the affirmative. We thus answer both the questions in favour of the assessee and against the Revenue.',
	(int) 23 => '<p>The three revision applications are thus disposed of.',
	(int) 24 => '<p>No costs.',
	(int) 25 => '<p>B.N. Mahapatra, J.',
	(int) 26 => '<p>18. I agree.<p>',
	(int) 27 => '<p>'
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2. The following questions of law arising out of the order passed by the Orissa Sales Tax Tribunal on 8.12.1993 in Second Appeal Nos. 3345 to 3350 of 1991-92 have been referred to this Hon'ble High Court in terms of the order of this Hon'ble Court dated 24.2.1997. The questions are:

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	'title_for_layout' => 'Studio Sujata Vs Commissioner of Sales Tax - Citation 531271 - Court Judgment | ',
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		'Judgement' => array(
			'id' => '531271',
			'acts' => '',
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			'appellant' => 'Studio Sujata',
			'authreffered' => '',
			'casename' => 'Studio Sujata Vs. Commissioner of Sales Tax',
			'casenote' => 'Sales Tax - Assessment - Contract of Sale - Section 12 (5) of Orissa Sales Tax 1947 - Petitioner carries on business of processing and developing photography - Revenue assessed petitioner under Section 12(5) of Act on ground that activities of petitioner can be called works contract - Petitioner approached to Assistant of Sales Tax on ground that there is no contract of sale between the petitioner and the client, it is only service - Dismissed and affirmed by Tribunal - Hence present petition - Whether Tribunal is right to held that tax is exigible for photographs as execution of works contract or not? - Held, as per precedent laid down by Supreme Court in case of Sales Tax Officer v. B.C. Kame that photographer takes photograph and develops negatives and does other photographic work and thereafter supplies prints to his client - By doing so he cannot be said to enter into contract for sale of goods - Therefore, job of photographer is contract for work and labour and it is not contract of sale - Revenue committed mistake in assessing petitioner under Section 12(5) of Act on basis of contract of sale - Petition disposed of accordingly  - STATE FINANCIAL CORPORATIONS ACT, 1951 [63/1951]. Section 29; [P.K. Tripathy, A.K. Parichha & N.Prusty, JJ] Discharge of loan  Orissa Forest Act (14 of 1972), Section 56  Confiscation of vehicle - Held, The Authorities under Section 56 of the Orissa Forest Act, 1972 are not obliged to release the vehicle from the confiscation proceeding or to pay the sale proceeds of the vehicle after the order of confiscation in favour of Orissa State Financial Corporation when such vehicles were purchased on being financed by the Orissa State Financial Corporation and the loan had not been liquidated by the date of the seizure/confiscation of the vehicle. Concept of first charge or second charge has no applicability when the vehicle is not otherwise disposed of to determine the liabilities of the loanee. On the other hand the vehicle having been found indulged in forest offences was made subject matter of a confiscation proceedings, and therefore, the procedure followed for confiscation of the vehicle and for its sale is punitive in nature and not with a view to give benefit to anybody including the Department which initiated the confiscation proceeding. Apart from that, the claim of the Orissa State Financial Corporation as against its loanee (who had taken the vehicle on hire- purchase agreement) brings the loanee and the sureties within the default clause under the State Financial Corporation Act, 1951 or the heirs and successors of such persons. Procedure is provided in the Act, 1951 and the Rules thereof about the manner in which such loan is to be recovered, and in that context only the vehicle under the hire-purchase agreement is placed as the first charge. If such property is not available for any reason, then the loan is not automatically waived or the loanee and his sureties are not automatically redeemed of the liabilities to repay. The Financial Corporation is concerned with repayment of loan either from the property or persons offered as surety. Thus, a vehicle, which is subject matter of confiscation proceeding under the Act, 1872, being not available to the Orissa State Financial Corporation for adjustment of the unpaid loan, that does not at all bring out an anomalous situation so as to defeat the right of the Orissa State Financial Corporation. Agreement between the Orissa State Financial Corporation and the loanee is a pure and simple contract governed by the provisions of the Contract Act, 1872 read with the provisions in the Act, 1951 and its Rules. On the other hand, a confiscation proceeding under the Act, 1972 is punitive in nature for commission of a forest offence. Thus, by virtue of the provision in Section 56 read with Section 64 (2) of the Act, 1972, the action taken for confiscation of the vehicle cannot be extended to grant protection of the loan advanced by Orissa State Financial Corporation. By doing that it amounts to grant premium to the pick-pockets in as much as, by making payment of the confiscation amount in favour of the Orissa State Financial Corporation the loan burden of the accused of the forest offence is reduced to the extent of the sale proceeds of the vehicle. In other words, on payment of the sale proceeds of the confiscation proceeding to the Orissa State Financial Corporation towards discharge of the loan account of the accused of a forest offence, it would lead to a system to reward him by repayment of his loan. Then it does not become a penalty nor the action become punitive, but it remains as a reward to the accused of forest offence. Such a concept is totally not conceivable from any provision in the Act, 1972 or the Act, 1951. [AIR 2002 Orissa 130 Overruled]. -- STATE FINANCIAL CORPORATIONS ACT, 1951. 
Section 29; Discharge of loan  Orissa Forest Act (14 of 1972), Section 56  Confiscation of vehicle - Held, The Authorities under Section 56 of the Orissa Forest Act, 1972 are not obliged to release the vehicle from the confiscation proceeding or to pay the sale proceeds of the vehicle after the order of confiscation in favour of Orissa State Financial Corporation when such vehicles were purchased on being financed by the Orissa State Financial Corporation and the loan had not been liquidated by the date of the seizure/confiscation of the vehicle. Concept of first charge or second charge has no applicability when the vehicle is not otherwise disposed of to determine the liabilities of the loanee. On the other hand the vehicle having been found indulged in forest offences was made subject matter of a confiscation proceedings, and therefore, the procedure followed for confiscation of the vehicle and for its sale is punitive in nature and not with a view to give benefit to anybody including the Department which initiated the confiscation proceeding. Apart from that, the claim of the Orissa State Financial Corporation as against its loanee (who had taken the vehicle on hire- purchase agreement) brings the loanee and the sureties within the default clause under the State Financial Corporation Act, 1951 or the heirs and successors of such persons. Procedure is provided in the Act, 1951 and the Rules thereof about the manner in which such loan is to be recovered, and in that context only the vehicle under the hire-purchase agreement is placed as the first charge. If such property is not available for any reason, then the loan is not automatically waived or the loanee and his sureties are not automatically redeemed of the liabilities to repay. The Financial Corporation is concerned with repayment of loan either from the property or persons offered as surety. Thus, a vehicle, which is subject matter of confiscation proceeding under the Act, 1872, being not available to the Orissa State Financial Corporation for adjustment of the unpaid loan, that does not at all bring out an anomalous situation so as to defeat the right of the Orissa State Financial Corporation. Agreement between the Orissa State Financial Corporation and the loanee is a pure and simple contract governed by the provisions of the Contract Act, 1872 read with the provisions in the Act, 1951 and its Rules. On the other hand, a confiscation proceeding under the Act, 1972 is punitive in nature for commission of a forest offence. Thus, by virtue of the provision in Section 56 read with Section 64 (2) of the Act, 1972, the action taken for confiscation of the vehicle cannot be extended to grant protection of the loan advanced by Orissa State Financial Corporation. By doing that it amounts to grant premium to the pick-pockets in as much as, by making payment of the confiscation amount in favour of the Orissa State Financial Corporation the loan burden of the accused of the forest offence is reduced to the extent of the sale proceeds of the vehicle. In other words, on payment of the sale proceeds of the confiscation proceeding to the Orissa State Financial Corporation towards discharge of the loan account of the accused of a forest offence, it would lead to a system to reward him by repayment of his loan. Then it does not become a penalty nor the action become punitive, but it remains as a reward to the accused of forest offence. Such a concept is totally not conceivable from any provision in the Act, 1972 or the Act, 1951. [AIR 2002 Orissa 130 Overruled].  -  In that case, the stand of the Revenue was disapproved by the Orissa High Court. 16. Learned Counsel for the petitioner submitted that the photographs taken by the petitioner are not goods which can be sold and is not a marketable commodity like any other goods.',
			'caseanalysis' => null,
			'casesref' => 'Imagic Creative Pvt. Ltd. v. Commissioner of Commercial Taxes and Ors.;',
			'citingcases' => '',
			'counselplain' => '',
			'counseldef' => '',
			'court' => 'Orissa',
			'court_type' => 'HC',
			'decidedon' => '2008-04-02',
			'deposition' => '',
			'favorof' => null,
			'findings' => null,
			'judge' => ' A.K. Ganguly, C.J. and; B.N. Mahapatra, J.',
			'judgement' => '<p style="text-align: justify;">A.K. Ganguly, C.J.</p><p style="text-align: justify;">1. Initially three S.J.Cs. being S.J.C. Nos. 10 of 1997, 8 of 1997 and 9 of 1997 were filed and subsequently renumbered as STREV Nos. 212, 214 and 216 of 2007 respectively. In view of the common questions of facts and law, all the three Revision Applications are heard and disposed of together.</p><p style="text-align: justify;">2. The following questions of law arising out of the order passed by the Orissa Sales Tax Tribunal on 8.12.1993 in Second Appeal Nos. 3345 to 3350 of 1991-92 have been referred to this Hon'ble High Court in terms of the order of this Hon'ble Court dated 24.2.1997. The questions are:</p><p style="text-align: justify;">(i) Whether on the facts and in the circumstances of the case, the Tribunal is right to held that tax is exigible for photographs as execution of works contract ?</p><p style="text-align: justify;">(ii) Whether on the facts and in the circumstances of the case, the conclusion of the Tribunal is perverse due to non-consideration and mis-consideration of facts and law and, therefore, it is liable to be set aside for re-hearing ?</p><p style="text-align: justify;">3. The materials facts out of which those questions arise are that the petitioner carries on the business of processing and developing photography. In the usual course of business, the petitioner takes photographs of persons or of family and then develops the negative by employing his skill and labour and then supplies the photographs to the clients. These photographs which are prepared by the petitioner are not commercial items because they are neither purchased nor sold. However, to develop these photographs employment of skill and labour is essential. It may be mentioned that petitioner does not carry on any sale of photographs of national leaders, God and Goddess.</p><p style="text-align: justify;">4. After the passing of 46th amendment of the Constitution of India and consequent amendments thereto in Orissa Sales Tax Act (OST Act), the Sales Tax Officer, Bhubaneswar-II Circle, Bhubaneswar sent notices to assess the petitioner as an unregistered dealer under Section 12 (5) of the OST Act, inter alia, contending that the petitioner's activities can be called 'works contract'. Pursuant to said notice, the petitioner gave its reply and appeared before the Sales Tax Officer and produced the books of account and documents including Receipts, Purchase Memos, Vouchers, Ledger and thereby denied its liability under the OST Act. The petitioner also submitted objection petitions on various dates i.e. 28.12.1985, 10.1.1986, 20.2.1986 and 29.2.1988 contending, inter alia, that the petitioner has no sales tax liability under OST Act and the notices, which were issued, are without jurisdiction.</p><p style="text-align: justify;">5. Ignoring the said objections of the petitioner, the Sales Tax Officer, Bhubaneswar-II Circle, Bhubaneswar assessed the petitioner as an unregistered dealer, inter alia, holding that the petitioner is liable to pay sales tax as petitioner has been alleged to carry activities of 'works contract'. Therefore, orders of assessment being dated 29.2.1988 for the years 1984-85 (9/84 to 3/85), 1985-86 and 1986- 87 under Section 12(5) of OST Act and under Rule 5 of the Orissa Additional Sales Tax Rules, 1975 were passed and a tax of Rs. 20,765.00 and penalty of Rs. 5,000.00 totalling to Rs. 25,765.00 was imposed on the petitioner. The petitioner then filed the First Appeal before the learned Assistant Commissioner of Sales Tax. The First Appellate Authority by an order dated 27.9.1991 confirmed the levy of tax under the OST Act, but reduced the penalty to Rs. 1250.00. Thereupon, the petitioner filed the Second Appeal before the Orissa Sales Tax Tribunal, Cuttack. The said Tribunal heard the Second Appeal and in course of hearing, the petitioner raised various contentions. Ultimately, the Tribunal upheld the levy of tax but deleted the penalty.</p><p style="text-align: justify;">6. Thereafter the petitioner came up with a reference application under Section 24(1) of the Orissa Sales Tax Act framing certain questions for being referred to the Hon'ble High Court. The said prayer of the petitioner was rejected by the Tribunal. Then the petitioner moved Hon'ble High Court under Section 24(2)(b) of the Orissa Sales Tax Act, 1947 whereupon the High Court directed the Tribunal to state to case and refer the questions under Section 24(3) of the OST Act for a decision of the High Court.</p><p style="text-align: justify;">7. Accordingly, the Tribunal stated the case and referred the aforesaid questions for a decision of the High Court.</p><p style="text-align: justify;">8. Learned Counsel for the petitioner before the High Court submitted that in the transaction in question, there is no contract of sale between the petitioner and the client. It is only a contract of service and the photographs, which the petitioner produced by supplying the same has no commercial value and are not marketable. So, there is no question of a works contract. It is the consistent stand of the petitioner that the present photographs which are produced by the petitioner have no utility or value to any other person than the customer. By developing such photographs, the petitioner only renders service to his customers. The customer pays for the service rendered by the petitioner. It is the contention of the petitioner that his activity is similar to that of consulting firm preparing plan and sketches pursuant to client's specification or professional giving opinion on papers. All those activities are done to serve the client. Therefore, this does not come within the purview of the definition of 'goods', 'sale', 'dealer' or 'works contract'. It is the petitioner's case that he purchased the goods, namely, papers on payment of sales tax. Further levy of tax on the personal service rendered to the client of the petitioner will amount to double taxation. It is also the contention of the petitioner that the paper which is used in the photography are incidental and insignificant.</p><p style="text-align: justify;">9. In support of its contention, learned Counsel for the petitioner has relied on several judgments. First reliance was place on the judgment of the Supreme Court in the case of Sales Tax Officer v. B.C. Kame reported in 39 STC 237(SC). At page 241 of the report, learned Judges of the Supreme Court held that a photographer takes the photograph and develops the negatives and does other photographic work and thereafter supplies the prints to his client. By doing so he cannot be said to enter into a contract for sale of goods. On the other hand, the contract is for use of skill and labour by the photographer to bring about the desired result. Learned Judges held that the job of a photographer is a contract for work and labour and it is not a contract of sale.</p><p style="text-align: justify;">10. Reliance was also placed on a judgment of this High Court in the case of Photo Emporium v. Addl. District Magistrate reported in 77 STC 199 in which this High Court followed the ratio of the judgment of the Supreme Court in the case of B.C. Kame. In that case, the stand of the Revenue was disapproved by the Orissa High Court.</p><p style="text-align: justify;">11. Similar view was taken in 110 STC 145 in the case of Foto Colour Labs Pvt. Ltd. v. Commercial Taxes Officer where the Tribunal held that the transfer of paper in the photograph is purely incidental and payment is only taken to give positive prints and not to get the photo papers. Therefore, the contract in between the petitioner and his client is not a contract of sale, and neither directly or indirectly works contract is involved in the supply of photo papers. Similar view was taken by the West Bengal Taxation Tribunal in the case of Studio Kamalalaya v. Commercial Tax Officer reported in 89 STC 307.</p><p style="text-align: justify;">12. In the case of Bavens v. Onion of India report in 97 STC 161, learned Judges held that when a photographer takes a photograph of his customer, he develops the negative and supplies positive prints in the desired size to the customer. In doing so the photographer uses his own camera and his own film. The negative belongs to the photographer and not to the customer. No basic goods are provided by the customer which are subjected to processing by the photographer so as to make the contract a works contract. There is no accretion to goods or property or the nucleus of a property which belongs to the customer. It is the skill of the photographer which is most important to get the desired result.</p><p style="text-align: justify;">13. Hon'ble Karnataka High Court followed the same principle in the case of Keshoram Surlndranath Photo-mag Pvt. Ltd. v. Assistant Commissioner of Commercial Taxes reported in 121 STC 175. In that judgment, learned Judges of the Karnataka High Court relied on the judgment of the Supreme Court in B.C. Kame's case and came to the conclusion that in the job of the photographer in supplying positive prints to his customer, no works contract is involved and photographs are not marketable or saleable commodity and as such no tax can be levied on it.</p><p style="text-align: justify;">14. Against the said judgment of the Karnataka High Court, the State of Karnataka High Court filed a S.L.P. before the Hon'ble Supreme Court bearing SLP Nos. 6136-6163 of 2000 and the Hon'ble Supreme Court dismissed the SLP on 20th April, 2000.</p><p style="text-align: justify;">15. In the case of Rainbow Colour Lab v. State of M.P. learned Judges of the Hon'ble Supreme Court reiterated its judgment in B.C. Kame's case and came to the following conclusion:</p><p style="text-align: justify;">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.</p><p style="text-align: justify;">Hon'ble Supreme Court in Bharat Sanchar Nigam Ltd. v. Union of India reported in 145 STC 91 again reiterated the principle in B.C. Kame's case and held that the work done by the photographer is only in the nature of a service contract not involving any sale of goods and held that the stand taken by the State cannot be sustained.</p><p style="text-align: justify;">16. Learned Counsel for the petitioner submitted that the photographs taken by the petitioner are not goods which can be sold and is not a marketable commodity like any other goods. When the copies of photographs are made out, they have no utility or value to any other person than the customer. It is already admitted that the papers utilized for photographs are tax paid goods. Therefore, it is contended by the learned Counsel for the petitioner that the work of photography does not come within the purview of works contract as defined in Section 2(jj) of the Orissa Sales Tax Act.</p><p style="text-align: justify;">17. Learned Counsel for the Revenue in this case virtually did not contest the submission made by the learned Counsel for the petitioner and in support of his contention, learned Counsel for the Revenue relied on a decision of the Supreme Court in the case of Imagic Creative Pvt. Ltd. v. Commissioner of Commercial Taxes and Ors. reported in (2008) 10 RC 236. In that judgment, learned Judges held that since the contract in question is a service contract, it is difficult to hold that in a case of this nature, sales tax would be payable on the value of the entire contract irrespective of the element of service provided.</p><p style="text-align: justify;">For the reasons discussed above, we answer the first question in the negative and the second question, in the affirmative. We thus answer both the questions in favour of the assessee and against the Revenue.</p><p style="text-align: justify;">The three revision applications are thus disposed of.</p><p style="text-align: justify;">No costs.</p><p style="text-align: justify;">B.N. Mahapatra, J.</p><p style="text-align: justify;">18. I agree.<p style="text-align: justify;"></p><p style="text-align: justify;">',
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			'pubs' => '106(2008)CLT317; 2008(I)OLR953; (2008)17VST289(Orissa)',
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		'casename' => 'Studio Sujata Vs. Commissioner of Sales Tax',
		'casenote' => 'Sales Tax - Assessment - Contract of Sale - Section 12 (5) of Orissa Sales Tax 1947 - Petitioner carries on business of processing and developing photography - Revenue assessed petitioner under Section 12(5) of Act on ground that activities of petitioner can be called works contract - Petitioner approached to Assistant of Sales Tax on ground that there is no contract of sale between the petitioner and the client, it is only service - Dismissed and affirmed by Tribunal - Hence present petition - Whether Tribunal is right to held that tax is exigible for photographs as execution of works contract or not? - Held, as per precedent laid down by Supreme Court in case of Sales Tax Officer v. B.C. Kame that photographer takes photograph and develops negatives and does other photographic work and thereafter supplies prints to his client - By doing so he cannot be said to enter into contract for sale of goods - Therefore, job of photographer is contract for work and labour and it is not contract of sale - Revenue committed mistake in assessing petitioner under Section 12(5) of Act on basis of contract of sale - Petition disposed of accordingly  - STATE FINANCIAL CORPORATIONS ACT, 1951 [63/1951]. Section 29; [P.K. Tripathy, A.K. Parichha & N.Prusty, JJ] Discharge of loan  Orissa Forest Act (14 of 1972), Section 56  Confiscation of vehicle - Held, The Authorities under Section 56 of the Orissa Forest Act, 1972 are not obliged to release the vehicle from the confiscation proceeding or to pay the sale proceeds of the vehicle after the order of confiscation in favour of Orissa State Financial Corporation when such vehicles were purchased on being financed by the Orissa State Financial Corporation and the loan had not been liquidated by the date of the seizure/confiscation of the vehicle. Concept of first charge or second charge has no applicability when the vehicle is not otherwise disposed of to determine the liabilities of the loanee. On the other hand the vehicle having been found indulged in forest offences was made subject matter of a confiscation proceedings, and therefore, the procedure followed for confiscation of the vehicle and for its sale is punitive in nature and not with a view to give benefit to anybody including the Department which initiated the confiscation proceeding. Apart from that, the claim of the Orissa State Financial Corporation as against its loanee (who had taken the vehicle on hire- purchase agreement) brings the loanee and the sureties within the default clause under the State Financial Corporation Act, 1951 or the heirs and successors of such persons. Procedure is provided in the Act, 1951 and the Rules thereof about the manner in which such loan is to be recovered, and in that context only the vehicle under the hire-purchase agreement is placed as the first charge. If such property is not available for any reason, then the loan is not automatically waived or the loanee and his sureties are not automatically redeemed of the liabilities to repay. The Financial Corporation is concerned with repayment of loan either from the property or persons offered as surety. Thus, a vehicle, which is subject matter of confiscation proceeding under the Act, 1872, being not available to the Orissa State Financial Corporation for adjustment of the unpaid loan, that does not at all bring out an anomalous situation so as to defeat the right of the Orissa State Financial Corporation. Agreement between the Orissa State Financial Corporation and the loanee is a pure and simple contract governed by the provisions of the Contract Act, 1872 read with the provisions in the Act, 1951 and its Rules. On the other hand, a confiscation proceeding under the Act, 1972 is punitive in nature for commission of a forest offence. Thus, by virtue of the provision in Section 56 read with Section 64 (2) of the Act, 1972, the action taken for confiscation of the vehicle cannot be extended to grant protection of the loan advanced by Orissa State Financial Corporation. By doing that it amounts to grant premium to the pick-pockets in as much as, by making payment of the confiscation amount in favour of the Orissa State Financial Corporation the loan burden of the accused of the forest offence is reduced to the extent of the sale proceeds of the vehicle. In other words, on payment of the sale proceeds of the confiscation proceeding to the Orissa State Financial Corporation towards discharge of the loan account of the accused of a forest offence, it would lead to a system to reward him by repayment of his loan. Then it does not become a penalty nor the action become punitive, but it remains as a reward to the accused of forest offence. Such a concept is totally not conceivable from any provision in the Act, 1972 or the Act, 1951. [AIR 2002 Orissa 130 Overruled]. -- STATE FINANCIAL CORPORATIONS ACT, 1951. 
Section 29; Discharge of loan  Orissa Forest Act (14 of 1972), Section 56  Confiscation of vehicle - Held, The Authorities under Section 56 of the Orissa Forest Act, 1972 are not obliged to release the vehicle from the confiscation proceeding or to pay the sale proceeds of the vehicle after the order of confiscation in favour of Orissa State Financial Corporation when such vehicles were purchased on being financed by the Orissa State Financial Corporation and the loan had not been liquidated by the date of the seizure/confiscation of the vehicle. Concept of first charge or second charge has no applicability when the vehicle is not otherwise disposed of to determine the liabilities of the loanee. On the other hand the vehicle having been found indulged in forest offences was made subject matter of a confiscation proceedings, and therefore, the procedure followed for confiscation of the vehicle and for its sale is punitive in nature and not with a view to give benefit to anybody including the Department which initiated the confiscation proceeding. Apart from that, the claim of the Orissa State Financial Corporation as against its loanee (who had taken the vehicle on hire- purchase agreement) brings the loanee and the sureties within the default clause under the State Financial Corporation Act, 1951 or the heirs and successors of such persons. Procedure is provided in the Act, 1951 and the Rules thereof about the manner in which such loan is to be recovered, and in that context only the vehicle under the hire-purchase agreement is placed as the first charge. If such property is not available for any reason, then the loan is not automatically waived or the loanee and his sureties are not automatically redeemed of the liabilities to repay. The Financial Corporation is concerned with repayment of loan either from the property or persons offered as surety. Thus, a vehicle, which is subject matter of confiscation proceeding under the Act, 1872, being not available to the Orissa State Financial Corporation for adjustment of the unpaid loan, that does not at all bring out an anomalous situation so as to defeat the right of the Orissa State Financial Corporation. Agreement between the Orissa State Financial Corporation and the loanee is a pure and simple contract governed by the provisions of the Contract Act, 1872 read with the provisions in the Act, 1951 and its Rules. On the other hand, a confiscation proceeding under the Act, 1972 is punitive in nature for commission of a forest offence. Thus, by virtue of the provision in Section 56 read with Section 64 (2) of the Act, 1972, the action taken for confiscation of the vehicle cannot be extended to grant protection of the loan advanced by Orissa State Financial Corporation. By doing that it amounts to grant premium to the pick-pockets in as much as, by making payment of the confiscation amount in favour of the Orissa State Financial Corporation the loan burden of the accused of the forest offence is reduced to the extent of the sale proceeds of the vehicle. In other words, on payment of the sale proceeds of the confiscation proceeding to the Orissa State Financial Corporation towards discharge of the loan account of the accused of a forest offence, it would lead to a system to reward him by repayment of his loan. Then it does not become a penalty nor the action become punitive, but it remains as a reward to the accused of forest offence. Such a concept is totally not conceivable from any provision in the Act, 1972 or the Act, 1951. [AIR 2002 Orissa 130 Overruled].  -  In that case, the stand of the Revenue was disapproved by the Orissa High Court. 16. Learned Counsel for the petitioner submitted that the photographs taken by the petitioner are not goods which can be sold and is not a marketable commodity like any other goods.',
		'caseanalysis' => null,
		'casesref' => 'Imagic Creative Pvt. Ltd. v. Commissioner of Commercial Taxes and Ors.;',
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		'counselplain' => '',
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		'decidedon' => '2008-04-02',
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		'judge' => ' A.K. Ganguly, C.J. and; B.N. Mahapatra, J.',
		'judgement' => '<p>A.K. Ganguly, C.J.</p><p>1. Initially three S.J.Cs. being S.J.C. Nos. 10 of 1997, 8 of 1997 and 9 of 1997 were filed and subsequently renumbered as STREV Nos. 212, 214 and 216 of 2007 respectively. In view of the common questions of facts and law, all the three Revision Applications are heard and disposed of together.</p><p>2. The following questions of law arising out of the order passed by the Orissa Sales Tax Tribunal on 8.12.1993 in Second Appeal Nos. 3345 to 3350 of 1991-92 have been referred to this Hon'ble High Court in terms of the order of this Hon'ble Court dated 24.2.1997. The questions are:</p><p>(i) Whether on the facts and in the circumstances of the case, the Tribunal is right to held that tax is exigible for photographs as execution of works contract ?</p><p>(ii) Whether on the facts and in the circumstances of the case, the conclusion of the Tribunal is perverse due to non-consideration and mis-consideration of facts and law and, therefore, it is liable to be set aside for re-hearing ?</p><p>3. The materials facts out of which those questions arise are that the petitioner carries on the business of processing and developing photography. In the usual course of business, the petitioner takes photographs of persons or of family and then develops the negative by employing his skill and labour and then supplies the photographs to the clients. These photographs which are prepared by the petitioner are not commercial items because they are neither purchased nor sold. However, to develop these photographs employment of skill and labour is essential. It may be mentioned that petitioner does not carry on any sale of photographs of national leaders, God and Goddess.</p><p>4. After the passing of 46th amendment of the Constitution of India and consequent amendments thereto in Orissa Sales Tax Act (OST Act), the Sales Tax Officer, Bhubaneswar-II Circle, Bhubaneswar sent notices to assess the petitioner as an unregistered dealer under Section 12 (5) of the OST Act, inter alia, contending that the petitioner's activities can be called 'works contract'. Pursuant to said notice, the petitioner gave its reply and appeared before the Sales Tax Officer and produced the books of account and documents including Receipts, Purchase Memos, Vouchers, Ledger and thereby denied its liability under the OST Act. The petitioner also submitted objection petitions on various dates i.e. 28.12.1985, 10.1.1986, 20.2.1986 and 29.2.1988 contending, inter alia, that the petitioner has no sales tax liability under OST Act and the notices, which were issued, are without jurisdiction.</p><p>5. Ignoring the said objections of the petitioner, the Sales Tax Officer, Bhubaneswar-II Circle, Bhubaneswar assessed the petitioner as an unregistered dealer, inter alia, holding that the petitioner is liable to pay sales tax as petitioner has been alleged to carry activities of 'works contract'. Therefore, orders of assessment being dated 29.2.1988 for the years 1984-85 (9/84 to 3/85), 1985-86 and 1986- 87 under Section 12(5) of OST Act and under Rule 5 of the Orissa Additional Sales Tax Rules, 1975 were passed and a tax of Rs. 20,765.00 and penalty of Rs. 5,000.00 totalling to Rs. 25,765.00 was imposed on the petitioner. The petitioner then filed the First Appeal before the learned Assistant Commissioner of Sales Tax. The First Appellate Authority by an order dated 27.9.1991 confirmed the levy of tax under the OST Act, but reduced the penalty to Rs. 1250.00. Thereupon, the petitioner filed the Second Appeal before the Orissa Sales Tax Tribunal, Cuttack. The said Tribunal heard the Second Appeal and in course of hearing, the petitioner raised various contentions. Ultimately, the Tribunal upheld the levy of tax but deleted the penalty.</p><p>6. Thereafter the petitioner came up with a reference application under Section 24(1) of the Orissa Sales Tax Act framing certain questions for being referred to the Hon'ble High Court. The said prayer of the petitioner was rejected by the Tribunal. Then the petitioner moved Hon'ble High Court under Section 24(2)(b) of the Orissa Sales Tax Act, 1947 whereupon the High Court directed the Tribunal to state to case and refer the questions under Section 24(3) of the OST Act for a decision of the High Court.</p><p>7. Accordingly, the Tribunal stated the case and referred the aforesaid questions for a decision of the High Court.</p><p>8. Learned Counsel for the petitioner before the High Court submitted that in the transaction in question, there is no contract of sale between the petitioner and the client. It is only a contract of service and the photographs, which the petitioner produced by supplying the same has no commercial value and are not marketable. So, there is no question of a works contract. It is the consistent stand of the petitioner that the present photographs which are produced by the petitioner have no utility or value to any other person than the customer. By developing such photographs, the petitioner only renders service to his customers. The customer pays for the service rendered by the petitioner. It is the contention of the petitioner that his activity is similar to that of consulting firm preparing plan and sketches pursuant to client's specification or professional giving opinion on papers. All those activities are done to serve the client. Therefore, this does not come within the purview of the definition of 'goods', 'sale', 'dealer' or 'works contract'. It is the petitioner's case that he purchased the goods, namely, papers on payment of sales tax. Further levy of tax on the personal service rendered to the client of the petitioner will amount to double taxation. It is also the contention of the petitioner that the paper which is used in the photography are incidental and insignificant.</p><p>9. In support of its contention, learned Counsel for the petitioner has relied on several judgments. First reliance was place on the judgment of the Supreme Court in the case of Sales Tax Officer v. B.C. Kame reported in 39 STC 237(SC). At page 241 of the report, learned Judges of the Supreme Court held that a photographer takes the photograph and develops the negatives and does other photographic work and thereafter supplies the prints to his client. By doing so he cannot be said to enter into a contract for sale of goods. On the other hand, the contract is for use of skill and labour by the photographer to bring about the desired result. Learned Judges held that the job of a photographer is a contract for work and labour and it is not a contract of sale.</p><p>10. Reliance was also placed on a judgment of this High Court in the case of Photo Emporium v. Addl. District Magistrate reported in 77 STC 199 in which this High Court followed the ratio of the judgment of the Supreme Court in the case of B.C. Kame. In that case, the stand of the Revenue was disapproved by the Orissa High Court.</p><p>11. Similar view was taken in 110 STC 145 in the case of Foto Colour Labs Pvt. Ltd. v. Commercial Taxes Officer where the Tribunal held that the transfer of paper in the photograph is purely incidental and payment is only taken to give positive prints and not to get the photo papers. Therefore, the contract in between the petitioner and his client is not a contract of sale, and neither directly or indirectly works contract is involved in the supply of photo papers. Similar view was taken by the West Bengal Taxation Tribunal in the case of Studio Kamalalaya v. Commercial Tax Officer reported in 89 STC 307.</p><p>12. In the case of Bavens v. Onion of India report in 97 STC 161, learned Judges held that when a photographer takes a photograph of his customer, he develops the negative and supplies positive prints in the desired size to the customer. In doing so the photographer uses his own camera and his own film. The negative belongs to the photographer and not to the customer. No basic goods are provided by the customer which are subjected to processing by the photographer so as to make the contract a works contract. There is no accretion to goods or property or the nucleus of a property which belongs to the customer. It is the skill of the photographer which is most important to get the desired result.</p><p>13. Hon'ble Karnataka High Court followed the same principle in the case of Keshoram Surlndranath Photo-mag Pvt. Ltd. v. Assistant Commissioner of Commercial Taxes reported in 121 STC 175. In that judgment, learned Judges of the Karnataka High Court relied on the judgment of the Supreme Court in B.C. Kame's case and came to the conclusion that in the job of the photographer in supplying positive prints to his customer, no works contract is involved and photographs are not marketable or saleable commodity and as such no tax can be levied on it.</p><p>14. Against the said judgment of the Karnataka High Court, the State of Karnataka High Court filed a S.L.P. before the Hon'ble Supreme Court bearing SLP Nos. 6136-6163 of 2000 and the Hon'ble Supreme Court dismissed the SLP on 20th April, 2000.</p><p>15. In the case of Rainbow Colour Lab v. State of M.P. learned Judges of the Hon'ble Supreme Court reiterated its judgment in B.C. Kame's case and came to the following conclusion:</p><p>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.</p><p>Hon'ble Supreme Court in Bharat Sanchar Nigam Ltd. v. Union of India reported in 145 STC 91 again reiterated the principle in B.C. Kame's case and held that the work done by the photographer is only in the nature of a service contract not involving any sale of goods and held that the stand taken by the State cannot be sustained.</p><p>16. Learned Counsel for the petitioner submitted that the photographs taken by the petitioner are not goods which can be sold and is not a marketable commodity like any other goods. When the copies of photographs are made out, they have no utility or value to any other person than the customer. It is already admitted that the papers utilized for photographs are tax paid goods. Therefore, it is contended by the learned Counsel for the petitioner that the work of photography does not come within the purview of works contract as defined in Section 2(jj) of the Orissa Sales Tax Act.</p><p>17. Learned Counsel for the Revenue in this case virtually did not contest the submission made by the learned Counsel for the petitioner and in support of his contention, learned Counsel for the Revenue relied on a decision of the Supreme Court in the case of Imagic Creative Pvt. Ltd. v. Commissioner of Commercial Taxes and Ors. reported in (2008) 10 RC 236. In that judgment, learned Judges held that since the contract in question is a service contract, it is difficult to hold that in a case of this nature, sales tax would be payable on the value of the entire contract irrespective of the element of service provided.</p><p>For the reasons discussed above, we answer the first question in the negative and the second question, in the affirmative. We thus answer both the questions in favour of the assessee and against the Revenue.</p><p>The three revision applications are thus disposed of.</p><p>No costs.</p><p>B.N. Mahapatra, J.</p><p>18. I agree.<p></p><p>',
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		'prhistory' => '',
		'pubs' => '106(2008)CLT317; 2008(I)OLR953; (2008)17VST289(Orissa)',
		'ratiodecidendi' => '',
		'respondent' => 'Commissioner of Sales Tax',
		'sub' => 'Sales Tax/VAT',
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$content = array(
	(int) 0 => '<p>A.K. Ganguly, C.J.',
	(int) 1 => '<p>1. Initially three S.J.Cs. being S.J.C. Nos. 10 of 1997, 8 of 1997 and 9 of 1997 were filed and subsequently renumbered as STREV Nos. 212, 214 and 216 of 2007 respectively. In view of the common questions of facts and law, all the three Revision Applications are heard and disposed of together.',
	(int) 2 => '<p>2. The following questions of law arising out of the order passed by the Orissa Sales Tax Tribunal on 8.12.1993 in Second Appeal Nos. 3345 to 3350 of 1991-92 have been referred to this Hon'ble High Court in terms of the order of this Hon'ble Court dated 24.2.1997. The questions are:',
	(int) 3 => '<p>(i) Whether on the facts and in the circumstances of the case, the Tribunal is right to held that tax is exigible for photographs as execution of works contract ?',
	(int) 4 => '<p>(ii) Whether on the facts and in the circumstances of the case, the conclusion of the Tribunal is perverse due to non-consideration and mis-consideration of facts and law and, therefore, it is liable to be set aside for re-hearing ?',
	(int) 5 => '<p>3. The materials facts out of which those questions arise are that the petitioner carries on the business of processing and developing photography. In the usual course of business, the petitioner takes photographs of persons or of family and then develops the negative by employing his skill and labour and then supplies the photographs to the clients. These photographs which are prepared by the petitioner are not commercial items because they are neither purchased nor sold. However, to develop these photographs employment of skill and labour is essential. It may be mentioned that petitioner does not carry on any sale of photographs of national leaders, God and Goddess.',
	(int) 6 => '<p>4. After the passing of 46th amendment of the Constitution of India and consequent amendments thereto in Orissa Sales Tax Act (OST Act), the Sales Tax Officer, Bhubaneswar-II Circle, Bhubaneswar sent notices to assess the petitioner as an unregistered dealer under Section 12 (5) of the OST Act, inter alia, contending that the petitioner's activities can be called 'works contract'. Pursuant to said notice, the petitioner gave its reply and appeared before the Sales Tax Officer and produced the books of account and documents including Receipts, Purchase Memos, Vouchers, Ledger and thereby denied its liability under the OST Act. The petitioner also submitted objection petitions on various dates i.e. 28.12.1985, 10.1.1986, 20.2.1986 and 29.2.1988 contending, inter alia, that the petitioner has no sales tax liability under OST Act and the notices, which were issued, are without jurisdiction.',
	(int) 7 => '<p>5. Ignoring the said objections of the petitioner, the Sales Tax Officer, Bhubaneswar-II Circle, Bhubaneswar assessed the petitioner as an unregistered dealer, inter alia, holding that the petitioner is liable to pay sales tax as petitioner has been alleged to carry activities of 'works contract'. Therefore, orders of assessment being dated 29.2.1988 for the years 1984-85 (9/84 to 3/85), 1985-86 and 1986- 87 under Section 12(5) of OST Act and under Rule 5 of the Orissa Additional Sales Tax Rules, 1975 were passed and a tax of Rs. 20,765.00 and penalty of Rs. 5,000.00 totalling to Rs. 25,765.00 was imposed on the petitioner. The petitioner then filed the First Appeal before the learned Assistant Commissioner of Sales Tax. The First Appellate Authority by an order dated 27.9.1991 confirmed the levy of tax under the OST Act, but reduced the penalty to Rs. 1250.00. Thereupon, the petitioner filed the Second Appeal before the Orissa Sales Tax Tribunal, Cuttack. The said Tribunal heard the Second Appeal and in course of hearing, the petitioner raised various contentions. Ultimately, the Tribunal upheld the levy of tax but deleted the penalty.',
	(int) 8 => '<p>6. Thereafter the petitioner came up with a reference application under Section 24(1) of the Orissa Sales Tax Act framing certain questions for being referred to the Hon'ble High Court. The said prayer of the petitioner was rejected by the Tribunal. Then the petitioner moved Hon'ble High Court under Section 24(2)(b) of the Orissa Sales Tax Act, 1947 whereupon the High Court directed the Tribunal to state to case and refer the questions under Section 24(3) of the OST Act for a decision of the High Court.',
	(int) 9 => '<p>7. Accordingly, the Tribunal stated the case and referred the aforesaid questions for a decision of the High Court.',
	(int) 10 => '<p>8. Learned Counsel for the petitioner before the High Court submitted that in the transaction in question, there is no contract of sale between the petitioner and the client. It is only a contract of service and the photographs, which the petitioner produced by supplying the same has no commercial value and are not marketable. So, there is no question of a works contract. It is the consistent stand of the petitioner that the present photographs which are produced by the petitioner have no utility or value to any other person than the customer. By developing such photographs, the petitioner only renders service to his customers. The customer pays for the service rendered by the petitioner. It is the contention of the petitioner that his activity is similar to that of consulting firm preparing plan and sketches pursuant to client's specification or professional giving opinion on papers. All those activities are done to serve the client. Therefore, this does not come within the purview of the definition of 'goods', 'sale', 'dealer' or 'works contract'. It is the petitioner's case that he purchased the goods, namely, papers on payment of sales tax. Further levy of tax on the personal service rendered to the client of the petitioner will amount to double taxation. It is also the contention of the petitioner that the paper which is used in the photography are incidental and insignificant.',
	(int) 11 => '<p>9. In support of its contention, learned Counsel for the petitioner has relied on several judgments. First reliance was place on the judgment of the Supreme Court in the case of Sales Tax Officer v. B.C. Kame reported in 39 STC 237(SC). At page 241 of the report, learned Judges of the Supreme Court held that a photographer takes the photograph and develops the negatives and does other photographic work and thereafter supplies the prints to his client. By doing so he cannot be said to enter into a contract for sale of goods. On the other hand, the contract is for use of skill and labour by the photographer to bring about the desired result. Learned Judges held that the job of a photographer is a contract for work and labour and it is not a contract of sale.',
	(int) 12 => '<p>10. Reliance was also placed on a judgment of this High Court in the case of Photo Emporium v. Addl. District Magistrate reported in 77 STC 199 in which this High Court followed the ratio of the judgment of the Supreme Court in the case of B.C. Kame. In that case, the stand of the Revenue was disapproved by the Orissa High Court.',
	(int) 13 => '<p>11. Similar view was taken in 110 STC 145 in the case of Foto Colour Labs Pvt. Ltd. v. Commercial Taxes Officer where the Tribunal held that the transfer of paper in the photograph is purely incidental and payment is only taken to give positive prints and not to get the photo papers. Therefore, the contract in between the petitioner and his client is not a contract of sale, and neither directly or indirectly works contract is involved in the supply of photo papers. Similar view was taken by the West Bengal Taxation Tribunal in the case of Studio Kamalalaya v. Commercial Tax Officer reported in 89 STC 307.',
	(int) 14 => '<p>12. In the case of Bavens v. Onion of India report in 97 STC 161, learned Judges held that when a photographer takes a photograph of his customer, he develops the negative and supplies positive prints in the desired size to the customer. In doing so the photographer uses his own camera and his own film. The negative belongs to the photographer and not to the customer. No basic goods are provided by the customer which are subjected to processing by the photographer so as to make the contract a works contract. There is no accretion to goods or property or the nucleus of a property which belongs to the customer. It is the skill of the photographer which is most important to get the desired result.',
	(int) 15 => '<p>13. Hon'ble Karnataka High Court followed the same principle in the case of Keshoram Surlndranath Photo-mag Pvt. Ltd. v. Assistant Commissioner of Commercial Taxes reported in 121 STC 175. In that judgment, learned Judges of the Karnataka High Court relied on the judgment of the Supreme Court in B.C. Kame's case and came to the conclusion that in the job of the photographer in supplying positive prints to his customer, no works contract is involved and photographs are not marketable or saleable commodity and as such no tax can be levied on it.',
	(int) 16 => '<p>14. Against the said judgment of the Karnataka High Court, the State of Karnataka High Court filed a S.L.P. before the Hon'ble Supreme Court bearing SLP Nos. 6136-6163 of 2000 and the Hon'ble Supreme Court dismissed the SLP on 20th April, 2000.',
	(int) 17 => '<p>15. In the case of Rainbow Colour Lab v. State of M.P. learned Judges of the Hon'ble Supreme Court reiterated its judgment in B.C. Kame's case and came to the following conclusion:',
	(int) 18 => '<p>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.',
	(int) 19 => '<p>Hon'ble Supreme Court in Bharat Sanchar Nigam Ltd. v. Union of India reported in 145 STC 91 again reiterated the principle in B.C. Kame's case and held that the work done by the photographer is only in the nature of a service contract not involving any sale of goods and held that the stand taken by the State cannot be sustained.',
	(int) 20 => '<p>16. Learned Counsel for the petitioner submitted that the photographs taken by the petitioner are not goods which can be sold and is not a marketable commodity like any other goods. When the copies of photographs are made out, they have no utility or value to any other person than the customer. It is already admitted that the papers utilized for photographs are tax paid goods. Therefore, it is contended by the learned Counsel for the petitioner that the work of photography does not come within the purview of works contract as defined in Section 2(jj) of the Orissa Sales Tax Act.',
	(int) 21 => '<p>17. Learned Counsel for the Revenue in this case virtually did not contest the submission made by the learned Counsel for the petitioner and in support of his contention, learned Counsel for the Revenue relied on a decision of the Supreme Court in the case of Imagic Creative Pvt. Ltd. v. Commissioner of Commercial Taxes and Ors. reported in (2008) 10 RC 236. In that judgment, learned Judges held that since the contract in question is a service contract, it is difficult to hold that in a case of this nature, sales tax would be payable on the value of the entire contract irrespective of the element of service provided.',
	(int) 22 => '<p>For the reasons discussed above, we answer the first question in the negative and the second question, in the affirmative. We thus answer both the questions in favour of the assessee and against the Revenue.',
	(int) 23 => '<p>The three revision applications are thus disposed of.',
	(int) 24 => '<p>No costs.',
	(int) 25 => '<p>B.N. Mahapatra, J.',
	(int) 26 => '<p>18. I agree.<p>',
	(int) 27 => '<p>'
)
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(i) Whether on the facts and in the circumstances of the case, the Tribunal is right to held that tax is exigible for photographs as execution of works contract ?

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			'casename' => 'Studio Sujata Vs. Commissioner of Sales Tax',
			'casenote' => 'Sales Tax - Assessment - Contract of Sale - Section 12 (5) of Orissa Sales Tax 1947 - Petitioner carries on business of processing and developing photography - Revenue assessed petitioner under Section 12(5) of Act on ground that activities of petitioner can be called works contract - Petitioner approached to Assistant of Sales Tax on ground that there is no contract of sale between the petitioner and the client, it is only service - Dismissed and affirmed by Tribunal - Hence present petition - Whether Tribunal is right to held that tax is exigible for photographs as execution of works contract or not? - Held, as per precedent laid down by Supreme Court in case of Sales Tax Officer v. B.C. Kame that photographer takes photograph and develops negatives and does other photographic work and thereafter supplies prints to his client - By doing so he cannot be said to enter into contract for sale of goods - Therefore, job of photographer is contract for work and labour and it is not contract of sale - Revenue committed mistake in assessing petitioner under Section 12(5) of Act on basis of contract of sale - Petition disposed of accordingly  - STATE FINANCIAL CORPORATIONS ACT, 1951 [63/1951]. Section 29; [P.K. Tripathy, A.K. Parichha & N.Prusty, JJ] Discharge of loan  Orissa Forest Act (14 of 1972), Section 56  Confiscation of vehicle - Held, The Authorities under Section 56 of the Orissa Forest Act, 1972 are not obliged to release the vehicle from the confiscation proceeding or to pay the sale proceeds of the vehicle after the order of confiscation in favour of Orissa State Financial Corporation when such vehicles were purchased on being financed by the Orissa State Financial Corporation and the loan had not been liquidated by the date of the seizure/confiscation of the vehicle. Concept of first charge or second charge has no applicability when the vehicle is not otherwise disposed of to determine the liabilities of the loanee. On the other hand the vehicle having been found indulged in forest offences was made subject matter of a confiscation proceedings, and therefore, the procedure followed for confiscation of the vehicle and for its sale is punitive in nature and not with a view to give benefit to anybody including the Department which initiated the confiscation proceeding. Apart from that, the claim of the Orissa State Financial Corporation as against its loanee (who had taken the vehicle on hire- purchase agreement) brings the loanee and the sureties within the default clause under the State Financial Corporation Act, 1951 or the heirs and successors of such persons. Procedure is provided in the Act, 1951 and the Rules thereof about the manner in which such loan is to be recovered, and in that context only the vehicle under the hire-purchase agreement is placed as the first charge. If such property is not available for any reason, then the loan is not automatically waived or the loanee and his sureties are not automatically redeemed of the liabilities to repay. The Financial Corporation is concerned with repayment of loan either from the property or persons offered as surety. Thus, a vehicle, which is subject matter of confiscation proceeding under the Act, 1872, being not available to the Orissa State Financial Corporation for adjustment of the unpaid loan, that does not at all bring out an anomalous situation so as to defeat the right of the Orissa State Financial Corporation. Agreement between the Orissa State Financial Corporation and the loanee is a pure and simple contract governed by the provisions of the Contract Act, 1872 read with the provisions in the Act, 1951 and its Rules. On the other hand, a confiscation proceeding under the Act, 1972 is punitive in nature for commission of a forest offence. Thus, by virtue of the provision in Section 56 read with Section 64 (2) of the Act, 1972, the action taken for confiscation of the vehicle cannot be extended to grant protection of the loan advanced by Orissa State Financial Corporation. By doing that it amounts to grant premium to the pick-pockets in as much as, by making payment of the confiscation amount in favour of the Orissa State Financial Corporation the loan burden of the accused of the forest offence is reduced to the extent of the sale proceeds of the vehicle. In other words, on payment of the sale proceeds of the confiscation proceeding to the Orissa State Financial Corporation towards discharge of the loan account of the accused of a forest offence, it would lead to a system to reward him by repayment of his loan. Then it does not become a penalty nor the action become punitive, but it remains as a reward to the accused of forest offence. Such a concept is totally not conceivable from any provision in the Act, 1972 or the Act, 1951. [AIR 2002 Orissa 130 Overruled]. -- STATE FINANCIAL CORPORATIONS ACT, 1951. 
Section 29; Discharge of loan  Orissa Forest Act (14 of 1972), Section 56  Confiscation of vehicle - Held, The Authorities under Section 56 of the Orissa Forest Act, 1972 are not obliged to release the vehicle from the confiscation proceeding or to pay the sale proceeds of the vehicle after the order of confiscation in favour of Orissa State Financial Corporation when such vehicles were purchased on being financed by the Orissa State Financial Corporation and the loan had not been liquidated by the date of the seizure/confiscation of the vehicle. Concept of first charge or second charge has no applicability when the vehicle is not otherwise disposed of to determine the liabilities of the loanee. On the other hand the vehicle having been found indulged in forest offences was made subject matter of a confiscation proceedings, and therefore, the procedure followed for confiscation of the vehicle and for its sale is punitive in nature and not with a view to give benefit to anybody including the Department which initiated the confiscation proceeding. Apart from that, the claim of the Orissa State Financial Corporation as against its loanee (who had taken the vehicle on hire- purchase agreement) brings the loanee and the sureties within the default clause under the State Financial Corporation Act, 1951 or the heirs and successors of such persons. Procedure is provided in the Act, 1951 and the Rules thereof about the manner in which such loan is to be recovered, and in that context only the vehicle under the hire-purchase agreement is placed as the first charge. If such property is not available for any reason, then the loan is not automatically waived or the loanee and his sureties are not automatically redeemed of the liabilities to repay. The Financial Corporation is concerned with repayment of loan either from the property or persons offered as surety. Thus, a vehicle, which is subject matter of confiscation proceeding under the Act, 1872, being not available to the Orissa State Financial Corporation for adjustment of the unpaid loan, that does not at all bring out an anomalous situation so as to defeat the right of the Orissa State Financial Corporation. Agreement between the Orissa State Financial Corporation and the loanee is a pure and simple contract governed by the provisions of the Contract Act, 1872 read with the provisions in the Act, 1951 and its Rules. On the other hand, a confiscation proceeding under the Act, 1972 is punitive in nature for commission of a forest offence. Thus, by virtue of the provision in Section 56 read with Section 64 (2) of the Act, 1972, the action taken for confiscation of the vehicle cannot be extended to grant protection of the loan advanced by Orissa State Financial Corporation. By doing that it amounts to grant premium to the pick-pockets in as much as, by making payment of the confiscation amount in favour of the Orissa State Financial Corporation the loan burden of the accused of the forest offence is reduced to the extent of the sale proceeds of the vehicle. In other words, on payment of the sale proceeds of the confiscation proceeding to the Orissa State Financial Corporation towards discharge of the loan account of the accused of a forest offence, it would lead to a system to reward him by repayment of his loan. Then it does not become a penalty nor the action become punitive, but it remains as a reward to the accused of forest offence. Such a concept is totally not conceivable from any provision in the Act, 1972 or the Act, 1951. [AIR 2002 Orissa 130 Overruled].  -  In that case, the stand of the Revenue was disapproved by the Orissa High Court. 16. Learned Counsel for the petitioner submitted that the photographs taken by the petitioner are not goods which can be sold and is not a marketable commodity like any other goods.',
			'caseanalysis' => null,
			'casesref' => 'Imagic Creative Pvt. Ltd. v. Commissioner of Commercial Taxes and Ors.;',
			'citingcases' => '',
			'counselplain' => '',
			'counseldef' => '',
			'court' => 'Orissa',
			'court_type' => 'HC',
			'decidedon' => '2008-04-02',
			'deposition' => '',
			'favorof' => null,
			'findings' => null,
			'judge' => ' A.K. Ganguly, C.J. and; B.N. Mahapatra, J.',
			'judgement' => '<p style="text-align: justify;">A.K. Ganguly, C.J.</p><p style="text-align: justify;">1. Initially three S.J.Cs. being S.J.C. Nos. 10 of 1997, 8 of 1997 and 9 of 1997 were filed and subsequently renumbered as STREV Nos. 212, 214 and 216 of 2007 respectively. In view of the common questions of facts and law, all the three Revision Applications are heard and disposed of together.</p><p style="text-align: justify;">2. The following questions of law arising out of the order passed by the Orissa Sales Tax Tribunal on 8.12.1993 in Second Appeal Nos. 3345 to 3350 of 1991-92 have been referred to this Hon'ble High Court in terms of the order of this Hon'ble Court dated 24.2.1997. The questions are:</p><p style="text-align: justify;">(i) Whether on the facts and in the circumstances of the case, the Tribunal is right to held that tax is exigible for photographs as execution of works contract ?</p><p style="text-align: justify;">(ii) Whether on the facts and in the circumstances of the case, the conclusion of the Tribunal is perverse due to non-consideration and mis-consideration of facts and law and, therefore, it is liable to be set aside for re-hearing ?</p><p style="text-align: justify;">3. The materials facts out of which those questions arise are that the petitioner carries on the business of processing and developing photography. In the usual course of business, the petitioner takes photographs of persons or of family and then develops the negative by employing his skill and labour and then supplies the photographs to the clients. These photographs which are prepared by the petitioner are not commercial items because they are neither purchased nor sold. However, to develop these photographs employment of skill and labour is essential. It may be mentioned that petitioner does not carry on any sale of photographs of national leaders, God and Goddess.</p><p style="text-align: justify;">4. After the passing of 46th amendment of the Constitution of India and consequent amendments thereto in Orissa Sales Tax Act (OST Act), the Sales Tax Officer, Bhubaneswar-II Circle, Bhubaneswar sent notices to assess the petitioner as an unregistered dealer under Section 12 (5) of the OST Act, inter alia, contending that the petitioner's activities can be called 'works contract'. Pursuant to said notice, the petitioner gave its reply and appeared before the Sales Tax Officer and produced the books of account and documents including Receipts, Purchase Memos, Vouchers, Ledger and thereby denied its liability under the OST Act. The petitioner also submitted objection petitions on various dates i.e. 28.12.1985, 10.1.1986, 20.2.1986 and 29.2.1988 contending, inter alia, that the petitioner has no sales tax liability under OST Act and the notices, which were issued, are without jurisdiction.</p><p style="text-align: justify;">5. Ignoring the said objections of the petitioner, the Sales Tax Officer, Bhubaneswar-II Circle, Bhubaneswar assessed the petitioner as an unregistered dealer, inter alia, holding that the petitioner is liable to pay sales tax as petitioner has been alleged to carry activities of 'works contract'. Therefore, orders of assessment being dated 29.2.1988 for the years 1984-85 (9/84 to 3/85), 1985-86 and 1986- 87 under Section 12(5) of OST Act and under Rule 5 of the Orissa Additional Sales Tax Rules, 1975 were passed and a tax of Rs. 20,765.00 and penalty of Rs. 5,000.00 totalling to Rs. 25,765.00 was imposed on the petitioner. The petitioner then filed the First Appeal before the learned Assistant Commissioner of Sales Tax. The First Appellate Authority by an order dated 27.9.1991 confirmed the levy of tax under the OST Act, but reduced the penalty to Rs. 1250.00. Thereupon, the petitioner filed the Second Appeal before the Orissa Sales Tax Tribunal, Cuttack. The said Tribunal heard the Second Appeal and in course of hearing, the petitioner raised various contentions. Ultimately, the Tribunal upheld the levy of tax but deleted the penalty.</p><p style="text-align: justify;">6. Thereafter the petitioner came up with a reference application under Section 24(1) of the Orissa Sales Tax Act framing certain questions for being referred to the Hon'ble High Court. The said prayer of the petitioner was rejected by the Tribunal. Then the petitioner moved Hon'ble High Court under Section 24(2)(b) of the Orissa Sales Tax Act, 1947 whereupon the High Court directed the Tribunal to state to case and refer the questions under Section 24(3) of the OST Act for a decision of the High Court.</p><p style="text-align: justify;">7. Accordingly, the Tribunal stated the case and referred the aforesaid questions for a decision of the High Court.</p><p style="text-align: justify;">8. Learned Counsel for the petitioner before the High Court submitted that in the transaction in question, there is no contract of sale between the petitioner and the client. It is only a contract of service and the photographs, which the petitioner produced by supplying the same has no commercial value and are not marketable. So, there is no question of a works contract. It is the consistent stand of the petitioner that the present photographs which are produced by the petitioner have no utility or value to any other person than the customer. By developing such photographs, the petitioner only renders service to his customers. The customer pays for the service rendered by the petitioner. It is the contention of the petitioner that his activity is similar to that of consulting firm preparing plan and sketches pursuant to client's specification or professional giving opinion on papers. All those activities are done to serve the client. Therefore, this does not come within the purview of the definition of 'goods', 'sale', 'dealer' or 'works contract'. It is the petitioner's case that he purchased the goods, namely, papers on payment of sales tax. Further levy of tax on the personal service rendered to the client of the petitioner will amount to double taxation. It is also the contention of the petitioner that the paper which is used in the photography are incidental and insignificant.</p><p style="text-align: justify;">9. In support of its contention, learned Counsel for the petitioner has relied on several judgments. First reliance was place on the judgment of the Supreme Court in the case of Sales Tax Officer v. B.C. Kame reported in 39 STC 237(SC). At page 241 of the report, learned Judges of the Supreme Court held that a photographer takes the photograph and develops the negatives and does other photographic work and thereafter supplies the prints to his client. By doing so he cannot be said to enter into a contract for sale of goods. On the other hand, the contract is for use of skill and labour by the photographer to bring about the desired result. Learned Judges held that the job of a photographer is a contract for work and labour and it is not a contract of sale.</p><p style="text-align: justify;">10. Reliance was also placed on a judgment of this High Court in the case of Photo Emporium v. Addl. District Magistrate reported in 77 STC 199 in which this High Court followed the ratio of the judgment of the Supreme Court in the case of B.C. Kame. In that case, the stand of the Revenue was disapproved by the Orissa High Court.</p><p style="text-align: justify;">11. Similar view was taken in 110 STC 145 in the case of Foto Colour Labs Pvt. Ltd. v. Commercial Taxes Officer where the Tribunal held that the transfer of paper in the photograph is purely incidental and payment is only taken to give positive prints and not to get the photo papers. Therefore, the contract in between the petitioner and his client is not a contract of sale, and neither directly or indirectly works contract is involved in the supply of photo papers. Similar view was taken by the West Bengal Taxation Tribunal in the case of Studio Kamalalaya v. Commercial Tax Officer reported in 89 STC 307.</p><p style="text-align: justify;">12. In the case of Bavens v. Onion of India report in 97 STC 161, learned Judges held that when a photographer takes a photograph of his customer, he develops the negative and supplies positive prints in the desired size to the customer. In doing so the photographer uses his own camera and his own film. The negative belongs to the photographer and not to the customer. No basic goods are provided by the customer which are subjected to processing by the photographer so as to make the contract a works contract. There is no accretion to goods or property or the nucleus of a property which belongs to the customer. It is the skill of the photographer which is most important to get the desired result.</p><p style="text-align: justify;">13. Hon'ble Karnataka High Court followed the same principle in the case of Keshoram Surlndranath Photo-mag Pvt. Ltd. v. Assistant Commissioner of Commercial Taxes reported in 121 STC 175. In that judgment, learned Judges of the Karnataka High Court relied on the judgment of the Supreme Court in B.C. Kame's case and came to the conclusion that in the job of the photographer in supplying positive prints to his customer, no works contract is involved and photographs are not marketable or saleable commodity and as such no tax can be levied on it.</p><p style="text-align: justify;">14. Against the said judgment of the Karnataka High Court, the State of Karnataka High Court filed a S.L.P. before the Hon'ble Supreme Court bearing SLP Nos. 6136-6163 of 2000 and the Hon'ble Supreme Court dismissed the SLP on 20th April, 2000.</p><p style="text-align: justify;">15. In the case of Rainbow Colour Lab v. State of M.P. learned Judges of the Hon'ble Supreme Court reiterated its judgment in B.C. Kame's case and came to the following conclusion:</p><p style="text-align: justify;">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.</p><p style="text-align: justify;">Hon'ble Supreme Court in Bharat Sanchar Nigam Ltd. v. Union of India reported in 145 STC 91 again reiterated the principle in B.C. Kame's case and held that the work done by the photographer is only in the nature of a service contract not involving any sale of goods and held that the stand taken by the State cannot be sustained.</p><p style="text-align: justify;">16. Learned Counsel for the petitioner submitted that the photographs taken by the petitioner are not goods which can be sold and is not a marketable commodity like any other goods. When the copies of photographs are made out, they have no utility or value to any other person than the customer. It is already admitted that the papers utilized for photographs are tax paid goods. Therefore, it is contended by the learned Counsel for the petitioner that the work of photography does not come within the purview of works contract as defined in Section 2(jj) of the Orissa Sales Tax Act.</p><p style="text-align: justify;">17. Learned Counsel for the Revenue in this case virtually did not contest the submission made by the learned Counsel for the petitioner and in support of his contention, learned Counsel for the Revenue relied on a decision of the Supreme Court in the case of Imagic Creative Pvt. Ltd. v. Commissioner of Commercial Taxes and Ors. reported in (2008) 10 RC 236. In that judgment, learned Judges held that since the contract in question is a service contract, it is difficult to hold that in a case of this nature, sales tax would be payable on the value of the entire contract irrespective of the element of service provided.</p><p style="text-align: justify;">For the reasons discussed above, we answer the first question in the negative and the second question, in the affirmative. We thus answer both the questions in favour of the assessee and against the Revenue.</p><p style="text-align: justify;">The three revision applications are thus disposed of.</p><p style="text-align: justify;">No costs.</p><p style="text-align: justify;">B.N. Mahapatra, J.</p><p style="text-align: justify;">18. I agree.<p style="text-align: justify;"></p><p style="text-align: justify;">',
			'observations' => null,
			'overruledby' => null,
			'prhistory' => '',
			'pubs' => '106(2008)CLT317; 2008(I)OLR953; (2008)17VST289(Orissa)',
			'ratiodecidendi' => '',
			'respondent' => 'Commissioner of Sales Tax',
			'sub' => 'Sales Tax/VAT',
			'link' => null,
			'circuit' => null
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$title_for_layout = 'Studio Sujata Vs Commissioner of Sales Tax - Citation 531271 - Court Judgment | '
$desc = array(
	'Judgement' => array(
		'id' => '531271',
		'acts' => '',
		'appealno' => '',
		'appellant' => 'Studio Sujata',
		'authreffered' => '',
		'casename' => 'Studio Sujata Vs. Commissioner of Sales Tax',
		'casenote' => 'Sales Tax - Assessment - Contract of Sale - Section 12 (5) of Orissa Sales Tax 1947 - Petitioner carries on business of processing and developing photography - Revenue assessed petitioner under Section 12(5) of Act on ground that activities of petitioner can be called works contract - Petitioner approached to Assistant of Sales Tax on ground that there is no contract of sale between the petitioner and the client, it is only service - Dismissed and affirmed by Tribunal - Hence present petition - Whether Tribunal is right to held that tax is exigible for photographs as execution of works contract or not? - Held, as per precedent laid down by Supreme Court in case of Sales Tax Officer v. B.C. Kame that photographer takes photograph and develops negatives and does other photographic work and thereafter supplies prints to his client - By doing so he cannot be said to enter into contract for sale of goods - Therefore, job of photographer is contract for work and labour and it is not contract of sale - Revenue committed mistake in assessing petitioner under Section 12(5) of Act on basis of contract of sale - Petition disposed of accordingly  - STATE FINANCIAL CORPORATIONS ACT, 1951 [63/1951]. Section 29; [P.K. Tripathy, A.K. Parichha & N.Prusty, JJ] Discharge of loan  Orissa Forest Act (14 of 1972), Section 56  Confiscation of vehicle - Held, The Authorities under Section 56 of the Orissa Forest Act, 1972 are not obliged to release the vehicle from the confiscation proceeding or to pay the sale proceeds of the vehicle after the order of confiscation in favour of Orissa State Financial Corporation when such vehicles were purchased on being financed by the Orissa State Financial Corporation and the loan had not been liquidated by the date of the seizure/confiscation of the vehicle. Concept of first charge or second charge has no applicability when the vehicle is not otherwise disposed of to determine the liabilities of the loanee. On the other hand the vehicle having been found indulged in forest offences was made subject matter of a confiscation proceedings, and therefore, the procedure followed for confiscation of the vehicle and for its sale is punitive in nature and not with a view to give benefit to anybody including the Department which initiated the confiscation proceeding. Apart from that, the claim of the Orissa State Financial Corporation as against its loanee (who had taken the vehicle on hire- purchase agreement) brings the loanee and the sureties within the default clause under the State Financial Corporation Act, 1951 or the heirs and successors of such persons. Procedure is provided in the Act, 1951 and the Rules thereof about the manner in which such loan is to be recovered, and in that context only the vehicle under the hire-purchase agreement is placed as the first charge. If such property is not available for any reason, then the loan is not automatically waived or the loanee and his sureties are not automatically redeemed of the liabilities to repay. The Financial Corporation is concerned with repayment of loan either from the property or persons offered as surety. Thus, a vehicle, which is subject matter of confiscation proceeding under the Act, 1872, being not available to the Orissa State Financial Corporation for adjustment of the unpaid loan, that does not at all bring out an anomalous situation so as to defeat the right of the Orissa State Financial Corporation. Agreement between the Orissa State Financial Corporation and the loanee is a pure and simple contract governed by the provisions of the Contract Act, 1872 read with the provisions in the Act, 1951 and its Rules. On the other hand, a confiscation proceeding under the Act, 1972 is punitive in nature for commission of a forest offence. Thus, by virtue of the provision in Section 56 read with Section 64 (2) of the Act, 1972, the action taken for confiscation of the vehicle cannot be extended to grant protection of the loan advanced by Orissa State Financial Corporation. By doing that it amounts to grant premium to the pick-pockets in as much as, by making payment of the confiscation amount in favour of the Orissa State Financial Corporation the loan burden of the accused of the forest offence is reduced to the extent of the sale proceeds of the vehicle. In other words, on payment of the sale proceeds of the confiscation proceeding to the Orissa State Financial Corporation towards discharge of the loan account of the accused of a forest offence, it would lead to a system to reward him by repayment of his loan. Then it does not become a penalty nor the action become punitive, but it remains as a reward to the accused of forest offence. Such a concept is totally not conceivable from any provision in the Act, 1972 or the Act, 1951. [AIR 2002 Orissa 130 Overruled]. -- STATE FINANCIAL CORPORATIONS ACT, 1951. 
Section 29; Discharge of loan  Orissa Forest Act (14 of 1972), Section 56  Confiscation of vehicle - Held, The Authorities under Section 56 of the Orissa Forest Act, 1972 are not obliged to release the vehicle from the confiscation proceeding or to pay the sale proceeds of the vehicle after the order of confiscation in favour of Orissa State Financial Corporation when such vehicles were purchased on being financed by the Orissa State Financial Corporation and the loan had not been liquidated by the date of the seizure/confiscation of the vehicle. Concept of first charge or second charge has no applicability when the vehicle is not otherwise disposed of to determine the liabilities of the loanee. On the other hand the vehicle having been found indulged in forest offences was made subject matter of a confiscation proceedings, and therefore, the procedure followed for confiscation of the vehicle and for its sale is punitive in nature and not with a view to give benefit to anybody including the Department which initiated the confiscation proceeding. Apart from that, the claim of the Orissa State Financial Corporation as against its loanee (who had taken the vehicle on hire- purchase agreement) brings the loanee and the sureties within the default clause under the State Financial Corporation Act, 1951 or the heirs and successors of such persons. Procedure is provided in the Act, 1951 and the Rules thereof about the manner in which such loan is to be recovered, and in that context only the vehicle under the hire-purchase agreement is placed as the first charge. If such property is not available for any reason, then the loan is not automatically waived or the loanee and his sureties are not automatically redeemed of the liabilities to repay. The Financial Corporation is concerned with repayment of loan either from the property or persons offered as surety. Thus, a vehicle, which is subject matter of confiscation proceeding under the Act, 1872, being not available to the Orissa State Financial Corporation for adjustment of the unpaid loan, that does not at all bring out an anomalous situation so as to defeat the right of the Orissa State Financial Corporation. Agreement between the Orissa State Financial Corporation and the loanee is a pure and simple contract governed by the provisions of the Contract Act, 1872 read with the provisions in the Act, 1951 and its Rules. On the other hand, a confiscation proceeding under the Act, 1972 is punitive in nature for commission of a forest offence. Thus, by virtue of the provision in Section 56 read with Section 64 (2) of the Act, 1972, the action taken for confiscation of the vehicle cannot be extended to grant protection of the loan advanced by Orissa State Financial Corporation. By doing that it amounts to grant premium to the pick-pockets in as much as, by making payment of the confiscation amount in favour of the Orissa State Financial Corporation the loan burden of the accused of the forest offence is reduced to the extent of the sale proceeds of the vehicle. In other words, on payment of the sale proceeds of the confiscation proceeding to the Orissa State Financial Corporation towards discharge of the loan account of the accused of a forest offence, it would lead to a system to reward him by repayment of his loan. Then it does not become a penalty nor the action become punitive, but it remains as a reward to the accused of forest offence. Such a concept is totally not conceivable from any provision in the Act, 1972 or the Act, 1951. [AIR 2002 Orissa 130 Overruled].  -  In that case, the stand of the Revenue was disapproved by the Orissa High Court. 16. Learned Counsel for the petitioner submitted that the photographs taken by the petitioner are not goods which can be sold and is not a marketable commodity like any other goods.',
		'caseanalysis' => null,
		'casesref' => 'Imagic Creative Pvt. Ltd. v. Commissioner of Commercial Taxes and Ors.;',
		'citingcases' => '',
		'counselplain' => '',
		'counseldef' => '',
		'court' => 'Orissa',
		'court_type' => 'HC',
		'decidedon' => '2008-04-02',
		'deposition' => '',
		'favorof' => null,
		'findings' => null,
		'judge' => ' A.K. Ganguly, C.J. and; B.N. Mahapatra, J.',
		'judgement' => '<p>A.K. Ganguly, C.J.</p><p>1. Initially three S.J.Cs. being S.J.C. Nos. 10 of 1997, 8 of 1997 and 9 of 1997 were filed and subsequently renumbered as STREV Nos. 212, 214 and 216 of 2007 respectively. In view of the common questions of facts and law, all the three Revision Applications are heard and disposed of together.</p><p>2. The following questions of law arising out of the order passed by the Orissa Sales Tax Tribunal on 8.12.1993 in Second Appeal Nos. 3345 to 3350 of 1991-92 have been referred to this Hon'ble High Court in terms of the order of this Hon'ble Court dated 24.2.1997. The questions are:</p><p>(i) Whether on the facts and in the circumstances of the case, the Tribunal is right to held that tax is exigible for photographs as execution of works contract ?</p><p>(ii) Whether on the facts and in the circumstances of the case, the conclusion of the Tribunal is perverse due to non-consideration and mis-consideration of facts and law and, therefore, it is liable to be set aside for re-hearing ?</p><p>3. The materials facts out of which those questions arise are that the petitioner carries on the business of processing and developing photography. In the usual course of business, the petitioner takes photographs of persons or of family and then develops the negative by employing his skill and labour and then supplies the photographs to the clients. These photographs which are prepared by the petitioner are not commercial items because they are neither purchased nor sold. However, to develop these photographs employment of skill and labour is essential. It may be mentioned that petitioner does not carry on any sale of photographs of national leaders, God and Goddess.</p><p>4. After the passing of 46th amendment of the Constitution of India and consequent amendments thereto in Orissa Sales Tax Act (OST Act), the Sales Tax Officer, Bhubaneswar-II Circle, Bhubaneswar sent notices to assess the petitioner as an unregistered dealer under Section 12 (5) of the OST Act, inter alia, contending that the petitioner's activities can be called 'works contract'. Pursuant to said notice, the petitioner gave its reply and appeared before the Sales Tax Officer and produced the books of account and documents including Receipts, Purchase Memos, Vouchers, Ledger and thereby denied its liability under the OST Act. The petitioner also submitted objection petitions on various dates i.e. 28.12.1985, 10.1.1986, 20.2.1986 and 29.2.1988 contending, inter alia, that the petitioner has no sales tax liability under OST Act and the notices, which were issued, are without jurisdiction.</p><p>5. Ignoring the said objections of the petitioner, the Sales Tax Officer, Bhubaneswar-II Circle, Bhubaneswar assessed the petitioner as an unregistered dealer, inter alia, holding that the petitioner is liable to pay sales tax as petitioner has been alleged to carry activities of 'works contract'. Therefore, orders of assessment being dated 29.2.1988 for the years 1984-85 (9/84 to 3/85), 1985-86 and 1986- 87 under Section 12(5) of OST Act and under Rule 5 of the Orissa Additional Sales Tax Rules, 1975 were passed and a tax of Rs. 20,765.00 and penalty of Rs. 5,000.00 totalling to Rs. 25,765.00 was imposed on the petitioner. The petitioner then filed the First Appeal before the learned Assistant Commissioner of Sales Tax. The First Appellate Authority by an order dated 27.9.1991 confirmed the levy of tax under the OST Act, but reduced the penalty to Rs. 1250.00. Thereupon, the petitioner filed the Second Appeal before the Orissa Sales Tax Tribunal, Cuttack. The said Tribunal heard the Second Appeal and in course of hearing, the petitioner raised various contentions. Ultimately, the Tribunal upheld the levy of tax but deleted the penalty.</p><p>6. Thereafter the petitioner came up with a reference application under Section 24(1) of the Orissa Sales Tax Act framing certain questions for being referred to the Hon'ble High Court. The said prayer of the petitioner was rejected by the Tribunal. Then the petitioner moved Hon'ble High Court under Section 24(2)(b) of the Orissa Sales Tax Act, 1947 whereupon the High Court directed the Tribunal to state to case and refer the questions under Section 24(3) of the OST Act for a decision of the High Court.</p><p>7. Accordingly, the Tribunal stated the case and referred the aforesaid questions for a decision of the High Court.</p><p>8. Learned Counsel for the petitioner before the High Court submitted that in the transaction in question, there is no contract of sale between the petitioner and the client. It is only a contract of service and the photographs, which the petitioner produced by supplying the same has no commercial value and are not marketable. So, there is no question of a works contract. It is the consistent stand of the petitioner that the present photographs which are produced by the petitioner have no utility or value to any other person than the customer. By developing such photographs, the petitioner only renders service to his customers. The customer pays for the service rendered by the petitioner. It is the contention of the petitioner that his activity is similar to that of consulting firm preparing plan and sketches pursuant to client's specification or professional giving opinion on papers. All those activities are done to serve the client. Therefore, this does not come within the purview of the definition of 'goods', 'sale', 'dealer' or 'works contract'. It is the petitioner's case that he purchased the goods, namely, papers on payment of sales tax. Further levy of tax on the personal service rendered to the client of the petitioner will amount to double taxation. It is also the contention of the petitioner that the paper which is used in the photography are incidental and insignificant.</p><p>9. In support of its contention, learned Counsel for the petitioner has relied on several judgments. First reliance was place on the judgment of the Supreme Court in the case of Sales Tax Officer v. B.C. Kame reported in 39 STC 237(SC). At page 241 of the report, learned Judges of the Supreme Court held that a photographer takes the photograph and develops the negatives and does other photographic work and thereafter supplies the prints to his client. By doing so he cannot be said to enter into a contract for sale of goods. On the other hand, the contract is for use of skill and labour by the photographer to bring about the desired result. Learned Judges held that the job of a photographer is a contract for work and labour and it is not a contract of sale.</p><p>10. Reliance was also placed on a judgment of this High Court in the case of Photo Emporium v. Addl. District Magistrate reported in 77 STC 199 in which this High Court followed the ratio of the judgment of the Supreme Court in the case of B.C. Kame. In that case, the stand of the Revenue was disapproved by the Orissa High Court.</p><p>11. Similar view was taken in 110 STC 145 in the case of Foto Colour Labs Pvt. Ltd. v. Commercial Taxes Officer where the Tribunal held that the transfer of paper in the photograph is purely incidental and payment is only taken to give positive prints and not to get the photo papers. Therefore, the contract in between the petitioner and his client is not a contract of sale, and neither directly or indirectly works contract is involved in the supply of photo papers. Similar view was taken by the West Bengal Taxation Tribunal in the case of Studio Kamalalaya v. Commercial Tax Officer reported in 89 STC 307.</p><p>12. In the case of Bavens v. Onion of India report in 97 STC 161, learned Judges held that when a photographer takes a photograph of his customer, he develops the negative and supplies positive prints in the desired size to the customer. In doing so the photographer uses his own camera and his own film. The negative belongs to the photographer and not to the customer. No basic goods are provided by the customer which are subjected to processing by the photographer so as to make the contract a works contract. There is no accretion to goods or property or the nucleus of a property which belongs to the customer. It is the skill of the photographer which is most important to get the desired result.</p><p>13. Hon'ble Karnataka High Court followed the same principle in the case of Keshoram Surlndranath Photo-mag Pvt. Ltd. v. Assistant Commissioner of Commercial Taxes reported in 121 STC 175. In that judgment, learned Judges of the Karnataka High Court relied on the judgment of the Supreme Court in B.C. Kame's case and came to the conclusion that in the job of the photographer in supplying positive prints to his customer, no works contract is involved and photographs are not marketable or saleable commodity and as such no tax can be levied on it.</p><p>14. Against the said judgment of the Karnataka High Court, the State of Karnataka High Court filed a S.L.P. before the Hon'ble Supreme Court bearing SLP Nos. 6136-6163 of 2000 and the Hon'ble Supreme Court dismissed the SLP on 20th April, 2000.</p><p>15. In the case of Rainbow Colour Lab v. State of M.P. learned Judges of the Hon'ble Supreme Court reiterated its judgment in B.C. Kame's case and came to the following conclusion:</p><p>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.</p><p>Hon'ble Supreme Court in Bharat Sanchar Nigam Ltd. v. Union of India reported in 145 STC 91 again reiterated the principle in B.C. Kame's case and held that the work done by the photographer is only in the nature of a service contract not involving any sale of goods and held that the stand taken by the State cannot be sustained.</p><p>16. Learned Counsel for the petitioner submitted that the photographs taken by the petitioner are not goods which can be sold and is not a marketable commodity like any other goods. When the copies of photographs are made out, they have no utility or value to any other person than the customer. It is already admitted that the papers utilized for photographs are tax paid goods. Therefore, it is contended by the learned Counsel for the petitioner that the work of photography does not come within the purview of works contract as defined in Section 2(jj) of the Orissa Sales Tax Act.</p><p>17. Learned Counsel for the Revenue in this case virtually did not contest the submission made by the learned Counsel for the petitioner and in support of his contention, learned Counsel for the Revenue relied on a decision of the Supreme Court in the case of Imagic Creative Pvt. Ltd. v. Commissioner of Commercial Taxes and Ors. reported in (2008) 10 RC 236. In that judgment, learned Judges held that since the contract in question is a service contract, it is difficult to hold that in a case of this nature, sales tax would be payable on the value of the entire contract irrespective of the element of service provided.</p><p>For the reasons discussed above, we answer the first question in the negative and the second question, in the affirmative. We thus answer both the questions in favour of the assessee and against the Revenue.</p><p>The three revision applications are thus disposed of.</p><p>No costs.</p><p>B.N. Mahapatra, J.</p><p>18. I agree.<p></p><p>',
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	(int) 0 => '<p>A.K. Ganguly, C.J.',
	(int) 1 => '<p>1. Initially three S.J.Cs. being S.J.C. Nos. 10 of 1997, 8 of 1997 and 9 of 1997 were filed and subsequently renumbered as STREV Nos. 212, 214 and 216 of 2007 respectively. In view of the common questions of facts and law, all the three Revision Applications are heard and disposed of together.',
	(int) 2 => '<p>2. The following questions of law arising out of the order passed by the Orissa Sales Tax Tribunal on 8.12.1993 in Second Appeal Nos. 3345 to 3350 of 1991-92 have been referred to this Hon'ble High Court in terms of the order of this Hon'ble Court dated 24.2.1997. The questions are:',
	(int) 3 => '<p>(i) Whether on the facts and in the circumstances of the case, the Tribunal is right to held that tax is exigible for photographs as execution of works contract ?',
	(int) 4 => '<p>(ii) Whether on the facts and in the circumstances of the case, the conclusion of the Tribunal is perverse due to non-consideration and mis-consideration of facts and law and, therefore, it is liable to be set aside for re-hearing ?',
	(int) 5 => '<p>3. The materials facts out of which those questions arise are that the petitioner carries on the business of processing and developing photography. In the usual course of business, the petitioner takes photographs of persons or of family and then develops the negative by employing his skill and labour and then supplies the photographs to the clients. These photographs which are prepared by the petitioner are not commercial items because they are neither purchased nor sold. However, to develop these photographs employment of skill and labour is essential. It may be mentioned that petitioner does not carry on any sale of photographs of national leaders, God and Goddess.',
	(int) 6 => '<p>4. After the passing of 46th amendment of the Constitution of India and consequent amendments thereto in Orissa Sales Tax Act (OST Act), the Sales Tax Officer, Bhubaneswar-II Circle, Bhubaneswar sent notices to assess the petitioner as an unregistered dealer under Section 12 (5) of the OST Act, inter alia, contending that the petitioner's activities can be called 'works contract'. Pursuant to said notice, the petitioner gave its reply and appeared before the Sales Tax Officer and produced the books of account and documents including Receipts, Purchase Memos, Vouchers, Ledger and thereby denied its liability under the OST Act. The petitioner also submitted objection petitions on various dates i.e. 28.12.1985, 10.1.1986, 20.2.1986 and 29.2.1988 contending, inter alia, that the petitioner has no sales tax liability under OST Act and the notices, which were issued, are without jurisdiction.',
	(int) 7 => '<p>5. Ignoring the said objections of the petitioner, the Sales Tax Officer, Bhubaneswar-II Circle, Bhubaneswar assessed the petitioner as an unregistered dealer, inter alia, holding that the petitioner is liable to pay sales tax as petitioner has been alleged to carry activities of 'works contract'. Therefore, orders of assessment being dated 29.2.1988 for the years 1984-85 (9/84 to 3/85), 1985-86 and 1986- 87 under Section 12(5) of OST Act and under Rule 5 of the Orissa Additional Sales Tax Rules, 1975 were passed and a tax of Rs. 20,765.00 and penalty of Rs. 5,000.00 totalling to Rs. 25,765.00 was imposed on the petitioner. The petitioner then filed the First Appeal before the learned Assistant Commissioner of Sales Tax. The First Appellate Authority by an order dated 27.9.1991 confirmed the levy of tax under the OST Act, but reduced the penalty to Rs. 1250.00. Thereupon, the petitioner filed the Second Appeal before the Orissa Sales Tax Tribunal, Cuttack. The said Tribunal heard the Second Appeal and in course of hearing, the petitioner raised various contentions. Ultimately, the Tribunal upheld the levy of tax but deleted the penalty.',
	(int) 8 => '<p>6. Thereafter the petitioner came up with a reference application under Section 24(1) of the Orissa Sales Tax Act framing certain questions for being referred to the Hon'ble High Court. The said prayer of the petitioner was rejected by the Tribunal. Then the petitioner moved Hon'ble High Court under Section 24(2)(b) of the Orissa Sales Tax Act, 1947 whereupon the High Court directed the Tribunal to state to case and refer the questions under Section 24(3) of the OST Act for a decision of the High Court.',
	(int) 9 => '<p>7. Accordingly, the Tribunal stated the case and referred the aforesaid questions for a decision of the High Court.',
	(int) 10 => '<p>8. Learned Counsel for the petitioner before the High Court submitted that in the transaction in question, there is no contract of sale between the petitioner and the client. It is only a contract of service and the photographs, which the petitioner produced by supplying the same has no commercial value and are not marketable. So, there is no question of a works contract. It is the consistent stand of the petitioner that the present photographs which are produced by the petitioner have no utility or value to any other person than the customer. By developing such photographs, the petitioner only renders service to his customers. The customer pays for the service rendered by the petitioner. It is the contention of the petitioner that his activity is similar to that of consulting firm preparing plan and sketches pursuant to client's specification or professional giving opinion on papers. All those activities are done to serve the client. Therefore, this does not come within the purview of the definition of 'goods', 'sale', 'dealer' or 'works contract'. It is the petitioner's case that he purchased the goods, namely, papers on payment of sales tax. Further levy of tax on the personal service rendered to the client of the petitioner will amount to double taxation. It is also the contention of the petitioner that the paper which is used in the photography are incidental and insignificant.',
	(int) 11 => '<p>9. In support of its contention, learned Counsel for the petitioner has relied on several judgments. First reliance was place on the judgment of the Supreme Court in the case of Sales Tax Officer v. B.C. Kame reported in 39 STC 237(SC). At page 241 of the report, learned Judges of the Supreme Court held that a photographer takes the photograph and develops the negatives and does other photographic work and thereafter supplies the prints to his client. By doing so he cannot be said to enter into a contract for sale of goods. On the other hand, the contract is for use of skill and labour by the photographer to bring about the desired result. Learned Judges held that the job of a photographer is a contract for work and labour and it is not a contract of sale.',
	(int) 12 => '<p>10. Reliance was also placed on a judgment of this High Court in the case of Photo Emporium v. Addl. District Magistrate reported in 77 STC 199 in which this High Court followed the ratio of the judgment of the Supreme Court in the case of B.C. Kame. In that case, the stand of the Revenue was disapproved by the Orissa High Court.',
	(int) 13 => '<p>11. Similar view was taken in 110 STC 145 in the case of Foto Colour Labs Pvt. Ltd. v. Commercial Taxes Officer where the Tribunal held that the transfer of paper in the photograph is purely incidental and payment is only taken to give positive prints and not to get the photo papers. Therefore, the contract in between the petitioner and his client is not a contract of sale, and neither directly or indirectly works contract is involved in the supply of photo papers. Similar view was taken by the West Bengal Taxation Tribunal in the case of Studio Kamalalaya v. Commercial Tax Officer reported in 89 STC 307.',
	(int) 14 => '<p>12. In the case of Bavens v. Onion of India report in 97 STC 161, learned Judges held that when a photographer takes a photograph of his customer, he develops the negative and supplies positive prints in the desired size to the customer. In doing so the photographer uses his own camera and his own film. The negative belongs to the photographer and not to the customer. No basic goods are provided by the customer which are subjected to processing by the photographer so as to make the contract a works contract. There is no accretion to goods or property or the nucleus of a property which belongs to the customer. It is the skill of the photographer which is most important to get the desired result.',
	(int) 15 => '<p>13. Hon'ble Karnataka High Court followed the same principle in the case of Keshoram Surlndranath Photo-mag Pvt. Ltd. v. Assistant Commissioner of Commercial Taxes reported in 121 STC 175. In that judgment, learned Judges of the Karnataka High Court relied on the judgment of the Supreme Court in B.C. Kame's case and came to the conclusion that in the job of the photographer in supplying positive prints to his customer, no works contract is involved and photographs are not marketable or saleable commodity and as such no tax can be levied on it.',
	(int) 16 => '<p>14. Against the said judgment of the Karnataka High Court, the State of Karnataka High Court filed a S.L.P. before the Hon'ble Supreme Court bearing SLP Nos. 6136-6163 of 2000 and the Hon'ble Supreme Court dismissed the SLP on 20th April, 2000.',
	(int) 17 => '<p>15. In the case of Rainbow Colour Lab v. State of M.P. learned Judges of the Hon'ble Supreme Court reiterated its judgment in B.C. Kame's case and came to the following conclusion:',
	(int) 18 => '<p>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.',
	(int) 19 => '<p>Hon'ble Supreme Court in Bharat Sanchar Nigam Ltd. v. Union of India reported in 145 STC 91 again reiterated the principle in B.C. Kame's case and held that the work done by the photographer is only in the nature of a service contract not involving any sale of goods and held that the stand taken by the State cannot be sustained.',
	(int) 20 => '<p>16. Learned Counsel for the petitioner submitted that the photographs taken by the petitioner are not goods which can be sold and is not a marketable commodity like any other goods. When the copies of photographs are made out, they have no utility or value to any other person than the customer. It is already admitted that the papers utilized for photographs are tax paid goods. Therefore, it is contended by the learned Counsel for the petitioner that the work of photography does not come within the purview of works contract as defined in Section 2(jj) of the Orissa Sales Tax Act.',
	(int) 21 => '<p>17. Learned Counsel for the Revenue in this case virtually did not contest the submission made by the learned Counsel for the petitioner and in support of his contention, learned Counsel for the Revenue relied on a decision of the Supreme Court in the case of Imagic Creative Pvt. Ltd. v. Commissioner of Commercial Taxes and Ors. reported in (2008) 10 RC 236. In that judgment, learned Judges held that since the contract in question is a service contract, it is difficult to hold that in a case of this nature, sales tax would be payable on the value of the entire contract irrespective of the element of service provided.',
	(int) 22 => '<p>For the reasons discussed above, we answer the first question in the negative and the second question, in the affirmative. We thus answer both the questions in favour of the assessee and against the Revenue.',
	(int) 23 => '<p>The three revision applications are thus disposed of.',
	(int) 24 => '<p>No costs.',
	(int) 25 => '<p>B.N. Mahapatra, J.',
	(int) 26 => '<p>18. I agree.<p>',
	(int) 27 => '<p>'
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(ii) Whether on the facts and in the circumstances of the case, the conclusion of the Tribunal is perverse due to non-consideration and mis-consideration of facts and law and, therefore, it is liable to be set aside for re-hearing ?

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	'title_for_layout' => 'Studio Sujata Vs Commissioner of Sales Tax - Citation 531271 - Court Judgment | ',
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		'Judgement' => array(
			'id' => '531271',
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			'appellant' => 'Studio Sujata',
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			'casename' => 'Studio Sujata Vs. Commissioner of Sales Tax',
			'casenote' => 'Sales Tax - Assessment - Contract of Sale - Section 12 (5) of Orissa Sales Tax 1947 - Petitioner carries on business of processing and developing photography - Revenue assessed petitioner under Section 12(5) of Act on ground that activities of petitioner can be called works contract - Petitioner approached to Assistant of Sales Tax on ground that there is no contract of sale between the petitioner and the client, it is only service - Dismissed and affirmed by Tribunal - Hence present petition - Whether Tribunal is right to held that tax is exigible for photographs as execution of works contract or not? - Held, as per precedent laid down by Supreme Court in case of Sales Tax Officer v. B.C. Kame that photographer takes photograph and develops negatives and does other photographic work and thereafter supplies prints to his client - By doing so he cannot be said to enter into contract for sale of goods - Therefore, job of photographer is contract for work and labour and it is not contract of sale - Revenue committed mistake in assessing petitioner under Section 12(5) of Act on basis of contract of sale - Petition disposed of accordingly  - STATE FINANCIAL CORPORATIONS ACT, 1951 [63/1951]. Section 29; [P.K. Tripathy, A.K. Parichha & N.Prusty, JJ] Discharge of loan  Orissa Forest Act (14 of 1972), Section 56  Confiscation of vehicle - Held, The Authorities under Section 56 of the Orissa Forest Act, 1972 are not obliged to release the vehicle from the confiscation proceeding or to pay the sale proceeds of the vehicle after the order of confiscation in favour of Orissa State Financial Corporation when such vehicles were purchased on being financed by the Orissa State Financial Corporation and the loan had not been liquidated by the date of the seizure/confiscation of the vehicle. Concept of first charge or second charge has no applicability when the vehicle is not otherwise disposed of to determine the liabilities of the loanee. On the other hand the vehicle having been found indulged in forest offences was made subject matter of a confiscation proceedings, and therefore, the procedure followed for confiscation of the vehicle and for its sale is punitive in nature and not with a view to give benefit to anybody including the Department which initiated the confiscation proceeding. Apart from that, the claim of the Orissa State Financial Corporation as against its loanee (who had taken the vehicle on hire- purchase agreement) brings the loanee and the sureties within the default clause under the State Financial Corporation Act, 1951 or the heirs and successors of such persons. Procedure is provided in the Act, 1951 and the Rules thereof about the manner in which such loan is to be recovered, and in that context only the vehicle under the hire-purchase agreement is placed as the first charge. If such property is not available for any reason, then the loan is not automatically waived or the loanee and his sureties are not automatically redeemed of the liabilities to repay. The Financial Corporation is concerned with repayment of loan either from the property or persons offered as surety. Thus, a vehicle, which is subject matter of confiscation proceeding under the Act, 1872, being not available to the Orissa State Financial Corporation for adjustment of the unpaid loan, that does not at all bring out an anomalous situation so as to defeat the right of the Orissa State Financial Corporation. Agreement between the Orissa State Financial Corporation and the loanee is a pure and simple contract governed by the provisions of the Contract Act, 1872 read with the provisions in the Act, 1951 and its Rules. On the other hand, a confiscation proceeding under the Act, 1972 is punitive in nature for commission of a forest offence. Thus, by virtue of the provision in Section 56 read with Section 64 (2) of the Act, 1972, the action taken for confiscation of the vehicle cannot be extended to grant protection of the loan advanced by Orissa State Financial Corporation. By doing that it amounts to grant premium to the pick-pockets in as much as, by making payment of the confiscation amount in favour of the Orissa State Financial Corporation the loan burden of the accused of the forest offence is reduced to the extent of the sale proceeds of the vehicle. In other words, on payment of the sale proceeds of the confiscation proceeding to the Orissa State Financial Corporation towards discharge of the loan account of the accused of a forest offence, it would lead to a system to reward him by repayment of his loan. Then it does not become a penalty nor the action become punitive, but it remains as a reward to the accused of forest offence. Such a concept is totally not conceivable from any provision in the Act, 1972 or the Act, 1951. [AIR 2002 Orissa 130 Overruled]. -- STATE FINANCIAL CORPORATIONS ACT, 1951. 
Section 29; Discharge of loan  Orissa Forest Act (14 of 1972), Section 56  Confiscation of vehicle - Held, The Authorities under Section 56 of the Orissa Forest Act, 1972 are not obliged to release the vehicle from the confiscation proceeding or to pay the sale proceeds of the vehicle after the order of confiscation in favour of Orissa State Financial Corporation when such vehicles were purchased on being financed by the Orissa State Financial Corporation and the loan had not been liquidated by the date of the seizure/confiscation of the vehicle. Concept of first charge or second charge has no applicability when the vehicle is not otherwise disposed of to determine the liabilities of the loanee. On the other hand the vehicle having been found indulged in forest offences was made subject matter of a confiscation proceedings, and therefore, the procedure followed for confiscation of the vehicle and for its sale is punitive in nature and not with a view to give benefit to anybody including the Department which initiated the confiscation proceeding. Apart from that, the claim of the Orissa State Financial Corporation as against its loanee (who had taken the vehicle on hire- purchase agreement) brings the loanee and the sureties within the default clause under the State Financial Corporation Act, 1951 or the heirs and successors of such persons. Procedure is provided in the Act, 1951 and the Rules thereof about the manner in which such loan is to be recovered, and in that context only the vehicle under the hire-purchase agreement is placed as the first charge. If such property is not available for any reason, then the loan is not automatically waived or the loanee and his sureties are not automatically redeemed of the liabilities to repay. The Financial Corporation is concerned with repayment of loan either from the property or persons offered as surety. Thus, a vehicle, which is subject matter of confiscation proceeding under the Act, 1872, being not available to the Orissa State Financial Corporation for adjustment of the unpaid loan, that does not at all bring out an anomalous situation so as to defeat the right of the Orissa State Financial Corporation. Agreement between the Orissa State Financial Corporation and the loanee is a pure and simple contract governed by the provisions of the Contract Act, 1872 read with the provisions in the Act, 1951 and its Rules. On the other hand, a confiscation proceeding under the Act, 1972 is punitive in nature for commission of a forest offence. Thus, by virtue of the provision in Section 56 read with Section 64 (2) of the Act, 1972, the action taken for confiscation of the vehicle cannot be extended to grant protection of the loan advanced by Orissa State Financial Corporation. By doing that it amounts to grant premium to the pick-pockets in as much as, by making payment of the confiscation amount in favour of the Orissa State Financial Corporation the loan burden of the accused of the forest offence is reduced to the extent of the sale proceeds of the vehicle. In other words, on payment of the sale proceeds of the confiscation proceeding to the Orissa State Financial Corporation towards discharge of the loan account of the accused of a forest offence, it would lead to a system to reward him by repayment of his loan. Then it does not become a penalty nor the action become punitive, but it remains as a reward to the accused of forest offence. Such a concept is totally not conceivable from any provision in the Act, 1972 or the Act, 1951. [AIR 2002 Orissa 130 Overruled].  -  In that case, the stand of the Revenue was disapproved by the Orissa High Court. 16. Learned Counsel for the petitioner submitted that the photographs taken by the petitioner are not goods which can be sold and is not a marketable commodity like any other goods.',
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			'judge' => ' A.K. Ganguly, C.J. and; B.N. Mahapatra, J.',
			'judgement' => '<p style="text-align: justify;">A.K. Ganguly, C.J.</p><p style="text-align: justify;">1. Initially three S.J.Cs. being S.J.C. Nos. 10 of 1997, 8 of 1997 and 9 of 1997 were filed and subsequently renumbered as STREV Nos. 212, 214 and 216 of 2007 respectively. In view of the common questions of facts and law, all the three Revision Applications are heard and disposed of together.</p><p style="text-align: justify;">2. The following questions of law arising out of the order passed by the Orissa Sales Tax Tribunal on 8.12.1993 in Second Appeal Nos. 3345 to 3350 of 1991-92 have been referred to this Hon'ble High Court in terms of the order of this Hon'ble Court dated 24.2.1997. The questions are:</p><p style="text-align: justify;">(i) Whether on the facts and in the circumstances of the case, the Tribunal is right to held that tax is exigible for photographs as execution of works contract ?</p><p style="text-align: justify;">(ii) Whether on the facts and in the circumstances of the case, the conclusion of the Tribunal is perverse due to non-consideration and mis-consideration of facts and law and, therefore, it is liable to be set aside for re-hearing ?</p><p style="text-align: justify;">3. The materials facts out of which those questions arise are that the petitioner carries on the business of processing and developing photography. In the usual course of business, the petitioner takes photographs of persons or of family and then develops the negative by employing his skill and labour and then supplies the photographs to the clients. These photographs which are prepared by the petitioner are not commercial items because they are neither purchased nor sold. However, to develop these photographs employment of skill and labour is essential. It may be mentioned that petitioner does not carry on any sale of photographs of national leaders, God and Goddess.</p><p style="text-align: justify;">4. After the passing of 46th amendment of the Constitution of India and consequent amendments thereto in Orissa Sales Tax Act (OST Act), the Sales Tax Officer, Bhubaneswar-II Circle, Bhubaneswar sent notices to assess the petitioner as an unregistered dealer under Section 12 (5) of the OST Act, inter alia, contending that the petitioner's activities can be called 'works contract'. Pursuant to said notice, the petitioner gave its reply and appeared before the Sales Tax Officer and produced the books of account and documents including Receipts, Purchase Memos, Vouchers, Ledger and thereby denied its liability under the OST Act. The petitioner also submitted objection petitions on various dates i.e. 28.12.1985, 10.1.1986, 20.2.1986 and 29.2.1988 contending, inter alia, that the petitioner has no sales tax liability under OST Act and the notices, which were issued, are without jurisdiction.</p><p style="text-align: justify;">5. Ignoring the said objections of the petitioner, the Sales Tax Officer, Bhubaneswar-II Circle, Bhubaneswar assessed the petitioner as an unregistered dealer, inter alia, holding that the petitioner is liable to pay sales tax as petitioner has been alleged to carry activities of 'works contract'. Therefore, orders of assessment being dated 29.2.1988 for the years 1984-85 (9/84 to 3/85), 1985-86 and 1986- 87 under Section 12(5) of OST Act and under Rule 5 of the Orissa Additional Sales Tax Rules, 1975 were passed and a tax of Rs. 20,765.00 and penalty of Rs. 5,000.00 totalling to Rs. 25,765.00 was imposed on the petitioner. The petitioner then filed the First Appeal before the learned Assistant Commissioner of Sales Tax. The First Appellate Authority by an order dated 27.9.1991 confirmed the levy of tax under the OST Act, but reduced the penalty to Rs. 1250.00. Thereupon, the petitioner filed the Second Appeal before the Orissa Sales Tax Tribunal, Cuttack. The said Tribunal heard the Second Appeal and in course of hearing, the petitioner raised various contentions. Ultimately, the Tribunal upheld the levy of tax but deleted the penalty.</p><p style="text-align: justify;">6. Thereafter the petitioner came up with a reference application under Section 24(1) of the Orissa Sales Tax Act framing certain questions for being referred to the Hon'ble High Court. The said prayer of the petitioner was rejected by the Tribunal. Then the petitioner moved Hon'ble High Court under Section 24(2)(b) of the Orissa Sales Tax Act, 1947 whereupon the High Court directed the Tribunal to state to case and refer the questions under Section 24(3) of the OST Act for a decision of the High Court.</p><p style="text-align: justify;">7. Accordingly, the Tribunal stated the case and referred the aforesaid questions for a decision of the High Court.</p><p style="text-align: justify;">8. Learned Counsel for the petitioner before the High Court submitted that in the transaction in question, there is no contract of sale between the petitioner and the client. It is only a contract of service and the photographs, which the petitioner produced by supplying the same has no commercial value and are not marketable. So, there is no question of a works contract. It is the consistent stand of the petitioner that the present photographs which are produced by the petitioner have no utility or value to any other person than the customer. By developing such photographs, the petitioner only renders service to his customers. The customer pays for the service rendered by the petitioner. It is the contention of the petitioner that his activity is similar to that of consulting firm preparing plan and sketches pursuant to client's specification or professional giving opinion on papers. All those activities are done to serve the client. Therefore, this does not come within the purview of the definition of 'goods', 'sale', 'dealer' or 'works contract'. It is the petitioner's case that he purchased the goods, namely, papers on payment of sales tax. Further levy of tax on the personal service rendered to the client of the petitioner will amount to double taxation. It is also the contention of the petitioner that the paper which is used in the photography are incidental and insignificant.</p><p style="text-align: justify;">9. In support of its contention, learned Counsel for the petitioner has relied on several judgments. First reliance was place on the judgment of the Supreme Court in the case of Sales Tax Officer v. B.C. Kame reported in 39 STC 237(SC). At page 241 of the report, learned Judges of the Supreme Court held that a photographer takes the photograph and develops the negatives and does other photographic work and thereafter supplies the prints to his client. By doing so he cannot be said to enter into a contract for sale of goods. On the other hand, the contract is for use of skill and labour by the photographer to bring about the desired result. Learned Judges held that the job of a photographer is a contract for work and labour and it is not a contract of sale.</p><p style="text-align: justify;">10. Reliance was also placed on a judgment of this High Court in the case of Photo Emporium v. Addl. District Magistrate reported in 77 STC 199 in which this High Court followed the ratio of the judgment of the Supreme Court in the case of B.C. Kame. In that case, the stand of the Revenue was disapproved by the Orissa High Court.</p><p style="text-align: justify;">11. Similar view was taken in 110 STC 145 in the case of Foto Colour Labs Pvt. Ltd. v. Commercial Taxes Officer where the Tribunal held that the transfer of paper in the photograph is purely incidental and payment is only taken to give positive prints and not to get the photo papers. Therefore, the contract in between the petitioner and his client is not a contract of sale, and neither directly or indirectly works contract is involved in the supply of photo papers. Similar view was taken by the West Bengal Taxation Tribunal in the case of Studio Kamalalaya v. Commercial Tax Officer reported in 89 STC 307.</p><p style="text-align: justify;">12. In the case of Bavens v. Onion of India report in 97 STC 161, learned Judges held that when a photographer takes a photograph of his customer, he develops the negative and supplies positive prints in the desired size to the customer. In doing so the photographer uses his own camera and his own film. The negative belongs to the photographer and not to the customer. No basic goods are provided by the customer which are subjected to processing by the photographer so as to make the contract a works contract. There is no accretion to goods or property or the nucleus of a property which belongs to the customer. It is the skill of the photographer which is most important to get the desired result.</p><p style="text-align: justify;">13. Hon'ble Karnataka High Court followed the same principle in the case of Keshoram Surlndranath Photo-mag Pvt. Ltd. v. Assistant Commissioner of Commercial Taxes reported in 121 STC 175. In that judgment, learned Judges of the Karnataka High Court relied on the judgment of the Supreme Court in B.C. Kame's case and came to the conclusion that in the job of the photographer in supplying positive prints to his customer, no works contract is involved and photographs are not marketable or saleable commodity and as such no tax can be levied on it.</p><p style="text-align: justify;">14. Against the said judgment of the Karnataka High Court, the State of Karnataka High Court filed a S.L.P. before the Hon'ble Supreme Court bearing SLP Nos. 6136-6163 of 2000 and the Hon'ble Supreme Court dismissed the SLP on 20th April, 2000.</p><p style="text-align: justify;">15. In the case of Rainbow Colour Lab v. State of M.P. learned Judges of the Hon'ble Supreme Court reiterated its judgment in B.C. Kame's case and came to the following conclusion:</p><p style="text-align: justify;">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.</p><p style="text-align: justify;">Hon'ble Supreme Court in Bharat Sanchar Nigam Ltd. v. Union of India reported in 145 STC 91 again reiterated the principle in B.C. Kame's case and held that the work done by the photographer is only in the nature of a service contract not involving any sale of goods and held that the stand taken by the State cannot be sustained.</p><p style="text-align: justify;">16. Learned Counsel for the petitioner submitted that the photographs taken by the petitioner are not goods which can be sold and is not a marketable commodity like any other goods. When the copies of photographs are made out, they have no utility or value to any other person than the customer. It is already admitted that the papers utilized for photographs are tax paid goods. Therefore, it is contended by the learned Counsel for the petitioner that the work of photography does not come within the purview of works contract as defined in Section 2(jj) of the Orissa Sales Tax Act.</p><p style="text-align: justify;">17. Learned Counsel for the Revenue in this case virtually did not contest the submission made by the learned Counsel for the petitioner and in support of his contention, learned Counsel for the Revenue relied on a decision of the Supreme Court in the case of Imagic Creative Pvt. Ltd. v. Commissioner of Commercial Taxes and Ors. reported in (2008) 10 RC 236. In that judgment, learned Judges held that since the contract in question is a service contract, it is difficult to hold that in a case of this nature, sales tax would be payable on the value of the entire contract irrespective of the element of service provided.</p><p style="text-align: justify;">For the reasons discussed above, we answer the first question in the negative and the second question, in the affirmative. We thus answer both the questions in favour of the assessee and against the Revenue.</p><p style="text-align: justify;">The three revision applications are thus disposed of.</p><p style="text-align: justify;">No costs.</p><p style="text-align: justify;">B.N. Mahapatra, J.</p><p style="text-align: justify;">18. I agree.<p style="text-align: justify;"></p><p style="text-align: justify;">',
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$title_for_layout = 'Studio Sujata Vs Commissioner of Sales Tax - Citation 531271 - Court Judgment | '
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	'Judgement' => array(
		'id' => '531271',
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		'appellant' => 'Studio Sujata',
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		'casename' => 'Studio Sujata Vs. Commissioner of Sales Tax',
		'casenote' => 'Sales Tax - Assessment - Contract of Sale - Section 12 (5) of Orissa Sales Tax 1947 - Petitioner carries on business of processing and developing photography - Revenue assessed petitioner under Section 12(5) of Act on ground that activities of petitioner can be called works contract - Petitioner approached to Assistant of Sales Tax on ground that there is no contract of sale between the petitioner and the client, it is only service - Dismissed and affirmed by Tribunal - Hence present petition - Whether Tribunal is right to held that tax is exigible for photographs as execution of works contract or not? - Held, as per precedent laid down by Supreme Court in case of Sales Tax Officer v. B.C. Kame that photographer takes photograph and develops negatives and does other photographic work and thereafter supplies prints to his client - By doing so he cannot be said to enter into contract for sale of goods - Therefore, job of photographer is contract for work and labour and it is not contract of sale - Revenue committed mistake in assessing petitioner under Section 12(5) of Act on basis of contract of sale - Petition disposed of accordingly  - STATE FINANCIAL CORPORATIONS ACT, 1951 [63/1951]. Section 29; [P.K. Tripathy, A.K. Parichha & N.Prusty, JJ] Discharge of loan  Orissa Forest Act (14 of 1972), Section 56  Confiscation of vehicle - Held, The Authorities under Section 56 of the Orissa Forest Act, 1972 are not obliged to release the vehicle from the confiscation proceeding or to pay the sale proceeds of the vehicle after the order of confiscation in favour of Orissa State Financial Corporation when such vehicles were purchased on being financed by the Orissa State Financial Corporation and the loan had not been liquidated by the date of the seizure/confiscation of the vehicle. Concept of first charge or second charge has no applicability when the vehicle is not otherwise disposed of to determine the liabilities of the loanee. On the other hand the vehicle having been found indulged in forest offences was made subject matter of a confiscation proceedings, and therefore, the procedure followed for confiscation of the vehicle and for its sale is punitive in nature and not with a view to give benefit to anybody including the Department which initiated the confiscation proceeding. Apart from that, the claim of the Orissa State Financial Corporation as against its loanee (who had taken the vehicle on hire- purchase agreement) brings the loanee and the sureties within the default clause under the State Financial Corporation Act, 1951 or the heirs and successors of such persons. Procedure is provided in the Act, 1951 and the Rules thereof about the manner in which such loan is to be recovered, and in that context only the vehicle under the hire-purchase agreement is placed as the first charge. If such property is not available for any reason, then the loan is not automatically waived or the loanee and his sureties are not automatically redeemed of the liabilities to repay. The Financial Corporation is concerned with repayment of loan either from the property or persons offered as surety. Thus, a vehicle, which is subject matter of confiscation proceeding under the Act, 1872, being not available to the Orissa State Financial Corporation for adjustment of the unpaid loan, that does not at all bring out an anomalous situation so as to defeat the right of the Orissa State Financial Corporation. Agreement between the Orissa State Financial Corporation and the loanee is a pure and simple contract governed by the provisions of the Contract Act, 1872 read with the provisions in the Act, 1951 and its Rules. On the other hand, a confiscation proceeding under the Act, 1972 is punitive in nature for commission of a forest offence. Thus, by virtue of the provision in Section 56 read with Section 64 (2) of the Act, 1972, the action taken for confiscation of the vehicle cannot be extended to grant protection of the loan advanced by Orissa State Financial Corporation. By doing that it amounts to grant premium to the pick-pockets in as much as, by making payment of the confiscation amount in favour of the Orissa State Financial Corporation the loan burden of the accused of the forest offence is reduced to the extent of the sale proceeds of the vehicle. In other words, on payment of the sale proceeds of the confiscation proceeding to the Orissa State Financial Corporation towards discharge of the loan account of the accused of a forest offence, it would lead to a system to reward him by repayment of his loan. Then it does not become a penalty nor the action become punitive, but it remains as a reward to the accused of forest offence. Such a concept is totally not conceivable from any provision in the Act, 1972 or the Act, 1951. [AIR 2002 Orissa 130 Overruled]. -- STATE FINANCIAL CORPORATIONS ACT, 1951. 
Section 29; Discharge of loan  Orissa Forest Act (14 of 1972), Section 56  Confiscation of vehicle - Held, The Authorities under Section 56 of the Orissa Forest Act, 1972 are not obliged to release the vehicle from the confiscation proceeding or to pay the sale proceeds of the vehicle after the order of confiscation in favour of Orissa State Financial Corporation when such vehicles were purchased on being financed by the Orissa State Financial Corporation and the loan had not been liquidated by the date of the seizure/confiscation of the vehicle. Concept of first charge or second charge has no applicability when the vehicle is not otherwise disposed of to determine the liabilities of the loanee. On the other hand the vehicle having been found indulged in forest offences was made subject matter of a confiscation proceedings, and therefore, the procedure followed for confiscation of the vehicle and for its sale is punitive in nature and not with a view to give benefit to anybody including the Department which initiated the confiscation proceeding. Apart from that, the claim of the Orissa State Financial Corporation as against its loanee (who had taken the vehicle on hire- purchase agreement) brings the loanee and the sureties within the default clause under the State Financial Corporation Act, 1951 or the heirs and successors of such persons. Procedure is provided in the Act, 1951 and the Rules thereof about the manner in which such loan is to be recovered, and in that context only the vehicle under the hire-purchase agreement is placed as the first charge. If such property is not available for any reason, then the loan is not automatically waived or the loanee and his sureties are not automatically redeemed of the liabilities to repay. The Financial Corporation is concerned with repayment of loan either from the property or persons offered as surety. Thus, a vehicle, which is subject matter of confiscation proceeding under the Act, 1872, being not available to the Orissa State Financial Corporation for adjustment of the unpaid loan, that does not at all bring out an anomalous situation so as to defeat the right of the Orissa State Financial Corporation. Agreement between the Orissa State Financial Corporation and the loanee is a pure and simple contract governed by the provisions of the Contract Act, 1872 read with the provisions in the Act, 1951 and its Rules. On the other hand, a confiscation proceeding under the Act, 1972 is punitive in nature for commission of a forest offence. Thus, by virtue of the provision in Section 56 read with Section 64 (2) of the Act, 1972, the action taken for confiscation of the vehicle cannot be extended to grant protection of the loan advanced by Orissa State Financial Corporation. By doing that it amounts to grant premium to the pick-pockets in as much as, by making payment of the confiscation amount in favour of the Orissa State Financial Corporation the loan burden of the accused of the forest offence is reduced to the extent of the sale proceeds of the vehicle. In other words, on payment of the sale proceeds of the confiscation proceeding to the Orissa State Financial Corporation towards discharge of the loan account of the accused of a forest offence, it would lead to a system to reward him by repayment of his loan. Then it does not become a penalty nor the action become punitive, but it remains as a reward to the accused of forest offence. Such a concept is totally not conceivable from any provision in the Act, 1972 or the Act, 1951. [AIR 2002 Orissa 130 Overruled].  -  In that case, the stand of the Revenue was disapproved by the Orissa High Court. 16. Learned Counsel for the petitioner submitted that the photographs taken by the petitioner are not goods which can be sold and is not a marketable commodity like any other goods.',
		'caseanalysis' => null,
		'casesref' => 'Imagic Creative Pvt. Ltd. v. Commissioner of Commercial Taxes and Ors.;',
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		'court' => 'Orissa',
		'court_type' => 'HC',
		'decidedon' => '2008-04-02',
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		'judge' => ' A.K. Ganguly, C.J. and; B.N. Mahapatra, J.',
		'judgement' => '<p>A.K. Ganguly, C.J.</p><p>1. Initially three S.J.Cs. being S.J.C. Nos. 10 of 1997, 8 of 1997 and 9 of 1997 were filed and subsequently renumbered as STREV Nos. 212, 214 and 216 of 2007 respectively. In view of the common questions of facts and law, all the three Revision Applications are heard and disposed of together.</p><p>2. The following questions of law arising out of the order passed by the Orissa Sales Tax Tribunal on 8.12.1993 in Second Appeal Nos. 3345 to 3350 of 1991-92 have been referred to this Hon'ble High Court in terms of the order of this Hon'ble Court dated 24.2.1997. The questions are:</p><p>(i) Whether on the facts and in the circumstances of the case, the Tribunal is right to held that tax is exigible for photographs as execution of works contract ?</p><p>(ii) Whether on the facts and in the circumstances of the case, the conclusion of the Tribunal is perverse due to non-consideration and mis-consideration of facts and law and, therefore, it is liable to be set aside for re-hearing ?</p><p>3. The materials facts out of which those questions arise are that the petitioner carries on the business of processing and developing photography. In the usual course of business, the petitioner takes photographs of persons or of family and then develops the negative by employing his skill and labour and then supplies the photographs to the clients. These photographs which are prepared by the petitioner are not commercial items because they are neither purchased nor sold. However, to develop these photographs employment of skill and labour is essential. It may be mentioned that petitioner does not carry on any sale of photographs of national leaders, God and Goddess.</p><p>4. After the passing of 46th amendment of the Constitution of India and consequent amendments thereto in Orissa Sales Tax Act (OST Act), the Sales Tax Officer, Bhubaneswar-II Circle, Bhubaneswar sent notices to assess the petitioner as an unregistered dealer under Section 12 (5) of the OST Act, inter alia, contending that the petitioner's activities can be called 'works contract'. Pursuant to said notice, the petitioner gave its reply and appeared before the Sales Tax Officer and produced the books of account and documents including Receipts, Purchase Memos, Vouchers, Ledger and thereby denied its liability under the OST Act. The petitioner also submitted objection petitions on various dates i.e. 28.12.1985, 10.1.1986, 20.2.1986 and 29.2.1988 contending, inter alia, that the petitioner has no sales tax liability under OST Act and the notices, which were issued, are without jurisdiction.</p><p>5. Ignoring the said objections of the petitioner, the Sales Tax Officer, Bhubaneswar-II Circle, Bhubaneswar assessed the petitioner as an unregistered dealer, inter alia, holding that the petitioner is liable to pay sales tax as petitioner has been alleged to carry activities of 'works contract'. Therefore, orders of assessment being dated 29.2.1988 for the years 1984-85 (9/84 to 3/85), 1985-86 and 1986- 87 under Section 12(5) of OST Act and under Rule 5 of the Orissa Additional Sales Tax Rules, 1975 were passed and a tax of Rs. 20,765.00 and penalty of Rs. 5,000.00 totalling to Rs. 25,765.00 was imposed on the petitioner. The petitioner then filed the First Appeal before the learned Assistant Commissioner of Sales Tax. The First Appellate Authority by an order dated 27.9.1991 confirmed the levy of tax under the OST Act, but reduced the penalty to Rs. 1250.00. Thereupon, the petitioner filed the Second Appeal before the Orissa Sales Tax Tribunal, Cuttack. The said Tribunal heard the Second Appeal and in course of hearing, the petitioner raised various contentions. Ultimately, the Tribunal upheld the levy of tax but deleted the penalty.</p><p>6. Thereafter the petitioner came up with a reference application under Section 24(1) of the Orissa Sales Tax Act framing certain questions for being referred to the Hon'ble High Court. The said prayer of the petitioner was rejected by the Tribunal. Then the petitioner moved Hon'ble High Court under Section 24(2)(b) of the Orissa Sales Tax Act, 1947 whereupon the High Court directed the Tribunal to state to case and refer the questions under Section 24(3) of the OST Act for a decision of the High Court.</p><p>7. Accordingly, the Tribunal stated the case and referred the aforesaid questions for a decision of the High Court.</p><p>8. Learned Counsel for the petitioner before the High Court submitted that in the transaction in question, there is no contract of sale between the petitioner and the client. It is only a contract of service and the photographs, which the petitioner produced by supplying the same has no commercial value and are not marketable. So, there is no question of a works contract. It is the consistent stand of the petitioner that the present photographs which are produced by the petitioner have no utility or value to any other person than the customer. By developing such photographs, the petitioner only renders service to his customers. The customer pays for the service rendered by the petitioner. It is the contention of the petitioner that his activity is similar to that of consulting firm preparing plan and sketches pursuant to client's specification or professional giving opinion on papers. All those activities are done to serve the client. Therefore, this does not come within the purview of the definition of 'goods', 'sale', 'dealer' or 'works contract'. It is the petitioner's case that he purchased the goods, namely, papers on payment of sales tax. Further levy of tax on the personal service rendered to the client of the petitioner will amount to double taxation. It is also the contention of the petitioner that the paper which is used in the photography are incidental and insignificant.</p><p>9. In support of its contention, learned Counsel for the petitioner has relied on several judgments. First reliance was place on the judgment of the Supreme Court in the case of Sales Tax Officer v. B.C. Kame reported in 39 STC 237(SC). At page 241 of the report, learned Judges of the Supreme Court held that a photographer takes the photograph and develops the negatives and does other photographic work and thereafter supplies the prints to his client. By doing so he cannot be said to enter into a contract for sale of goods. On the other hand, the contract is for use of skill and labour by the photographer to bring about the desired result. Learned Judges held that the job of a photographer is a contract for work and labour and it is not a contract of sale.</p><p>10. Reliance was also placed on a judgment of this High Court in the case of Photo Emporium v. Addl. District Magistrate reported in 77 STC 199 in which this High Court followed the ratio of the judgment of the Supreme Court in the case of B.C. Kame. In that case, the stand of the Revenue was disapproved by the Orissa High Court.</p><p>11. Similar view was taken in 110 STC 145 in the case of Foto Colour Labs Pvt. Ltd. v. Commercial Taxes Officer where the Tribunal held that the transfer of paper in the photograph is purely incidental and payment is only taken to give positive prints and not to get the photo papers. Therefore, the contract in between the petitioner and his client is not a contract of sale, and neither directly or indirectly works contract is involved in the supply of photo papers. Similar view was taken by the West Bengal Taxation Tribunal in the case of Studio Kamalalaya v. Commercial Tax Officer reported in 89 STC 307.</p><p>12. In the case of Bavens v. Onion of India report in 97 STC 161, learned Judges held that when a photographer takes a photograph of his customer, he develops the negative and supplies positive prints in the desired size to the customer. In doing so the photographer uses his own camera and his own film. The negative belongs to the photographer and not to the customer. No basic goods are provided by the customer which are subjected to processing by the photographer so as to make the contract a works contract. There is no accretion to goods or property or the nucleus of a property which belongs to the customer. It is the skill of the photographer which is most important to get the desired result.</p><p>13. Hon'ble Karnataka High Court followed the same principle in the case of Keshoram Surlndranath Photo-mag Pvt. Ltd. v. Assistant Commissioner of Commercial Taxes reported in 121 STC 175. In that judgment, learned Judges of the Karnataka High Court relied on the judgment of the Supreme Court in B.C. Kame's case and came to the conclusion that in the job of the photographer in supplying positive prints to his customer, no works contract is involved and photographs are not marketable or saleable commodity and as such no tax can be levied on it.</p><p>14. Against the said judgment of the Karnataka High Court, the State of Karnataka High Court filed a S.L.P. before the Hon'ble Supreme Court bearing SLP Nos. 6136-6163 of 2000 and the Hon'ble Supreme Court dismissed the SLP on 20th April, 2000.</p><p>15. In the case of Rainbow Colour Lab v. State of M.P. learned Judges of the Hon'ble Supreme Court reiterated its judgment in B.C. Kame's case and came to the following conclusion:</p><p>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.</p><p>Hon'ble Supreme Court in Bharat Sanchar Nigam Ltd. v. Union of India reported in 145 STC 91 again reiterated the principle in B.C. Kame's case and held that the work done by the photographer is only in the nature of a service contract not involving any sale of goods and held that the stand taken by the State cannot be sustained.</p><p>16. Learned Counsel for the petitioner submitted that the photographs taken by the petitioner are not goods which can be sold and is not a marketable commodity like any other goods. When the copies of photographs are made out, they have no utility or value to any other person than the customer. It is already admitted that the papers utilized for photographs are tax paid goods. Therefore, it is contended by the learned Counsel for the petitioner that the work of photography does not come within the purview of works contract as defined in Section 2(jj) of the Orissa Sales Tax Act.</p><p>17. Learned Counsel for the Revenue in this case virtually did not contest the submission made by the learned Counsel for the petitioner and in support of his contention, learned Counsel for the Revenue relied on a decision of the Supreme Court in the case of Imagic Creative Pvt. Ltd. v. Commissioner of Commercial Taxes and Ors. reported in (2008) 10 RC 236. In that judgment, learned Judges held that since the contract in question is a service contract, it is difficult to hold that in a case of this nature, sales tax would be payable on the value of the entire contract irrespective of the element of service provided.</p><p>For the reasons discussed above, we answer the first question in the negative and the second question, in the affirmative. We thus answer both the questions in favour of the assessee and against the Revenue.</p><p>The three revision applications are thus disposed of.</p><p>No costs.</p><p>B.N. Mahapatra, J.</p><p>18. I agree.<p></p><p>',
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	(int) 0 => '<p>A.K. Ganguly, C.J.',
	(int) 1 => '<p>1. Initially three S.J.Cs. being S.J.C. Nos. 10 of 1997, 8 of 1997 and 9 of 1997 were filed and subsequently renumbered as STREV Nos. 212, 214 and 216 of 2007 respectively. In view of the common questions of facts and law, all the three Revision Applications are heard and disposed of together.',
	(int) 2 => '<p>2. The following questions of law arising out of the order passed by the Orissa Sales Tax Tribunal on 8.12.1993 in Second Appeal Nos. 3345 to 3350 of 1991-92 have been referred to this Hon'ble High Court in terms of the order of this Hon'ble Court dated 24.2.1997. The questions are:',
	(int) 3 => '<p>(i) Whether on the facts and in the circumstances of the case, the Tribunal is right to held that tax is exigible for photographs as execution of works contract ?',
	(int) 4 => '<p>(ii) Whether on the facts and in the circumstances of the case, the conclusion of the Tribunal is perverse due to non-consideration and mis-consideration of facts and law and, therefore, it is liable to be set aside for re-hearing ?',
	(int) 5 => '<p>3. The materials facts out of which those questions arise are that the petitioner carries on the business of processing and developing photography. In the usual course of business, the petitioner takes photographs of persons or of family and then develops the negative by employing his skill and labour and then supplies the photographs to the clients. These photographs which are prepared by the petitioner are not commercial items because they are neither purchased nor sold. However, to develop these photographs employment of skill and labour is essential. It may be mentioned that petitioner does not carry on any sale of photographs of national leaders, God and Goddess.',
	(int) 6 => '<p>4. After the passing of 46th amendment of the Constitution of India and consequent amendments thereto in Orissa Sales Tax Act (OST Act), the Sales Tax Officer, Bhubaneswar-II Circle, Bhubaneswar sent notices to assess the petitioner as an unregistered dealer under Section 12 (5) of the OST Act, inter alia, contending that the petitioner's activities can be called 'works contract'. Pursuant to said notice, the petitioner gave its reply and appeared before the Sales Tax Officer and produced the books of account and documents including Receipts, Purchase Memos, Vouchers, Ledger and thereby denied its liability under the OST Act. The petitioner also submitted objection petitions on various dates i.e. 28.12.1985, 10.1.1986, 20.2.1986 and 29.2.1988 contending, inter alia, that the petitioner has no sales tax liability under OST Act and the notices, which were issued, are without jurisdiction.',
	(int) 7 => '<p>5. Ignoring the said objections of the petitioner, the Sales Tax Officer, Bhubaneswar-II Circle, Bhubaneswar assessed the petitioner as an unregistered dealer, inter alia, holding that the petitioner is liable to pay sales tax as petitioner has been alleged to carry activities of 'works contract'. Therefore, orders of assessment being dated 29.2.1988 for the years 1984-85 (9/84 to 3/85), 1985-86 and 1986- 87 under Section 12(5) of OST Act and under Rule 5 of the Orissa Additional Sales Tax Rules, 1975 were passed and a tax of Rs. 20,765.00 and penalty of Rs. 5,000.00 totalling to Rs. 25,765.00 was imposed on the petitioner. The petitioner then filed the First Appeal before the learned Assistant Commissioner of Sales Tax. The First Appellate Authority by an order dated 27.9.1991 confirmed the levy of tax under the OST Act, but reduced the penalty to Rs. 1250.00. Thereupon, the petitioner filed the Second Appeal before the Orissa Sales Tax Tribunal, Cuttack. The said Tribunal heard the Second Appeal and in course of hearing, the petitioner raised various contentions. Ultimately, the Tribunal upheld the levy of tax but deleted the penalty.',
	(int) 8 => '<p>6. Thereafter the petitioner came up with a reference application under Section 24(1) of the Orissa Sales Tax Act framing certain questions for being referred to the Hon'ble High Court. The said prayer of the petitioner was rejected by the Tribunal. Then the petitioner moved Hon'ble High Court under Section 24(2)(b) of the Orissa Sales Tax Act, 1947 whereupon the High Court directed the Tribunal to state to case and refer the questions under Section 24(3) of the OST Act for a decision of the High Court.',
	(int) 9 => '<p>7. Accordingly, the Tribunal stated the case and referred the aforesaid questions for a decision of the High Court.',
	(int) 10 => '<p>8. Learned Counsel for the petitioner before the High Court submitted that in the transaction in question, there is no contract of sale between the petitioner and the client. It is only a contract of service and the photographs, which the petitioner produced by supplying the same has no commercial value and are not marketable. So, there is no question of a works contract. It is the consistent stand of the petitioner that the present photographs which are produced by the petitioner have no utility or value to any other person than the customer. By developing such photographs, the petitioner only renders service to his customers. The customer pays for the service rendered by the petitioner. It is the contention of the petitioner that his activity is similar to that of consulting firm preparing plan and sketches pursuant to client's specification or professional giving opinion on papers. All those activities are done to serve the client. Therefore, this does not come within the purview of the definition of 'goods', 'sale', 'dealer' or 'works contract'. It is the petitioner's case that he purchased the goods, namely, papers on payment of sales tax. Further levy of tax on the personal service rendered to the client of the petitioner will amount to double taxation. It is also the contention of the petitioner that the paper which is used in the photography are incidental and insignificant.',
	(int) 11 => '<p>9. In support of its contention, learned Counsel for the petitioner has relied on several judgments. First reliance was place on the judgment of the Supreme Court in the case of Sales Tax Officer v. B.C. Kame reported in 39 STC 237(SC). At page 241 of the report, learned Judges of the Supreme Court held that a photographer takes the photograph and develops the negatives and does other photographic work and thereafter supplies the prints to his client. By doing so he cannot be said to enter into a contract for sale of goods. On the other hand, the contract is for use of skill and labour by the photographer to bring about the desired result. Learned Judges held that the job of a photographer is a contract for work and labour and it is not a contract of sale.',
	(int) 12 => '<p>10. Reliance was also placed on a judgment of this High Court in the case of Photo Emporium v. Addl. District Magistrate reported in 77 STC 199 in which this High Court followed the ratio of the judgment of the Supreme Court in the case of B.C. Kame. In that case, the stand of the Revenue was disapproved by the Orissa High Court.',
	(int) 13 => '<p>11. Similar view was taken in 110 STC 145 in the case of Foto Colour Labs Pvt. Ltd. v. Commercial Taxes Officer where the Tribunal held that the transfer of paper in the photograph is purely incidental and payment is only taken to give positive prints and not to get the photo papers. Therefore, the contract in between the petitioner and his client is not a contract of sale, and neither directly or indirectly works contract is involved in the supply of photo papers. Similar view was taken by the West Bengal Taxation Tribunal in the case of Studio Kamalalaya v. Commercial Tax Officer reported in 89 STC 307.',
	(int) 14 => '<p>12. In the case of Bavens v. Onion of India report in 97 STC 161, learned Judges held that when a photographer takes a photograph of his customer, he develops the negative and supplies positive prints in the desired size to the customer. In doing so the photographer uses his own camera and his own film. The negative belongs to the photographer and not to the customer. No basic goods are provided by the customer which are subjected to processing by the photographer so as to make the contract a works contract. There is no accretion to goods or property or the nucleus of a property which belongs to the customer. It is the skill of the photographer which is most important to get the desired result.',
	(int) 15 => '<p>13. Hon'ble Karnataka High Court followed the same principle in the case of Keshoram Surlndranath Photo-mag Pvt. Ltd. v. Assistant Commissioner of Commercial Taxes reported in 121 STC 175. In that judgment, learned Judges of the Karnataka High Court relied on the judgment of the Supreme Court in B.C. Kame's case and came to the conclusion that in the job of the photographer in supplying positive prints to his customer, no works contract is involved and photographs are not marketable or saleable commodity and as such no tax can be levied on it.',
	(int) 16 => '<p>14. Against the said judgment of the Karnataka High Court, the State of Karnataka High Court filed a S.L.P. before the Hon'ble Supreme Court bearing SLP Nos. 6136-6163 of 2000 and the Hon'ble Supreme Court dismissed the SLP on 20th April, 2000.',
	(int) 17 => '<p>15. In the case of Rainbow Colour Lab v. State of M.P. learned Judges of the Hon'ble Supreme Court reiterated its judgment in B.C. Kame's case and came to the following conclusion:',
	(int) 18 => '<p>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.',
	(int) 19 => '<p>Hon'ble Supreme Court in Bharat Sanchar Nigam Ltd. v. Union of India reported in 145 STC 91 again reiterated the principle in B.C. Kame's case and held that the work done by the photographer is only in the nature of a service contract not involving any sale of goods and held that the stand taken by the State cannot be sustained.',
	(int) 20 => '<p>16. Learned Counsel for the petitioner submitted that the photographs taken by the petitioner are not goods which can be sold and is not a marketable commodity like any other goods. When the copies of photographs are made out, they have no utility or value to any other person than the customer. It is already admitted that the papers utilized for photographs are tax paid goods. Therefore, it is contended by the learned Counsel for the petitioner that the work of photography does not come within the purview of works contract as defined in Section 2(jj) of the Orissa Sales Tax Act.',
	(int) 21 => '<p>17. Learned Counsel for the Revenue in this case virtually did not contest the submission made by the learned Counsel for the petitioner and in support of his contention, learned Counsel for the Revenue relied on a decision of the Supreme Court in the case of Imagic Creative Pvt. Ltd. v. Commissioner of Commercial Taxes and Ors. reported in (2008) 10 RC 236. In that judgment, learned Judges held that since the contract in question is a service contract, it is difficult to hold that in a case of this nature, sales tax would be payable on the value of the entire contract irrespective of the element of service provided.',
	(int) 22 => '<p>For the reasons discussed above, we answer the first question in the negative and the second question, in the affirmative. We thus answer both the questions in favour of the assessee and against the Revenue.',
	(int) 23 => '<p>The three revision applications are thus disposed of.',
	(int) 24 => '<p>No costs.',
	(int) 25 => '<p>B.N. Mahapatra, J.',
	(int) 26 => '<p>18. I agree.<p>',
	(int) 27 => '<p>'
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3. The materials facts out of which those questions arise are that the petitioner carries on the business of processing and developing photography. In the usual course of business, the petitioner takes photographs of persons or of family and then develops the negative by employing his skill and labour and then supplies the photographs to the clients. These photographs which are prepared by the petitioner are not commercial items because they are neither purchased nor sold. However, to develop these photographs employment of skill and labour is essential. It may be mentioned that petitioner does not carry on any sale of photographs of national leaders, God and Goddess.

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	'title_for_layout' => 'Studio Sujata Vs Commissioner of Sales Tax - Citation 531271 - Court Judgment | ',
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		'Judgement' => array(
			'id' => '531271',
			'acts' => '',
			'appealno' => '',
			'appellant' => 'Studio Sujata',
			'authreffered' => '',
			'casename' => 'Studio Sujata Vs. Commissioner of Sales Tax',
			'casenote' => 'Sales Tax - Assessment - Contract of Sale - Section 12 (5) of Orissa Sales Tax 1947 - Petitioner carries on business of processing and developing photography - Revenue assessed petitioner under Section 12(5) of Act on ground that activities of petitioner can be called works contract - Petitioner approached to Assistant of Sales Tax on ground that there is no contract of sale between the petitioner and the client, it is only service - Dismissed and affirmed by Tribunal - Hence present petition - Whether Tribunal is right to held that tax is exigible for photographs as execution of works contract or not? - Held, as per precedent laid down by Supreme Court in case of Sales Tax Officer v. B.C. Kame that photographer takes photograph and develops negatives and does other photographic work and thereafter supplies prints to his client - By doing so he cannot be said to enter into contract for sale of goods - Therefore, job of photographer is contract for work and labour and it is not contract of sale - Revenue committed mistake in assessing petitioner under Section 12(5) of Act on basis of contract of sale - Petition disposed of accordingly  - STATE FINANCIAL CORPORATIONS ACT, 1951 [63/1951]. Section 29; [P.K. Tripathy, A.K. Parichha & N.Prusty, JJ] Discharge of loan  Orissa Forest Act (14 of 1972), Section 56  Confiscation of vehicle - Held, The Authorities under Section 56 of the Orissa Forest Act, 1972 are not obliged to release the vehicle from the confiscation proceeding or to pay the sale proceeds of the vehicle after the order of confiscation in favour of Orissa State Financial Corporation when such vehicles were purchased on being financed by the Orissa State Financial Corporation and the loan had not been liquidated by the date of the seizure/confiscation of the vehicle. Concept of first charge or second charge has no applicability when the vehicle is not otherwise disposed of to determine the liabilities of the loanee. On the other hand the vehicle having been found indulged in forest offences was made subject matter of a confiscation proceedings, and therefore, the procedure followed for confiscation of the vehicle and for its sale is punitive in nature and not with a view to give benefit to anybody including the Department which initiated the confiscation proceeding. Apart from that, the claim of the Orissa State Financial Corporation as against its loanee (who had taken the vehicle on hire- purchase agreement) brings the loanee and the sureties within the default clause under the State Financial Corporation Act, 1951 or the heirs and successors of such persons. Procedure is provided in the Act, 1951 and the Rules thereof about the manner in which such loan is to be recovered, and in that context only the vehicle under the hire-purchase agreement is placed as the first charge. If such property is not available for any reason, then the loan is not automatically waived or the loanee and his sureties are not automatically redeemed of the liabilities to repay. The Financial Corporation is concerned with repayment of loan either from the property or persons offered as surety. Thus, a vehicle, which is subject matter of confiscation proceeding under the Act, 1872, being not available to the Orissa State Financial Corporation for adjustment of the unpaid loan, that does not at all bring out an anomalous situation so as to defeat the right of the Orissa State Financial Corporation. Agreement between the Orissa State Financial Corporation and the loanee is a pure and simple contract governed by the provisions of the Contract Act, 1872 read with the provisions in the Act, 1951 and its Rules. On the other hand, a confiscation proceeding under the Act, 1972 is punitive in nature for commission of a forest offence. Thus, by virtue of the provision in Section 56 read with Section 64 (2) of the Act, 1972, the action taken for confiscation of the vehicle cannot be extended to grant protection of the loan advanced by Orissa State Financial Corporation. By doing that it amounts to grant premium to the pick-pockets in as much as, by making payment of the confiscation amount in favour of the Orissa State Financial Corporation the loan burden of the accused of the forest offence is reduced to the extent of the sale proceeds of the vehicle. In other words, on payment of the sale proceeds of the confiscation proceeding to the Orissa State Financial Corporation towards discharge of the loan account of the accused of a forest offence, it would lead to a system to reward him by repayment of his loan. Then it does not become a penalty nor the action become punitive, but it remains as a reward to the accused of forest offence. Such a concept is totally not conceivable from any provision in the Act, 1972 or the Act, 1951. [AIR 2002 Orissa 130 Overruled]. -- STATE FINANCIAL CORPORATIONS ACT, 1951. 
Section 29; Discharge of loan  Orissa Forest Act (14 of 1972), Section 56  Confiscation of vehicle - Held, The Authorities under Section 56 of the Orissa Forest Act, 1972 are not obliged to release the vehicle from the confiscation proceeding or to pay the sale proceeds of the vehicle after the order of confiscation in favour of Orissa State Financial Corporation when such vehicles were purchased on being financed by the Orissa State Financial Corporation and the loan had not been liquidated by the date of the seizure/confiscation of the vehicle. Concept of first charge or second charge has no applicability when the vehicle is not otherwise disposed of to determine the liabilities of the loanee. On the other hand the vehicle having been found indulged in forest offences was made subject matter of a confiscation proceedings, and therefore, the procedure followed for confiscation of the vehicle and for its sale is punitive in nature and not with a view to give benefit to anybody including the Department which initiated the confiscation proceeding. Apart from that, the claim of the Orissa State Financial Corporation as against its loanee (who had taken the vehicle on hire- purchase agreement) brings the loanee and the sureties within the default clause under the State Financial Corporation Act, 1951 or the heirs and successors of such persons. Procedure is provided in the Act, 1951 and the Rules thereof about the manner in which such loan is to be recovered, and in that context only the vehicle under the hire-purchase agreement is placed as the first charge. If such property is not available for any reason, then the loan is not automatically waived or the loanee and his sureties are not automatically redeemed of the liabilities to repay. The Financial Corporation is concerned with repayment of loan either from the property or persons offered as surety. Thus, a vehicle, which is subject matter of confiscation proceeding under the Act, 1872, being not available to the Orissa State Financial Corporation for adjustment of the unpaid loan, that does not at all bring out an anomalous situation so as to defeat the right of the Orissa State Financial Corporation. Agreement between the Orissa State Financial Corporation and the loanee is a pure and simple contract governed by the provisions of the Contract Act, 1872 read with the provisions in the Act, 1951 and its Rules. On the other hand, a confiscation proceeding under the Act, 1972 is punitive in nature for commission of a forest offence. Thus, by virtue of the provision in Section 56 read with Section 64 (2) of the Act, 1972, the action taken for confiscation of the vehicle cannot be extended to grant protection of the loan advanced by Orissa State Financial Corporation. By doing that it amounts to grant premium to the pick-pockets in as much as, by making payment of the confiscation amount in favour of the Orissa State Financial Corporation the loan burden of the accused of the forest offence is reduced to the extent of the sale proceeds of the vehicle. In other words, on payment of the sale proceeds of the confiscation proceeding to the Orissa State Financial Corporation towards discharge of the loan account of the accused of a forest offence, it would lead to a system to reward him by repayment of his loan. Then it does not become a penalty nor the action become punitive, but it remains as a reward to the accused of forest offence. Such a concept is totally not conceivable from any provision in the Act, 1972 or the Act, 1951. [AIR 2002 Orissa 130 Overruled].  -  In that case, the stand of the Revenue was disapproved by the Orissa High Court. 16. Learned Counsel for the petitioner submitted that the photographs taken by the petitioner are not goods which can be sold and is not a marketable commodity like any other goods.',
			'caseanalysis' => null,
			'casesref' => 'Imagic Creative Pvt. Ltd. v. Commissioner of Commercial Taxes and Ors.;',
			'citingcases' => '',
			'counselplain' => '',
			'counseldef' => '',
			'court' => 'Orissa',
			'court_type' => 'HC',
			'decidedon' => '2008-04-02',
			'deposition' => '',
			'favorof' => null,
			'findings' => null,
			'judge' => ' A.K. Ganguly, C.J. and; B.N. Mahapatra, J.',
			'judgement' => '<p style="text-align: justify;">A.K. Ganguly, C.J.</p><p style="text-align: justify;">1. Initially three S.J.Cs. being S.J.C. Nos. 10 of 1997, 8 of 1997 and 9 of 1997 were filed and subsequently renumbered as STREV Nos. 212, 214 and 216 of 2007 respectively. In view of the common questions of facts and law, all the three Revision Applications are heard and disposed of together.</p><p style="text-align: justify;">2. The following questions of law arising out of the order passed by the Orissa Sales Tax Tribunal on 8.12.1993 in Second Appeal Nos. 3345 to 3350 of 1991-92 have been referred to this Hon'ble High Court in terms of the order of this Hon'ble Court dated 24.2.1997. The questions are:</p><p style="text-align: justify;">(i) Whether on the facts and in the circumstances of the case, the Tribunal is right to held that tax is exigible for photographs as execution of works contract ?</p><p style="text-align: justify;">(ii) Whether on the facts and in the circumstances of the case, the conclusion of the Tribunal is perverse due to non-consideration and mis-consideration of facts and law and, therefore, it is liable to be set aside for re-hearing ?</p><p style="text-align: justify;">3. The materials facts out of which those questions arise are that the petitioner carries on the business of processing and developing photography. In the usual course of business, the petitioner takes photographs of persons or of family and then develops the negative by employing his skill and labour and then supplies the photographs to the clients. These photographs which are prepared by the petitioner are not commercial items because they are neither purchased nor sold. However, to develop these photographs employment of skill and labour is essential. It may be mentioned that petitioner does not carry on any sale of photographs of national leaders, God and Goddess.</p><p style="text-align: justify;">4. After the passing of 46th amendment of the Constitution of India and consequent amendments thereto in Orissa Sales Tax Act (OST Act), the Sales Tax Officer, Bhubaneswar-II Circle, Bhubaneswar sent notices to assess the petitioner as an unregistered dealer under Section 12 (5) of the OST Act, inter alia, contending that the petitioner's activities can be called 'works contract'. Pursuant to said notice, the petitioner gave its reply and appeared before the Sales Tax Officer and produced the books of account and documents including Receipts, Purchase Memos, Vouchers, Ledger and thereby denied its liability under the OST Act. The petitioner also submitted objection petitions on various dates i.e. 28.12.1985, 10.1.1986, 20.2.1986 and 29.2.1988 contending, inter alia, that the petitioner has no sales tax liability under OST Act and the notices, which were issued, are without jurisdiction.</p><p style="text-align: justify;">5. Ignoring the said objections of the petitioner, the Sales Tax Officer, Bhubaneswar-II Circle, Bhubaneswar assessed the petitioner as an unregistered dealer, inter alia, holding that the petitioner is liable to pay sales tax as petitioner has been alleged to carry activities of 'works contract'. Therefore, orders of assessment being dated 29.2.1988 for the years 1984-85 (9/84 to 3/85), 1985-86 and 1986- 87 under Section 12(5) of OST Act and under Rule 5 of the Orissa Additional Sales Tax Rules, 1975 were passed and a tax of Rs. 20,765.00 and penalty of Rs. 5,000.00 totalling to Rs. 25,765.00 was imposed on the petitioner. The petitioner then filed the First Appeal before the learned Assistant Commissioner of Sales Tax. The First Appellate Authority by an order dated 27.9.1991 confirmed the levy of tax under the OST Act, but reduced the penalty to Rs. 1250.00. Thereupon, the petitioner filed the Second Appeal before the Orissa Sales Tax Tribunal, Cuttack. The said Tribunal heard the Second Appeal and in course of hearing, the petitioner raised various contentions. Ultimately, the Tribunal upheld the levy of tax but deleted the penalty.</p><p style="text-align: justify;">6. Thereafter the petitioner came up with a reference application under Section 24(1) of the Orissa Sales Tax Act framing certain questions for being referred to the Hon'ble High Court. The said prayer of the petitioner was rejected by the Tribunal. Then the petitioner moved Hon'ble High Court under Section 24(2)(b) of the Orissa Sales Tax Act, 1947 whereupon the High Court directed the Tribunal to state to case and refer the questions under Section 24(3) of the OST Act for a decision of the High Court.</p><p style="text-align: justify;">7. Accordingly, the Tribunal stated the case and referred the aforesaid questions for a decision of the High Court.</p><p style="text-align: justify;">8. Learned Counsel for the petitioner before the High Court submitted that in the transaction in question, there is no contract of sale between the petitioner and the client. It is only a contract of service and the photographs, which the petitioner produced by supplying the same has no commercial value and are not marketable. So, there is no question of a works contract. It is the consistent stand of the petitioner that the present photographs which are produced by the petitioner have no utility or value to any other person than the customer. By developing such photographs, the petitioner only renders service to his customers. The customer pays for the service rendered by the petitioner. It is the contention of the petitioner that his activity is similar to that of consulting firm preparing plan and sketches pursuant to client's specification or professional giving opinion on papers. All those activities are done to serve the client. Therefore, this does not come within the purview of the definition of 'goods', 'sale', 'dealer' or 'works contract'. It is the petitioner's case that he purchased the goods, namely, papers on payment of sales tax. Further levy of tax on the personal service rendered to the client of the petitioner will amount to double taxation. It is also the contention of the petitioner that the paper which is used in the photography are incidental and insignificant.</p><p style="text-align: justify;">9. In support of its contention, learned Counsel for the petitioner has relied on several judgments. First reliance was place on the judgment of the Supreme Court in the case of Sales Tax Officer v. B.C. Kame reported in 39 STC 237(SC). At page 241 of the report, learned Judges of the Supreme Court held that a photographer takes the photograph and develops the negatives and does other photographic work and thereafter supplies the prints to his client. By doing so he cannot be said to enter into a contract for sale of goods. On the other hand, the contract is for use of skill and labour by the photographer to bring about the desired result. Learned Judges held that the job of a photographer is a contract for work and labour and it is not a contract of sale.</p><p style="text-align: justify;">10. Reliance was also placed on a judgment of this High Court in the case of Photo Emporium v. Addl. District Magistrate reported in 77 STC 199 in which this High Court followed the ratio of the judgment of the Supreme Court in the case of B.C. Kame. In that case, the stand of the Revenue was disapproved by the Orissa High Court.</p><p style="text-align: justify;">11. Similar view was taken in 110 STC 145 in the case of Foto Colour Labs Pvt. Ltd. v. Commercial Taxes Officer where the Tribunal held that the transfer of paper in the photograph is purely incidental and payment is only taken to give positive prints and not to get the photo papers. Therefore, the contract in between the petitioner and his client is not a contract of sale, and neither directly or indirectly works contract is involved in the supply of photo papers. Similar view was taken by the West Bengal Taxation Tribunal in the case of Studio Kamalalaya v. Commercial Tax Officer reported in 89 STC 307.</p><p style="text-align: justify;">12. In the case of Bavens v. Onion of India report in 97 STC 161, learned Judges held that when a photographer takes a photograph of his customer, he develops the negative and supplies positive prints in the desired size to the customer. In doing so the photographer uses his own camera and his own film. The negative belongs to the photographer and not to the customer. No basic goods are provided by the customer which are subjected to processing by the photographer so as to make the contract a works contract. There is no accretion to goods or property or the nucleus of a property which belongs to the customer. It is the skill of the photographer which is most important to get the desired result.</p><p style="text-align: justify;">13. Hon'ble Karnataka High Court followed the same principle in the case of Keshoram Surlndranath Photo-mag Pvt. Ltd. v. Assistant Commissioner of Commercial Taxes reported in 121 STC 175. In that judgment, learned Judges of the Karnataka High Court relied on the judgment of the Supreme Court in B.C. Kame's case and came to the conclusion that in the job of the photographer in supplying positive prints to his customer, no works contract is involved and photographs are not marketable or saleable commodity and as such no tax can be levied on it.</p><p style="text-align: justify;">14. Against the said judgment of the Karnataka High Court, the State of Karnataka High Court filed a S.L.P. before the Hon'ble Supreme Court bearing SLP Nos. 6136-6163 of 2000 and the Hon'ble Supreme Court dismissed the SLP on 20th April, 2000.</p><p style="text-align: justify;">15. In the case of Rainbow Colour Lab v. State of M.P. learned Judges of the Hon'ble Supreme Court reiterated its judgment in B.C. Kame's case and came to the following conclusion:</p><p style="text-align: justify;">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.</p><p style="text-align: justify;">Hon'ble Supreme Court in Bharat Sanchar Nigam Ltd. v. Union of India reported in 145 STC 91 again reiterated the principle in B.C. Kame's case and held that the work done by the photographer is only in the nature of a service contract not involving any sale of goods and held that the stand taken by the State cannot be sustained.</p><p style="text-align: justify;">16. Learned Counsel for the petitioner submitted that the photographs taken by the petitioner are not goods which can be sold and is not a marketable commodity like any other goods. When the copies of photographs are made out, they have no utility or value to any other person than the customer. It is already admitted that the papers utilized for photographs are tax paid goods. Therefore, it is contended by the learned Counsel for the petitioner that the work of photography does not come within the purview of works contract as defined in Section 2(jj) of the Orissa Sales Tax Act.</p><p style="text-align: justify;">17. Learned Counsel for the Revenue in this case virtually did not contest the submission made by the learned Counsel for the petitioner and in support of his contention, learned Counsel for the Revenue relied on a decision of the Supreme Court in the case of Imagic Creative Pvt. Ltd. v. Commissioner of Commercial Taxes and Ors. reported in (2008) 10 RC 236. In that judgment, learned Judges held that since the contract in question is a service contract, it is difficult to hold that in a case of this nature, sales tax would be payable on the value of the entire contract irrespective of the element of service provided.</p><p style="text-align: justify;">For the reasons discussed above, we answer the first question in the negative and the second question, in the affirmative. We thus answer both the questions in favour of the assessee and against the Revenue.</p><p style="text-align: justify;">The three revision applications are thus disposed of.</p><p style="text-align: justify;">No costs.</p><p style="text-align: justify;">B.N. Mahapatra, J.</p><p style="text-align: justify;">18. I agree.<p style="text-align: justify;"></p><p style="text-align: justify;">',
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			'pubs' => '106(2008)CLT317; 2008(I)OLR953; (2008)17VST289(Orissa)',
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		'casename' => 'Studio Sujata Vs. Commissioner of Sales Tax',
		'casenote' => 'Sales Tax - Assessment - Contract of Sale - Section 12 (5) of Orissa Sales Tax 1947 - Petitioner carries on business of processing and developing photography - Revenue assessed petitioner under Section 12(5) of Act on ground that activities of petitioner can be called works contract - Petitioner approached to Assistant of Sales Tax on ground that there is no contract of sale between the petitioner and the client, it is only service - Dismissed and affirmed by Tribunal - Hence present petition - Whether Tribunal is right to held that tax is exigible for photographs as execution of works contract or not? - Held, as per precedent laid down by Supreme Court in case of Sales Tax Officer v. B.C. Kame that photographer takes photograph and develops negatives and does other photographic work and thereafter supplies prints to his client - By doing so he cannot be said to enter into contract for sale of goods - Therefore, job of photographer is contract for work and labour and it is not contract of sale - Revenue committed mistake in assessing petitioner under Section 12(5) of Act on basis of contract of sale - Petition disposed of accordingly  - STATE FINANCIAL CORPORATIONS ACT, 1951 [63/1951]. Section 29; [P.K. Tripathy, A.K. Parichha & N.Prusty, JJ] Discharge of loan  Orissa Forest Act (14 of 1972), Section 56  Confiscation of vehicle - Held, The Authorities under Section 56 of the Orissa Forest Act, 1972 are not obliged to release the vehicle from the confiscation proceeding or to pay the sale proceeds of the vehicle after the order of confiscation in favour of Orissa State Financial Corporation when such vehicles were purchased on being financed by the Orissa State Financial Corporation and the loan had not been liquidated by the date of the seizure/confiscation of the vehicle. Concept of first charge or second charge has no applicability when the vehicle is not otherwise disposed of to determine the liabilities of the loanee. On the other hand the vehicle having been found indulged in forest offences was made subject matter of a confiscation proceedings, and therefore, the procedure followed for confiscation of the vehicle and for its sale is punitive in nature and not with a view to give benefit to anybody including the Department which initiated the confiscation proceeding. Apart from that, the claim of the Orissa State Financial Corporation as against its loanee (who had taken the vehicle on hire- purchase agreement) brings the loanee and the sureties within the default clause under the State Financial Corporation Act, 1951 or the heirs and successors of such persons. Procedure is provided in the Act, 1951 and the Rules thereof about the manner in which such loan is to be recovered, and in that context only the vehicle under the hire-purchase agreement is placed as the first charge. If such property is not available for any reason, then the loan is not automatically waived or the loanee and his sureties are not automatically redeemed of the liabilities to repay. The Financial Corporation is concerned with repayment of loan either from the property or persons offered as surety. Thus, a vehicle, which is subject matter of confiscation proceeding under the Act, 1872, being not available to the Orissa State Financial Corporation for adjustment of the unpaid loan, that does not at all bring out an anomalous situation so as to defeat the right of the Orissa State Financial Corporation. Agreement between the Orissa State Financial Corporation and the loanee is a pure and simple contract governed by the provisions of the Contract Act, 1872 read with the provisions in the Act, 1951 and its Rules. On the other hand, a confiscation proceeding under the Act, 1972 is punitive in nature for commission of a forest offence. Thus, by virtue of the provision in Section 56 read with Section 64 (2) of the Act, 1972, the action taken for confiscation of the vehicle cannot be extended to grant protection of the loan advanced by Orissa State Financial Corporation. By doing that it amounts to grant premium to the pick-pockets in as much as, by making payment of the confiscation amount in favour of the Orissa State Financial Corporation the loan burden of the accused of the forest offence is reduced to the extent of the sale proceeds of the vehicle. In other words, on payment of the sale proceeds of the confiscation proceeding to the Orissa State Financial Corporation towards discharge of the loan account of the accused of a forest offence, it would lead to a system to reward him by repayment of his loan. Then it does not become a penalty nor the action become punitive, but it remains as a reward to the accused of forest offence. Such a concept is totally not conceivable from any provision in the Act, 1972 or the Act, 1951. [AIR 2002 Orissa 130 Overruled]. -- STATE FINANCIAL CORPORATIONS ACT, 1951. 
Section 29; Discharge of loan  Orissa Forest Act (14 of 1972), Section 56  Confiscation of vehicle - Held, The Authorities under Section 56 of the Orissa Forest Act, 1972 are not obliged to release the vehicle from the confiscation proceeding or to pay the sale proceeds of the vehicle after the order of confiscation in favour of Orissa State Financial Corporation when such vehicles were purchased on being financed by the Orissa State Financial Corporation and the loan had not been liquidated by the date of the seizure/confiscation of the vehicle. Concept of first charge or second charge has no applicability when the vehicle is not otherwise disposed of to determine the liabilities of the loanee. On the other hand the vehicle having been found indulged in forest offences was made subject matter of a confiscation proceedings, and therefore, the procedure followed for confiscation of the vehicle and for its sale is punitive in nature and not with a view to give benefit to anybody including the Department which initiated the confiscation proceeding. Apart from that, the claim of the Orissa State Financial Corporation as against its loanee (who had taken the vehicle on hire- purchase agreement) brings the loanee and the sureties within the default clause under the State Financial Corporation Act, 1951 or the heirs and successors of such persons. Procedure is provided in the Act, 1951 and the Rules thereof about the manner in which such loan is to be recovered, and in that context only the vehicle under the hire-purchase agreement is placed as the first charge. If such property is not available for any reason, then the loan is not automatically waived or the loanee and his sureties are not automatically redeemed of the liabilities to repay. The Financial Corporation is concerned with repayment of loan either from the property or persons offered as surety. Thus, a vehicle, which is subject matter of confiscation proceeding under the Act, 1872, being not available to the Orissa State Financial Corporation for adjustment of the unpaid loan, that does not at all bring out an anomalous situation so as to defeat the right of the Orissa State Financial Corporation. Agreement between the Orissa State Financial Corporation and the loanee is a pure and simple contract governed by the provisions of the Contract Act, 1872 read with the provisions in the Act, 1951 and its Rules. On the other hand, a confiscation proceeding under the Act, 1972 is punitive in nature for commission of a forest offence. Thus, by virtue of the provision in Section 56 read with Section 64 (2) of the Act, 1972, the action taken for confiscation of the vehicle cannot be extended to grant protection of the loan advanced by Orissa State Financial Corporation. By doing that it amounts to grant premium to the pick-pockets in as much as, by making payment of the confiscation amount in favour of the Orissa State Financial Corporation the loan burden of the accused of the forest offence is reduced to the extent of the sale proceeds of the vehicle. In other words, on payment of the sale proceeds of the confiscation proceeding to the Orissa State Financial Corporation towards discharge of the loan account of the accused of a forest offence, it would lead to a system to reward him by repayment of his loan. Then it does not become a penalty nor the action become punitive, but it remains as a reward to the accused of forest offence. Such a concept is totally not conceivable from any provision in the Act, 1972 or the Act, 1951. [AIR 2002 Orissa 130 Overruled].  -  In that case, the stand of the Revenue was disapproved by the Orissa High Court. 16. Learned Counsel for the petitioner submitted that the photographs taken by the petitioner are not goods which can be sold and is not a marketable commodity like any other goods.',
		'caseanalysis' => null,
		'casesref' => 'Imagic Creative Pvt. Ltd. v. Commissioner of Commercial Taxes and Ors.;',
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		'counselplain' => '',
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		'court' => 'Orissa',
		'court_type' => 'HC',
		'decidedon' => '2008-04-02',
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		'judge' => ' A.K. Ganguly, C.J. and; B.N. Mahapatra, J.',
		'judgement' => '<p>A.K. Ganguly, C.J.</p><p>1. Initially three S.J.Cs. being S.J.C. Nos. 10 of 1997, 8 of 1997 and 9 of 1997 were filed and subsequently renumbered as STREV Nos. 212, 214 and 216 of 2007 respectively. In view of the common questions of facts and law, all the three Revision Applications are heard and disposed of together.</p><p>2. The following questions of law arising out of the order passed by the Orissa Sales Tax Tribunal on 8.12.1993 in Second Appeal Nos. 3345 to 3350 of 1991-92 have been referred to this Hon'ble High Court in terms of the order of this Hon'ble Court dated 24.2.1997. The questions are:</p><p>(i) Whether on the facts and in the circumstances of the case, the Tribunal is right to held that tax is exigible for photographs as execution of works contract ?</p><p>(ii) Whether on the facts and in the circumstances of the case, the conclusion of the Tribunal is perverse due to non-consideration and mis-consideration of facts and law and, therefore, it is liable to be set aside for re-hearing ?</p><p>3. The materials facts out of which those questions arise are that the petitioner carries on the business of processing and developing photography. In the usual course of business, the petitioner takes photographs of persons or of family and then develops the negative by employing his skill and labour and then supplies the photographs to the clients. These photographs which are prepared by the petitioner are not commercial items because they are neither purchased nor sold. However, to develop these photographs employment of skill and labour is essential. It may be mentioned that petitioner does not carry on any sale of photographs of national leaders, God and Goddess.</p><p>4. After the passing of 46th amendment of the Constitution of India and consequent amendments thereto in Orissa Sales Tax Act (OST Act), the Sales Tax Officer, Bhubaneswar-II Circle, Bhubaneswar sent notices to assess the petitioner as an unregistered dealer under Section 12 (5) of the OST Act, inter alia, contending that the petitioner's activities can be called 'works contract'. Pursuant to said notice, the petitioner gave its reply and appeared before the Sales Tax Officer and produced the books of account and documents including Receipts, Purchase Memos, Vouchers, Ledger and thereby denied its liability under the OST Act. The petitioner also submitted objection petitions on various dates i.e. 28.12.1985, 10.1.1986, 20.2.1986 and 29.2.1988 contending, inter alia, that the petitioner has no sales tax liability under OST Act and the notices, which were issued, are without jurisdiction.</p><p>5. Ignoring the said objections of the petitioner, the Sales Tax Officer, Bhubaneswar-II Circle, Bhubaneswar assessed the petitioner as an unregistered dealer, inter alia, holding that the petitioner is liable to pay sales tax as petitioner has been alleged to carry activities of 'works contract'. Therefore, orders of assessment being dated 29.2.1988 for the years 1984-85 (9/84 to 3/85), 1985-86 and 1986- 87 under Section 12(5) of OST Act and under Rule 5 of the Orissa Additional Sales Tax Rules, 1975 were passed and a tax of Rs. 20,765.00 and penalty of Rs. 5,000.00 totalling to Rs. 25,765.00 was imposed on the petitioner. The petitioner then filed the First Appeal before the learned Assistant Commissioner of Sales Tax. The First Appellate Authority by an order dated 27.9.1991 confirmed the levy of tax under the OST Act, but reduced the penalty to Rs. 1250.00. Thereupon, the petitioner filed the Second Appeal before the Orissa Sales Tax Tribunal, Cuttack. The said Tribunal heard the Second Appeal and in course of hearing, the petitioner raised various contentions. Ultimately, the Tribunal upheld the levy of tax but deleted the penalty.</p><p>6. Thereafter the petitioner came up with a reference application under Section 24(1) of the Orissa Sales Tax Act framing certain questions for being referred to the Hon'ble High Court. The said prayer of the petitioner was rejected by the Tribunal. Then the petitioner moved Hon'ble High Court under Section 24(2)(b) of the Orissa Sales Tax Act, 1947 whereupon the High Court directed the Tribunal to state to case and refer the questions under Section 24(3) of the OST Act for a decision of the High Court.</p><p>7. Accordingly, the Tribunal stated the case and referred the aforesaid questions for a decision of the High Court.</p><p>8. Learned Counsel for the petitioner before the High Court submitted that in the transaction in question, there is no contract of sale between the petitioner and the client. It is only a contract of service and the photographs, which the petitioner produced by supplying the same has no commercial value and are not marketable. So, there is no question of a works contract. It is the consistent stand of the petitioner that the present photographs which are produced by the petitioner have no utility or value to any other person than the customer. By developing such photographs, the petitioner only renders service to his customers. The customer pays for the service rendered by the petitioner. It is the contention of the petitioner that his activity is similar to that of consulting firm preparing plan and sketches pursuant to client's specification or professional giving opinion on papers. All those activities are done to serve the client. Therefore, this does not come within the purview of the definition of 'goods', 'sale', 'dealer' or 'works contract'. It is the petitioner's case that he purchased the goods, namely, papers on payment of sales tax. Further levy of tax on the personal service rendered to the client of the petitioner will amount to double taxation. It is also the contention of the petitioner that the paper which is used in the photography are incidental and insignificant.</p><p>9. In support of its contention, learned Counsel for the petitioner has relied on several judgments. First reliance was place on the judgment of the Supreme Court in the case of Sales Tax Officer v. B.C. Kame reported in 39 STC 237(SC). At page 241 of the report, learned Judges of the Supreme Court held that a photographer takes the photograph and develops the negatives and does other photographic work and thereafter supplies the prints to his client. By doing so he cannot be said to enter into a contract for sale of goods. On the other hand, the contract is for use of skill and labour by the photographer to bring about the desired result. Learned Judges held that the job of a photographer is a contract for work and labour and it is not a contract of sale.</p><p>10. Reliance was also placed on a judgment of this High Court in the case of Photo Emporium v. Addl. District Magistrate reported in 77 STC 199 in which this High Court followed the ratio of the judgment of the Supreme Court in the case of B.C. Kame. In that case, the stand of the Revenue was disapproved by the Orissa High Court.</p><p>11. Similar view was taken in 110 STC 145 in the case of Foto Colour Labs Pvt. Ltd. v. Commercial Taxes Officer where the Tribunal held that the transfer of paper in the photograph is purely incidental and payment is only taken to give positive prints and not to get the photo papers. Therefore, the contract in between the petitioner and his client is not a contract of sale, and neither directly or indirectly works contract is involved in the supply of photo papers. Similar view was taken by the West Bengal Taxation Tribunal in the case of Studio Kamalalaya v. Commercial Tax Officer reported in 89 STC 307.</p><p>12. In the case of Bavens v. Onion of India report in 97 STC 161, learned Judges held that when a photographer takes a photograph of his customer, he develops the negative and supplies positive prints in the desired size to the customer. In doing so the photographer uses his own camera and his own film. The negative belongs to the photographer and not to the customer. No basic goods are provided by the customer which are subjected to processing by the photographer so as to make the contract a works contract. There is no accretion to goods or property or the nucleus of a property which belongs to the customer. It is the skill of the photographer which is most important to get the desired result.</p><p>13. Hon'ble Karnataka High Court followed the same principle in the case of Keshoram Surlndranath Photo-mag Pvt. Ltd. v. Assistant Commissioner of Commercial Taxes reported in 121 STC 175. In that judgment, learned Judges of the Karnataka High Court relied on the judgment of the Supreme Court in B.C. Kame's case and came to the conclusion that in the job of the photographer in supplying positive prints to his customer, no works contract is involved and photographs are not marketable or saleable commodity and as such no tax can be levied on it.</p><p>14. Against the said judgment of the Karnataka High Court, the State of Karnataka High Court filed a S.L.P. before the Hon'ble Supreme Court bearing SLP Nos. 6136-6163 of 2000 and the Hon'ble Supreme Court dismissed the SLP on 20th April, 2000.</p><p>15. In the case of Rainbow Colour Lab v. State of M.P. learned Judges of the Hon'ble Supreme Court reiterated its judgment in B.C. Kame's case and came to the following conclusion:</p><p>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.</p><p>Hon'ble Supreme Court in Bharat Sanchar Nigam Ltd. v. Union of India reported in 145 STC 91 again reiterated the principle in B.C. Kame's case and held that the work done by the photographer is only in the nature of a service contract not involving any sale of goods and held that the stand taken by the State cannot be sustained.</p><p>16. Learned Counsel for the petitioner submitted that the photographs taken by the petitioner are not goods which can be sold and is not a marketable commodity like any other goods. When the copies of photographs are made out, they have no utility or value to any other person than the customer. It is already admitted that the papers utilized for photographs are tax paid goods. Therefore, it is contended by the learned Counsel for the petitioner that the work of photography does not come within the purview of works contract as defined in Section 2(jj) of the Orissa Sales Tax Act.</p><p>17. Learned Counsel for the Revenue in this case virtually did not contest the submission made by the learned Counsel for the petitioner and in support of his contention, learned Counsel for the Revenue relied on a decision of the Supreme Court in the case of Imagic Creative Pvt. Ltd. v. Commissioner of Commercial Taxes and Ors. reported in (2008) 10 RC 236. In that judgment, learned Judges held that since the contract in question is a service contract, it is difficult to hold that in a case of this nature, sales tax would be payable on the value of the entire contract irrespective of the element of service provided.</p><p>For the reasons discussed above, we answer the first question in the negative and the second question, in the affirmative. We thus answer both the questions in favour of the assessee and against the Revenue.</p><p>The three revision applications are thus disposed of.</p><p>No costs.</p><p>B.N. Mahapatra, J.</p><p>18. I agree.<p></p><p>',
		'observations' => null,
		'overruledby' => null,
		'prhistory' => '',
		'pubs' => '106(2008)CLT317; 2008(I)OLR953; (2008)17VST289(Orissa)',
		'ratiodecidendi' => '',
		'respondent' => 'Commissioner of Sales Tax',
		'sub' => 'Sales Tax/VAT',
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$caseref = 'Imagic Creative Pvt. Ltd. v. Commissioner of Commercial Taxes and Ors.<br>'
$content = array(
	(int) 0 => '<p>A.K. Ganguly, C.J.',
	(int) 1 => '<p>1. Initially three S.J.Cs. being S.J.C. Nos. 10 of 1997, 8 of 1997 and 9 of 1997 were filed and subsequently renumbered as STREV Nos. 212, 214 and 216 of 2007 respectively. In view of the common questions of facts and law, all the three Revision Applications are heard and disposed of together.',
	(int) 2 => '<p>2. The following questions of law arising out of the order passed by the Orissa Sales Tax Tribunal on 8.12.1993 in Second Appeal Nos. 3345 to 3350 of 1991-92 have been referred to this Hon'ble High Court in terms of the order of this Hon'ble Court dated 24.2.1997. The questions are:',
	(int) 3 => '<p>(i) Whether on the facts and in the circumstances of the case, the Tribunal is right to held that tax is exigible for photographs as execution of works contract ?',
	(int) 4 => '<p>(ii) Whether on the facts and in the circumstances of the case, the conclusion of the Tribunal is perverse due to non-consideration and mis-consideration of facts and law and, therefore, it is liable to be set aside for re-hearing ?',
	(int) 5 => '<p>3. The materials facts out of which those questions arise are that the petitioner carries on the business of processing and developing photography. In the usual course of business, the petitioner takes photographs of persons or of family and then develops the negative by employing his skill and labour and then supplies the photographs to the clients. These photographs which are prepared by the petitioner are not commercial items because they are neither purchased nor sold. However, to develop these photographs employment of skill and labour is essential. It may be mentioned that petitioner does not carry on any sale of photographs of national leaders, God and Goddess.',
	(int) 6 => '<p>4. After the passing of 46th amendment of the Constitution of India and consequent amendments thereto in Orissa Sales Tax Act (OST Act), the Sales Tax Officer, Bhubaneswar-II Circle, Bhubaneswar sent notices to assess the petitioner as an unregistered dealer under Section 12 (5) of the OST Act, inter alia, contending that the petitioner's activities can be called 'works contract'. Pursuant to said notice, the petitioner gave its reply and appeared before the Sales Tax Officer and produced the books of account and documents including Receipts, Purchase Memos, Vouchers, Ledger and thereby denied its liability under the OST Act. The petitioner also submitted objection petitions on various dates i.e. 28.12.1985, 10.1.1986, 20.2.1986 and 29.2.1988 contending, inter alia, that the petitioner has no sales tax liability under OST Act and the notices, which were issued, are without jurisdiction.',
	(int) 7 => '<p>5. Ignoring the said objections of the petitioner, the Sales Tax Officer, Bhubaneswar-II Circle, Bhubaneswar assessed the petitioner as an unregistered dealer, inter alia, holding that the petitioner is liable to pay sales tax as petitioner has been alleged to carry activities of 'works contract'. Therefore, orders of assessment being dated 29.2.1988 for the years 1984-85 (9/84 to 3/85), 1985-86 and 1986- 87 under Section 12(5) of OST Act and under Rule 5 of the Orissa Additional Sales Tax Rules, 1975 were passed and a tax of Rs. 20,765.00 and penalty of Rs. 5,000.00 totalling to Rs. 25,765.00 was imposed on the petitioner. The petitioner then filed the First Appeal before the learned Assistant Commissioner of Sales Tax. The First Appellate Authority by an order dated 27.9.1991 confirmed the levy of tax under the OST Act, but reduced the penalty to Rs. 1250.00. Thereupon, the petitioner filed the Second Appeal before the Orissa Sales Tax Tribunal, Cuttack. The said Tribunal heard the Second Appeal and in course of hearing, the petitioner raised various contentions. Ultimately, the Tribunal upheld the levy of tax but deleted the penalty.',
	(int) 8 => '<p>6. Thereafter the petitioner came up with a reference application under Section 24(1) of the Orissa Sales Tax Act framing certain questions for being referred to the Hon'ble High Court. The said prayer of the petitioner was rejected by the Tribunal. Then the petitioner moved Hon'ble High Court under Section 24(2)(b) of the Orissa Sales Tax Act, 1947 whereupon the High Court directed the Tribunal to state to case and refer the questions under Section 24(3) of the OST Act for a decision of the High Court.',
	(int) 9 => '<p>7. Accordingly, the Tribunal stated the case and referred the aforesaid questions for a decision of the High Court.',
	(int) 10 => '<p>8. Learned Counsel for the petitioner before the High Court submitted that in the transaction in question, there is no contract of sale between the petitioner and the client. It is only a contract of service and the photographs, which the petitioner produced by supplying the same has no commercial value and are not marketable. So, there is no question of a works contract. It is the consistent stand of the petitioner that the present photographs which are produced by the petitioner have no utility or value to any other person than the customer. By developing such photographs, the petitioner only renders service to his customers. The customer pays for the service rendered by the petitioner. It is the contention of the petitioner that his activity is similar to that of consulting firm preparing plan and sketches pursuant to client's specification or professional giving opinion on papers. All those activities are done to serve the client. Therefore, this does not come within the purview of the definition of 'goods', 'sale', 'dealer' or 'works contract'. It is the petitioner's case that he purchased the goods, namely, papers on payment of sales tax. Further levy of tax on the personal service rendered to the client of the petitioner will amount to double taxation. It is also the contention of the petitioner that the paper which is used in the photography are incidental and insignificant.',
	(int) 11 => '<p>9. In support of its contention, learned Counsel for the petitioner has relied on several judgments. First reliance was place on the judgment of the Supreme Court in the case of Sales Tax Officer v. B.C. Kame reported in 39 STC 237(SC). At page 241 of the report, learned Judges of the Supreme Court held that a photographer takes the photograph and develops the negatives and does other photographic work and thereafter supplies the prints to his client. By doing so he cannot be said to enter into a contract for sale of goods. On the other hand, the contract is for use of skill and labour by the photographer to bring about the desired result. Learned Judges held that the job of a photographer is a contract for work and labour and it is not a contract of sale.',
	(int) 12 => '<p>10. Reliance was also placed on a judgment of this High Court in the case of Photo Emporium v. Addl. District Magistrate reported in 77 STC 199 in which this High Court followed the ratio of the judgment of the Supreme Court in the case of B.C. Kame. In that case, the stand of the Revenue was disapproved by the Orissa High Court.',
	(int) 13 => '<p>11. Similar view was taken in 110 STC 145 in the case of Foto Colour Labs Pvt. Ltd. v. Commercial Taxes Officer where the Tribunal held that the transfer of paper in the photograph is purely incidental and payment is only taken to give positive prints and not to get the photo papers. Therefore, the contract in between the petitioner and his client is not a contract of sale, and neither directly or indirectly works contract is involved in the supply of photo papers. Similar view was taken by the West Bengal Taxation Tribunal in the case of Studio Kamalalaya v. Commercial Tax Officer reported in 89 STC 307.',
	(int) 14 => '<p>12. In the case of Bavens v. Onion of India report in 97 STC 161, learned Judges held that when a photographer takes a photograph of his customer, he develops the negative and supplies positive prints in the desired size to the customer. In doing so the photographer uses his own camera and his own film. The negative belongs to the photographer and not to the customer. No basic goods are provided by the customer which are subjected to processing by the photographer so as to make the contract a works contract. There is no accretion to goods or property or the nucleus of a property which belongs to the customer. It is the skill of the photographer which is most important to get the desired result.',
	(int) 15 => '<p>13. Hon'ble Karnataka High Court followed the same principle in the case of Keshoram Surlndranath Photo-mag Pvt. Ltd. v. Assistant Commissioner of Commercial Taxes reported in 121 STC 175. In that judgment, learned Judges of the Karnataka High Court relied on the judgment of the Supreme Court in B.C. Kame's case and came to the conclusion that in the job of the photographer in supplying positive prints to his customer, no works contract is involved and photographs are not marketable or saleable commodity and as such no tax can be levied on it.',
	(int) 16 => '<p>14. Against the said judgment of the Karnataka High Court, the State of Karnataka High Court filed a S.L.P. before the Hon'ble Supreme Court bearing SLP Nos. 6136-6163 of 2000 and the Hon'ble Supreme Court dismissed the SLP on 20th April, 2000.',
	(int) 17 => '<p>15. In the case of Rainbow Colour Lab v. State of M.P. learned Judges of the Hon'ble Supreme Court reiterated its judgment in B.C. Kame's case and came to the following conclusion:',
	(int) 18 => '<p>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.',
	(int) 19 => '<p>Hon'ble Supreme Court in Bharat Sanchar Nigam Ltd. v. Union of India reported in 145 STC 91 again reiterated the principle in B.C. Kame's case and held that the work done by the photographer is only in the nature of a service contract not involving any sale of goods and held that the stand taken by the State cannot be sustained.',
	(int) 20 => '<p>16. Learned Counsel for the petitioner submitted that the photographs taken by the petitioner are not goods which can be sold and is not a marketable commodity like any other goods. When the copies of photographs are made out, they have no utility or value to any other person than the customer. It is already admitted that the papers utilized for photographs are tax paid goods. Therefore, it is contended by the learned Counsel for the petitioner that the work of photography does not come within the purview of works contract as defined in Section 2(jj) of the Orissa Sales Tax Act.',
	(int) 21 => '<p>17. Learned Counsel for the Revenue in this case virtually did not contest the submission made by the learned Counsel for the petitioner and in support of his contention, learned Counsel for the Revenue relied on a decision of the Supreme Court in the case of Imagic Creative Pvt. Ltd. v. Commissioner of Commercial Taxes and Ors. reported in (2008) 10 RC 236. In that judgment, learned Judges held that since the contract in question is a service contract, it is difficult to hold that in a case of this nature, sales tax would be payable on the value of the entire contract irrespective of the element of service provided.',
	(int) 22 => '<p>For the reasons discussed above, we answer the first question in the negative and the second question, in the affirmative. We thus answer both the questions in favour of the assessee and against the Revenue.',
	(int) 23 => '<p>The three revision applications are thus disposed of.',
	(int) 24 => '<p>No costs.',
	(int) 25 => '<p>B.N. Mahapatra, J.',
	(int) 26 => '<p>18. I agree.<p>',
	(int) 27 => '<p>'
)
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4. After the passing of 46th amendment of the Constitution of India and consequent amendments thereto in Orissa Sales Tax Act (OST Act), the Sales Tax Officer, Bhubaneswar-II Circle, Bhubaneswar sent notices to assess the petitioner as an unregistered dealer under Section 12 (5) of the OST Act, inter alia, contending that the petitioner's activities can be called 'works contract'. Pursuant to said notice, the petitioner gave its reply and appeared before the Sales Tax Officer and produced the books of account and documents including Receipts, Purchase Memos, Vouchers, Ledger and thereby denied its liability under the OST Act. The petitioner also submitted objection petitions on various dates i.e. 28.12.1985, 10.1.1986, 20.2.1986 and 29.2.1988 contending, inter alia, that the petitioner has no sales tax liability under OST Act and the notices, which were issued, are without jurisdiction.

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			'acts' => '',
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			'appellant' => 'Studio Sujata',
			'authreffered' => '',
			'casename' => 'Studio Sujata Vs. Commissioner of Sales Tax',
			'casenote' => 'Sales Tax - Assessment - Contract of Sale - Section 12 (5) of Orissa Sales Tax 1947 - Petitioner carries on business of processing and developing photography - Revenue assessed petitioner under Section 12(5) of Act on ground that activities of petitioner can be called works contract - Petitioner approached to Assistant of Sales Tax on ground that there is no contract of sale between the petitioner and the client, it is only service - Dismissed and affirmed by Tribunal - Hence present petition - Whether Tribunal is right to held that tax is exigible for photographs as execution of works contract or not? - Held, as per precedent laid down by Supreme Court in case of Sales Tax Officer v. B.C. Kame that photographer takes photograph and develops negatives and does other photographic work and thereafter supplies prints to his client - By doing so he cannot be said to enter into contract for sale of goods - Therefore, job of photographer is contract for work and labour and it is not contract of sale - Revenue committed mistake in assessing petitioner under Section 12(5) of Act on basis of contract of sale - Petition disposed of accordingly  - STATE FINANCIAL CORPORATIONS ACT, 1951 [63/1951]. Section 29; [P.K. Tripathy, A.K. Parichha & N.Prusty, JJ] Discharge of loan  Orissa Forest Act (14 of 1972), Section 56  Confiscation of vehicle - Held, The Authorities under Section 56 of the Orissa Forest Act, 1972 are not obliged to release the vehicle from the confiscation proceeding or to pay the sale proceeds of the vehicle after the order of confiscation in favour of Orissa State Financial Corporation when such vehicles were purchased on being financed by the Orissa State Financial Corporation and the loan had not been liquidated by the date of the seizure/confiscation of the vehicle. Concept of first charge or second charge has no applicability when the vehicle is not otherwise disposed of to determine the liabilities of the loanee. On the other hand the vehicle having been found indulged in forest offences was made subject matter of a confiscation proceedings, and therefore, the procedure followed for confiscation of the vehicle and for its sale is punitive in nature and not with a view to give benefit to anybody including the Department which initiated the confiscation proceeding. Apart from that, the claim of the Orissa State Financial Corporation as against its loanee (who had taken the vehicle on hire- purchase agreement) brings the loanee and the sureties within the default clause under the State Financial Corporation Act, 1951 or the heirs and successors of such persons. Procedure is provided in the Act, 1951 and the Rules thereof about the manner in which such loan is to be recovered, and in that context only the vehicle under the hire-purchase agreement is placed as the first charge. If such property is not available for any reason, then the loan is not automatically waived or the loanee and his sureties are not automatically redeemed of the liabilities to repay. The Financial Corporation is concerned with repayment of loan either from the property or persons offered as surety. Thus, a vehicle, which is subject matter of confiscation proceeding under the Act, 1872, being not available to the Orissa State Financial Corporation for adjustment of the unpaid loan, that does not at all bring out an anomalous situation so as to defeat the right of the Orissa State Financial Corporation. Agreement between the Orissa State Financial Corporation and the loanee is a pure and simple contract governed by the provisions of the Contract Act, 1872 read with the provisions in the Act, 1951 and its Rules. On the other hand, a confiscation proceeding under the Act, 1972 is punitive in nature for commission of a forest offence. Thus, by virtue of the provision in Section 56 read with Section 64 (2) of the Act, 1972, the action taken for confiscation of the vehicle cannot be extended to grant protection of the loan advanced by Orissa State Financial Corporation. By doing that it amounts to grant premium to the pick-pockets in as much as, by making payment of the confiscation amount in favour of the Orissa State Financial Corporation the loan burden of the accused of the forest offence is reduced to the extent of the sale proceeds of the vehicle. In other words, on payment of the sale proceeds of the confiscation proceeding to the Orissa State Financial Corporation towards discharge of the loan account of the accused of a forest offence, it would lead to a system to reward him by repayment of his loan. Then it does not become a penalty nor the action become punitive, but it remains as a reward to the accused of forest offence. Such a concept is totally not conceivable from any provision in the Act, 1972 or the Act, 1951. [AIR 2002 Orissa 130 Overruled]. -- STATE FINANCIAL CORPORATIONS ACT, 1951. 
Section 29; Discharge of loan  Orissa Forest Act (14 of 1972), Section 56  Confiscation of vehicle - Held, The Authorities under Section 56 of the Orissa Forest Act, 1972 are not obliged to release the vehicle from the confiscation proceeding or to pay the sale proceeds of the vehicle after the order of confiscation in favour of Orissa State Financial Corporation when such vehicles were purchased on being financed by the Orissa State Financial Corporation and the loan had not been liquidated by the date of the seizure/confiscation of the vehicle. Concept of first charge or second charge has no applicability when the vehicle is not otherwise disposed of to determine the liabilities of the loanee. On the other hand the vehicle having been found indulged in forest offences was made subject matter of a confiscation proceedings, and therefore, the procedure followed for confiscation of the vehicle and for its sale is punitive in nature and not with a view to give benefit to anybody including the Department which initiated the confiscation proceeding. Apart from that, the claim of the Orissa State Financial Corporation as against its loanee (who had taken the vehicle on hire- purchase agreement) brings the loanee and the sureties within the default clause under the State Financial Corporation Act, 1951 or the heirs and successors of such persons. Procedure is provided in the Act, 1951 and the Rules thereof about the manner in which such loan is to be recovered, and in that context only the vehicle under the hire-purchase agreement is placed as the first charge. If such property is not available for any reason, then the loan is not automatically waived or the loanee and his sureties are not automatically redeemed of the liabilities to repay. The Financial Corporation is concerned with repayment of loan either from the property or persons offered as surety. Thus, a vehicle, which is subject matter of confiscation proceeding under the Act, 1872, being not available to the Orissa State Financial Corporation for adjustment of the unpaid loan, that does not at all bring out an anomalous situation so as to defeat the right of the Orissa State Financial Corporation. Agreement between the Orissa State Financial Corporation and the loanee is a pure and simple contract governed by the provisions of the Contract Act, 1872 read with the provisions in the Act, 1951 and its Rules. On the other hand, a confiscation proceeding under the Act, 1972 is punitive in nature for commission of a forest offence. Thus, by virtue of the provision in Section 56 read with Section 64 (2) of the Act, 1972, the action taken for confiscation of the vehicle cannot be extended to grant protection of the loan advanced by Orissa State Financial Corporation. By doing that it amounts to grant premium to the pick-pockets in as much as, by making payment of the confiscation amount in favour of the Orissa State Financial Corporation the loan burden of the accused of the forest offence is reduced to the extent of the sale proceeds of the vehicle. In other words, on payment of the sale proceeds of the confiscation proceeding to the Orissa State Financial Corporation towards discharge of the loan account of the accused of a forest offence, it would lead to a system to reward him by repayment of his loan. Then it does not become a penalty nor the action become punitive, but it remains as a reward to the accused of forest offence. Such a concept is totally not conceivable from any provision in the Act, 1972 or the Act, 1951. [AIR 2002 Orissa 130 Overruled].  -  In that case, the stand of the Revenue was disapproved by the Orissa High Court. 16. Learned Counsel for the petitioner submitted that the photographs taken by the petitioner are not goods which can be sold and is not a marketable commodity like any other goods.',
			'caseanalysis' => null,
			'casesref' => 'Imagic Creative Pvt. Ltd. v. Commissioner of Commercial Taxes and Ors.;',
			'citingcases' => '',
			'counselplain' => '',
			'counseldef' => '',
			'court' => 'Orissa',
			'court_type' => 'HC',
			'decidedon' => '2008-04-02',
			'deposition' => '',
			'favorof' => null,
			'findings' => null,
			'judge' => ' A.K. Ganguly, C.J. and; B.N. Mahapatra, J.',
			'judgement' => '<p style="text-align: justify;">A.K. Ganguly, C.J.</p><p style="text-align: justify;">1. Initially three S.J.Cs. being S.J.C. Nos. 10 of 1997, 8 of 1997 and 9 of 1997 were filed and subsequently renumbered as STREV Nos. 212, 214 and 216 of 2007 respectively. In view of the common questions of facts and law, all the three Revision Applications are heard and disposed of together.</p><p style="text-align: justify;">2. The following questions of law arising out of the order passed by the Orissa Sales Tax Tribunal on 8.12.1993 in Second Appeal Nos. 3345 to 3350 of 1991-92 have been referred to this Hon'ble High Court in terms of the order of this Hon'ble Court dated 24.2.1997. The questions are:</p><p style="text-align: justify;">(i) Whether on the facts and in the circumstances of the case, the Tribunal is right to held that tax is exigible for photographs as execution of works contract ?</p><p style="text-align: justify;">(ii) Whether on the facts and in the circumstances of the case, the conclusion of the Tribunal is perverse due to non-consideration and mis-consideration of facts and law and, therefore, it is liable to be set aside for re-hearing ?</p><p style="text-align: justify;">3. The materials facts out of which those questions arise are that the petitioner carries on the business of processing and developing photography. In the usual course of business, the petitioner takes photographs of persons or of family and then develops the negative by employing his skill and labour and then supplies the photographs to the clients. These photographs which are prepared by the petitioner are not commercial items because they are neither purchased nor sold. However, to develop these photographs employment of skill and labour is essential. It may be mentioned that petitioner does not carry on any sale of photographs of national leaders, God and Goddess.</p><p style="text-align: justify;">4. After the passing of 46th amendment of the Constitution of India and consequent amendments thereto in Orissa Sales Tax Act (OST Act), the Sales Tax Officer, Bhubaneswar-II Circle, Bhubaneswar sent notices to assess the petitioner as an unregistered dealer under Section 12 (5) of the OST Act, inter alia, contending that the petitioner's activities can be called 'works contract'. Pursuant to said notice, the petitioner gave its reply and appeared before the Sales Tax Officer and produced the books of account and documents including Receipts, Purchase Memos, Vouchers, Ledger and thereby denied its liability under the OST Act. The petitioner also submitted objection petitions on various dates i.e. 28.12.1985, 10.1.1986, 20.2.1986 and 29.2.1988 contending, inter alia, that the petitioner has no sales tax liability under OST Act and the notices, which were issued, are without jurisdiction.</p><p style="text-align: justify;">5. Ignoring the said objections of the petitioner, the Sales Tax Officer, Bhubaneswar-II Circle, Bhubaneswar assessed the petitioner as an unregistered dealer, inter alia, holding that the petitioner is liable to pay sales tax as petitioner has been alleged to carry activities of 'works contract'. Therefore, orders of assessment being dated 29.2.1988 for the years 1984-85 (9/84 to 3/85), 1985-86 and 1986- 87 under Section 12(5) of OST Act and under Rule 5 of the Orissa Additional Sales Tax Rules, 1975 were passed and a tax of Rs. 20,765.00 and penalty of Rs. 5,000.00 totalling to Rs. 25,765.00 was imposed on the petitioner. The petitioner then filed the First Appeal before the learned Assistant Commissioner of Sales Tax. The First Appellate Authority by an order dated 27.9.1991 confirmed the levy of tax under the OST Act, but reduced the penalty to Rs. 1250.00. Thereupon, the petitioner filed the Second Appeal before the Orissa Sales Tax Tribunal, Cuttack. The said Tribunal heard the Second Appeal and in course of hearing, the petitioner raised various contentions. Ultimately, the Tribunal upheld the levy of tax but deleted the penalty.</p><p style="text-align: justify;">6. Thereafter the petitioner came up with a reference application under Section 24(1) of the Orissa Sales Tax Act framing certain questions for being referred to the Hon'ble High Court. The said prayer of the petitioner was rejected by the Tribunal. Then the petitioner moved Hon'ble High Court under Section 24(2)(b) of the Orissa Sales Tax Act, 1947 whereupon the High Court directed the Tribunal to state to case and refer the questions under Section 24(3) of the OST Act for a decision of the High Court.</p><p style="text-align: justify;">7. Accordingly, the Tribunal stated the case and referred the aforesaid questions for a decision of the High Court.</p><p style="text-align: justify;">8. Learned Counsel for the petitioner before the High Court submitted that in the transaction in question, there is no contract of sale between the petitioner and the client. It is only a contract of service and the photographs, which the petitioner produced by supplying the same has no commercial value and are not marketable. So, there is no question of a works contract. It is the consistent stand of the petitioner that the present photographs which are produced by the petitioner have no utility or value to any other person than the customer. By developing such photographs, the petitioner only renders service to his customers. The customer pays for the service rendered by the petitioner. It is the contention of the petitioner that his activity is similar to that of consulting firm preparing plan and sketches pursuant to client's specification or professional giving opinion on papers. All those activities are done to serve the client. Therefore, this does not come within the purview of the definition of 'goods', 'sale', 'dealer' or 'works contract'. It is the petitioner's case that he purchased the goods, namely, papers on payment of sales tax. Further levy of tax on the personal service rendered to the client of the petitioner will amount to double taxation. It is also the contention of the petitioner that the paper which is used in the photography are incidental and insignificant.</p><p style="text-align: justify;">9. In support of its contention, learned Counsel for the petitioner has relied on several judgments. First reliance was place on the judgment of the Supreme Court in the case of Sales Tax Officer v. B.C. Kame reported in 39 STC 237(SC). At page 241 of the report, learned Judges of the Supreme Court held that a photographer takes the photograph and develops the negatives and does other photographic work and thereafter supplies the prints to his client. By doing so he cannot be said to enter into a contract for sale of goods. On the other hand, the contract is for use of skill and labour by the photographer to bring about the desired result. Learned Judges held that the job of a photographer is a contract for work and labour and it is not a contract of sale.</p><p style="text-align: justify;">10. Reliance was also placed on a judgment of this High Court in the case of Photo Emporium v. Addl. District Magistrate reported in 77 STC 199 in which this High Court followed the ratio of the judgment of the Supreme Court in the case of B.C. Kame. In that case, the stand of the Revenue was disapproved by the Orissa High Court.</p><p style="text-align: justify;">11. Similar view was taken in 110 STC 145 in the case of Foto Colour Labs Pvt. Ltd. v. Commercial Taxes Officer where the Tribunal held that the transfer of paper in the photograph is purely incidental and payment is only taken to give positive prints and not to get the photo papers. Therefore, the contract in between the petitioner and his client is not a contract of sale, and neither directly or indirectly works contract is involved in the supply of photo papers. Similar view was taken by the West Bengal Taxation Tribunal in the case of Studio Kamalalaya v. Commercial Tax Officer reported in 89 STC 307.</p><p style="text-align: justify;">12. In the case of Bavens v. Onion of India report in 97 STC 161, learned Judges held that when a photographer takes a photograph of his customer, he develops the negative and supplies positive prints in the desired size to the customer. In doing so the photographer uses his own camera and his own film. The negative belongs to the photographer and not to the customer. No basic goods are provided by the customer which are subjected to processing by the photographer so as to make the contract a works contract. There is no accretion to goods or property or the nucleus of a property which belongs to the customer. It is the skill of the photographer which is most important to get the desired result.</p><p style="text-align: justify;">13. Hon'ble Karnataka High Court followed the same principle in the case of Keshoram Surlndranath Photo-mag Pvt. Ltd. v. Assistant Commissioner of Commercial Taxes reported in 121 STC 175. In that judgment, learned Judges of the Karnataka High Court relied on the judgment of the Supreme Court in B.C. Kame's case and came to the conclusion that in the job of the photographer in supplying positive prints to his customer, no works contract is involved and photographs are not marketable or saleable commodity and as such no tax can be levied on it.</p><p style="text-align: justify;">14. Against the said judgment of the Karnataka High Court, the State of Karnataka High Court filed a S.L.P. before the Hon'ble Supreme Court bearing SLP Nos. 6136-6163 of 2000 and the Hon'ble Supreme Court dismissed the SLP on 20th April, 2000.</p><p style="text-align: justify;">15. In the case of Rainbow Colour Lab v. State of M.P. learned Judges of the Hon'ble Supreme Court reiterated its judgment in B.C. Kame's case and came to the following conclusion:</p><p style="text-align: justify;">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.</p><p style="text-align: justify;">Hon'ble Supreme Court in Bharat Sanchar Nigam Ltd. v. Union of India reported in 145 STC 91 again reiterated the principle in B.C. Kame's case and held that the work done by the photographer is only in the nature of a service contract not involving any sale of goods and held that the stand taken by the State cannot be sustained.</p><p style="text-align: justify;">16. Learned Counsel for the petitioner submitted that the photographs taken by the petitioner are not goods which can be sold and is not a marketable commodity like any other goods. When the copies of photographs are made out, they have no utility or value to any other person than the customer. It is already admitted that the papers utilized for photographs are tax paid goods. Therefore, it is contended by the learned Counsel for the petitioner that the work of photography does not come within the purview of works contract as defined in Section 2(jj) of the Orissa Sales Tax Act.</p><p style="text-align: justify;">17. Learned Counsel for the Revenue in this case virtually did not contest the submission made by the learned Counsel for the petitioner and in support of his contention, learned Counsel for the Revenue relied on a decision of the Supreme Court in the case of Imagic Creative Pvt. Ltd. v. Commissioner of Commercial Taxes and Ors. reported in (2008) 10 RC 236. In that judgment, learned Judges held that since the contract in question is a service contract, it is difficult to hold that in a case of this nature, sales tax would be payable on the value of the entire contract irrespective of the element of service provided.</p><p style="text-align: justify;">For the reasons discussed above, we answer the first question in the negative and the second question, in the affirmative. We thus answer both the questions in favour of the assessee and against the Revenue.</p><p style="text-align: justify;">The three revision applications are thus disposed of.</p><p style="text-align: justify;">No costs.</p><p style="text-align: justify;">B.N. Mahapatra, J.</p><p style="text-align: justify;">18. I agree.<p style="text-align: justify;"></p><p style="text-align: justify;">',
			'observations' => null,
			'overruledby' => null,
			'prhistory' => '',
			'pubs' => '106(2008)CLT317; 2008(I)OLR953; (2008)17VST289(Orissa)',
			'ratiodecidendi' => '',
			'respondent' => 'Commissioner of Sales Tax',
			'sub' => 'Sales Tax/VAT',
			'link' => null,
			'circuit' => null
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$title_for_layout = 'Studio Sujata Vs Commissioner of Sales Tax - Citation 531271 - Court Judgment | '
$desc = array(
	'Judgement' => array(
		'id' => '531271',
		'acts' => '',
		'appealno' => '',
		'appellant' => 'Studio Sujata',
		'authreffered' => '',
		'casename' => 'Studio Sujata Vs. Commissioner of Sales Tax',
		'casenote' => 'Sales Tax - Assessment - Contract of Sale - Section 12 (5) of Orissa Sales Tax 1947 - Petitioner carries on business of processing and developing photography - Revenue assessed petitioner under Section 12(5) of Act on ground that activities of petitioner can be called works contract - Petitioner approached to Assistant of Sales Tax on ground that there is no contract of sale between the petitioner and the client, it is only service - Dismissed and affirmed by Tribunal - Hence present petition - Whether Tribunal is right to held that tax is exigible for photographs as execution of works contract or not? - Held, as per precedent laid down by Supreme Court in case of Sales Tax Officer v. B.C. Kame that photographer takes photograph and develops negatives and does other photographic work and thereafter supplies prints to his client - By doing so he cannot be said to enter into contract for sale of goods - Therefore, job of photographer is contract for work and labour and it is not contract of sale - Revenue committed mistake in assessing petitioner under Section 12(5) of Act on basis of contract of sale - Petition disposed of accordingly  - STATE FINANCIAL CORPORATIONS ACT, 1951 [63/1951]. Section 29; [P.K. Tripathy, A.K. Parichha & N.Prusty, JJ] Discharge of loan  Orissa Forest Act (14 of 1972), Section 56  Confiscation of vehicle - Held, The Authorities under Section 56 of the Orissa Forest Act, 1972 are not obliged to release the vehicle from the confiscation proceeding or to pay the sale proceeds of the vehicle after the order of confiscation in favour of Orissa State Financial Corporation when such vehicles were purchased on being financed by the Orissa State Financial Corporation and the loan had not been liquidated by the date of the seizure/confiscation of the vehicle. Concept of first charge or second charge has no applicability when the vehicle is not otherwise disposed of to determine the liabilities of the loanee. On the other hand the vehicle having been found indulged in forest offences was made subject matter of a confiscation proceedings, and therefore, the procedure followed for confiscation of the vehicle and for its sale is punitive in nature and not with a view to give benefit to anybody including the Department which initiated the confiscation proceeding. Apart from that, the claim of the Orissa State Financial Corporation as against its loanee (who had taken the vehicle on hire- purchase agreement) brings the loanee and the sureties within the default clause under the State Financial Corporation Act, 1951 or the heirs and successors of such persons. Procedure is provided in the Act, 1951 and the Rules thereof about the manner in which such loan is to be recovered, and in that context only the vehicle under the hire-purchase agreement is placed as the first charge. If such property is not available for any reason, then the loan is not automatically waived or the loanee and his sureties are not automatically redeemed of the liabilities to repay. The Financial Corporation is concerned with repayment of loan either from the property or persons offered as surety. Thus, a vehicle, which is subject matter of confiscation proceeding under the Act, 1872, being not available to the Orissa State Financial Corporation for adjustment of the unpaid loan, that does not at all bring out an anomalous situation so as to defeat the right of the Orissa State Financial Corporation. Agreement between the Orissa State Financial Corporation and the loanee is a pure and simple contract governed by the provisions of the Contract Act, 1872 read with the provisions in the Act, 1951 and its Rules. On the other hand, a confiscation proceeding under the Act, 1972 is punitive in nature for commission of a forest offence. Thus, by virtue of the provision in Section 56 read with Section 64 (2) of the Act, 1972, the action taken for confiscation of the vehicle cannot be extended to grant protection of the loan advanced by Orissa State Financial Corporation. By doing that it amounts to grant premium to the pick-pockets in as much as, by making payment of the confiscation amount in favour of the Orissa State Financial Corporation the loan burden of the accused of the forest offence is reduced to the extent of the sale proceeds of the vehicle. In other words, on payment of the sale proceeds of the confiscation proceeding to the Orissa State Financial Corporation towards discharge of the loan account of the accused of a forest offence, it would lead to a system to reward him by repayment of his loan. Then it does not become a penalty nor the action become punitive, but it remains as a reward to the accused of forest offence. Such a concept is totally not conceivable from any provision in the Act, 1972 or the Act, 1951. [AIR 2002 Orissa 130 Overruled]. -- STATE FINANCIAL CORPORATIONS ACT, 1951. 
Section 29; Discharge of loan  Orissa Forest Act (14 of 1972), Section 56  Confiscation of vehicle - Held, The Authorities under Section 56 of the Orissa Forest Act, 1972 are not obliged to release the vehicle from the confiscation proceeding or to pay the sale proceeds of the vehicle after the order of confiscation in favour of Orissa State Financial Corporation when such vehicles were purchased on being financed by the Orissa State Financial Corporation and the loan had not been liquidated by the date of the seizure/confiscation of the vehicle. Concept of first charge or second charge has no applicability when the vehicle is not otherwise disposed of to determine the liabilities of the loanee. On the other hand the vehicle having been found indulged in forest offences was made subject matter of a confiscation proceedings, and therefore, the procedure followed for confiscation of the vehicle and for its sale is punitive in nature and not with a view to give benefit to anybody including the Department which initiated the confiscation proceeding. Apart from that, the claim of the Orissa State Financial Corporation as against its loanee (who had taken the vehicle on hire- purchase agreement) brings the loanee and the sureties within the default clause under the State Financial Corporation Act, 1951 or the heirs and successors of such persons. Procedure is provided in the Act, 1951 and the Rules thereof about the manner in which such loan is to be recovered, and in that context only the vehicle under the hire-purchase agreement is placed as the first charge. If such property is not available for any reason, then the loan is not automatically waived or the loanee and his sureties are not automatically redeemed of the liabilities to repay. The Financial Corporation is concerned with repayment of loan either from the property or persons offered as surety. Thus, a vehicle, which is subject matter of confiscation proceeding under the Act, 1872, being not available to the Orissa State Financial Corporation for adjustment of the unpaid loan, that does not at all bring out an anomalous situation so as to defeat the right of the Orissa State Financial Corporation. Agreement between the Orissa State Financial Corporation and the loanee is a pure and simple contract governed by the provisions of the Contract Act, 1872 read with the provisions in the Act, 1951 and its Rules. On the other hand, a confiscation proceeding under the Act, 1972 is punitive in nature for commission of a forest offence. Thus, by virtue of the provision in Section 56 read with Section 64 (2) of the Act, 1972, the action taken for confiscation of the vehicle cannot be extended to grant protection of the loan advanced by Orissa State Financial Corporation. By doing that it amounts to grant premium to the pick-pockets in as much as, by making payment of the confiscation amount in favour of the Orissa State Financial Corporation the loan burden of the accused of the forest offence is reduced to the extent of the sale proceeds of the vehicle. In other words, on payment of the sale proceeds of the confiscation proceeding to the Orissa State Financial Corporation towards discharge of the loan account of the accused of a forest offence, it would lead to a system to reward him by repayment of his loan. Then it does not become a penalty nor the action become punitive, but it remains as a reward to the accused of forest offence. Such a concept is totally not conceivable from any provision in the Act, 1972 or the Act, 1951. [AIR 2002 Orissa 130 Overruled].  -  In that case, the stand of the Revenue was disapproved by the Orissa High Court. 16. Learned Counsel for the petitioner submitted that the photographs taken by the petitioner are not goods which can be sold and is not a marketable commodity like any other goods.',
		'caseanalysis' => null,
		'casesref' => 'Imagic Creative Pvt. Ltd. v. Commissioner of Commercial Taxes and Ors.;',
		'citingcases' => '',
		'counselplain' => '',
		'counseldef' => '',
		'court' => 'Orissa',
		'court_type' => 'HC',
		'decidedon' => '2008-04-02',
		'deposition' => '',
		'favorof' => null,
		'findings' => null,
		'judge' => ' A.K. Ganguly, C.J. and; B.N. Mahapatra, J.',
		'judgement' => '<p>A.K. Ganguly, C.J.</p><p>1. Initially three S.J.Cs. being S.J.C. Nos. 10 of 1997, 8 of 1997 and 9 of 1997 were filed and subsequently renumbered as STREV Nos. 212, 214 and 216 of 2007 respectively. In view of the common questions of facts and law, all the three Revision Applications are heard and disposed of together.</p><p>2. The following questions of law arising out of the order passed by the Orissa Sales Tax Tribunal on 8.12.1993 in Second Appeal Nos. 3345 to 3350 of 1991-92 have been referred to this Hon'ble High Court in terms of the order of this Hon'ble Court dated 24.2.1997. The questions are:</p><p>(i) Whether on the facts and in the circumstances of the case, the Tribunal is right to held that tax is exigible for photographs as execution of works contract ?</p><p>(ii) Whether on the facts and in the circumstances of the case, the conclusion of the Tribunal is perverse due to non-consideration and mis-consideration of facts and law and, therefore, it is liable to be set aside for re-hearing ?</p><p>3. The materials facts out of which those questions arise are that the petitioner carries on the business of processing and developing photography. In the usual course of business, the petitioner takes photographs of persons or of family and then develops the negative by employing his skill and labour and then supplies the photographs to the clients. These photographs which are prepared by the petitioner are not commercial items because they are neither purchased nor sold. However, to develop these photographs employment of skill and labour is essential. It may be mentioned that petitioner does not carry on any sale of photographs of national leaders, God and Goddess.</p><p>4. After the passing of 46th amendment of the Constitution of India and consequent amendments thereto in Orissa Sales Tax Act (OST Act), the Sales Tax Officer, Bhubaneswar-II Circle, Bhubaneswar sent notices to assess the petitioner as an unregistered dealer under Section 12 (5) of the OST Act, inter alia, contending that the petitioner's activities can be called 'works contract'. Pursuant to said notice, the petitioner gave its reply and appeared before the Sales Tax Officer and produced the books of account and documents including Receipts, Purchase Memos, Vouchers, Ledger and thereby denied its liability under the OST Act. The petitioner also submitted objection petitions on various dates i.e. 28.12.1985, 10.1.1986, 20.2.1986 and 29.2.1988 contending, inter alia, that the petitioner has no sales tax liability under OST Act and the notices, which were issued, are without jurisdiction.</p><p>5. Ignoring the said objections of the petitioner, the Sales Tax Officer, Bhubaneswar-II Circle, Bhubaneswar assessed the petitioner as an unregistered dealer, inter alia, holding that the petitioner is liable to pay sales tax as petitioner has been alleged to carry activities of 'works contract'. Therefore, orders of assessment being dated 29.2.1988 for the years 1984-85 (9/84 to 3/85), 1985-86 and 1986- 87 under Section 12(5) of OST Act and under Rule 5 of the Orissa Additional Sales Tax Rules, 1975 were passed and a tax of Rs. 20,765.00 and penalty of Rs. 5,000.00 totalling to Rs. 25,765.00 was imposed on the petitioner. The petitioner then filed the First Appeal before the learned Assistant Commissioner of Sales Tax. The First Appellate Authority by an order dated 27.9.1991 confirmed the levy of tax under the OST Act, but reduced the penalty to Rs. 1250.00. Thereupon, the petitioner filed the Second Appeal before the Orissa Sales Tax Tribunal, Cuttack. The said Tribunal heard the Second Appeal and in course of hearing, the petitioner raised various contentions. Ultimately, the Tribunal upheld the levy of tax but deleted the penalty.</p><p>6. Thereafter the petitioner came up with a reference application under Section 24(1) of the Orissa Sales Tax Act framing certain questions for being referred to the Hon'ble High Court. The said prayer of the petitioner was rejected by the Tribunal. Then the petitioner moved Hon'ble High Court under Section 24(2)(b) of the Orissa Sales Tax Act, 1947 whereupon the High Court directed the Tribunal to state to case and refer the questions under Section 24(3) of the OST Act for a decision of the High Court.</p><p>7. Accordingly, the Tribunal stated the case and referred the aforesaid questions for a decision of the High Court.</p><p>8. Learned Counsel for the petitioner before the High Court submitted that in the transaction in question, there is no contract of sale between the petitioner and the client. It is only a contract of service and the photographs, which the petitioner produced by supplying the same has no commercial value and are not marketable. So, there is no question of a works contract. It is the consistent stand of the petitioner that the present photographs which are produced by the petitioner have no utility or value to any other person than the customer. By developing such photographs, the petitioner only renders service to his customers. The customer pays for the service rendered by the petitioner. It is the contention of the petitioner that his activity is similar to that of consulting firm preparing plan and sketches pursuant to client's specification or professional giving opinion on papers. All those activities are done to serve the client. Therefore, this does not come within the purview of the definition of 'goods', 'sale', 'dealer' or 'works contract'. It is the petitioner's case that he purchased the goods, namely, papers on payment of sales tax. Further levy of tax on the personal service rendered to the client of the petitioner will amount to double taxation. It is also the contention of the petitioner that the paper which is used in the photography are incidental and insignificant.</p><p>9. In support of its contention, learned Counsel for the petitioner has relied on several judgments. First reliance was place on the judgment of the Supreme Court in the case of Sales Tax Officer v. B.C. Kame reported in 39 STC 237(SC). At page 241 of the report, learned Judges of the Supreme Court held that a photographer takes the photograph and develops the negatives and does other photographic work and thereafter supplies the prints to his client. By doing so he cannot be said to enter into a contract for sale of goods. On the other hand, the contract is for use of skill and labour by the photographer to bring about the desired result. Learned Judges held that the job of a photographer is a contract for work and labour and it is not a contract of sale.</p><p>10. Reliance was also placed on a judgment of this High Court in the case of Photo Emporium v. Addl. District Magistrate reported in 77 STC 199 in which this High Court followed the ratio of the judgment of the Supreme Court in the case of B.C. Kame. In that case, the stand of the Revenue was disapproved by the Orissa High Court.</p><p>11. Similar view was taken in 110 STC 145 in the case of Foto Colour Labs Pvt. Ltd. v. Commercial Taxes Officer where the Tribunal held that the transfer of paper in the photograph is purely incidental and payment is only taken to give positive prints and not to get the photo papers. Therefore, the contract in between the petitioner and his client is not a contract of sale, and neither directly or indirectly works contract is involved in the supply of photo papers. Similar view was taken by the West Bengal Taxation Tribunal in the case of Studio Kamalalaya v. Commercial Tax Officer reported in 89 STC 307.</p><p>12. In the case of Bavens v. Onion of India report in 97 STC 161, learned Judges held that when a photographer takes a photograph of his customer, he develops the negative and supplies positive prints in the desired size to the customer. In doing so the photographer uses his own camera and his own film. The negative belongs to the photographer and not to the customer. No basic goods are provided by the customer which are subjected to processing by the photographer so as to make the contract a works contract. There is no accretion to goods or property or the nucleus of a property which belongs to the customer. It is the skill of the photographer which is most important to get the desired result.</p><p>13. Hon'ble Karnataka High Court followed the same principle in the case of Keshoram Surlndranath Photo-mag Pvt. Ltd. v. Assistant Commissioner of Commercial Taxes reported in 121 STC 175. In that judgment, learned Judges of the Karnataka High Court relied on the judgment of the Supreme Court in B.C. Kame's case and came to the conclusion that in the job of the photographer in supplying positive prints to his customer, no works contract is involved and photographs are not marketable or saleable commodity and as such no tax can be levied on it.</p><p>14. Against the said judgment of the Karnataka High Court, the State of Karnataka High Court filed a S.L.P. before the Hon'ble Supreme Court bearing SLP Nos. 6136-6163 of 2000 and the Hon'ble Supreme Court dismissed the SLP on 20th April, 2000.</p><p>15. In the case of Rainbow Colour Lab v. State of M.P. learned Judges of the Hon'ble Supreme Court reiterated its judgment in B.C. Kame's case and came to the following conclusion:</p><p>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.</p><p>Hon'ble Supreme Court in Bharat Sanchar Nigam Ltd. v. Union of India reported in 145 STC 91 again reiterated the principle in B.C. Kame's case and held that the work done by the photographer is only in the nature of a service contract not involving any sale of goods and held that the stand taken by the State cannot be sustained.</p><p>16. Learned Counsel for the petitioner submitted that the photographs taken by the petitioner are not goods which can be sold and is not a marketable commodity like any other goods. When the copies of photographs are made out, they have no utility or value to any other person than the customer. It is already admitted that the papers utilized for photographs are tax paid goods. Therefore, it is contended by the learned Counsel for the petitioner that the work of photography does not come within the purview of works contract as defined in Section 2(jj) of the Orissa Sales Tax Act.</p><p>17. Learned Counsel for the Revenue in this case virtually did not contest the submission made by the learned Counsel for the petitioner and in support of his contention, learned Counsel for the Revenue relied on a decision of the Supreme Court in the case of Imagic Creative Pvt. Ltd. v. Commissioner of Commercial Taxes and Ors. reported in (2008) 10 RC 236. In that judgment, learned Judges held that since the contract in question is a service contract, it is difficult to hold that in a case of this nature, sales tax would be payable on the value of the entire contract irrespective of the element of service provided.</p><p>For the reasons discussed above, we answer the first question in the negative and the second question, in the affirmative. We thus answer both the questions in favour of the assessee and against the Revenue.</p><p>The three revision applications are thus disposed of.</p><p>No costs.</p><p>B.N. Mahapatra, J.</p><p>18. I agree.<p></p><p>',
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	(int) 0 => '<p>A.K. Ganguly, C.J.',
	(int) 1 => '<p>1. Initially three S.J.Cs. being S.J.C. Nos. 10 of 1997, 8 of 1997 and 9 of 1997 were filed and subsequently renumbered as STREV Nos. 212, 214 and 216 of 2007 respectively. In view of the common questions of facts and law, all the three Revision Applications are heard and disposed of together.',
	(int) 2 => '<p>2. The following questions of law arising out of the order passed by the Orissa Sales Tax Tribunal on 8.12.1993 in Second Appeal Nos. 3345 to 3350 of 1991-92 have been referred to this Hon'ble High Court in terms of the order of this Hon'ble Court dated 24.2.1997. The questions are:',
	(int) 3 => '<p>(i) Whether on the facts and in the circumstances of the case, the Tribunal is right to held that tax is exigible for photographs as execution of works contract ?',
	(int) 4 => '<p>(ii) Whether on the facts and in the circumstances of the case, the conclusion of the Tribunal is perverse due to non-consideration and mis-consideration of facts and law and, therefore, it is liable to be set aside for re-hearing ?',
	(int) 5 => '<p>3. The materials facts out of which those questions arise are that the petitioner carries on the business of processing and developing photography. In the usual course of business, the petitioner takes photographs of persons or of family and then develops the negative by employing his skill and labour and then supplies the photographs to the clients. These photographs which are prepared by the petitioner are not commercial items because they are neither purchased nor sold. However, to develop these photographs employment of skill and labour is essential. It may be mentioned that petitioner does not carry on any sale of photographs of national leaders, God and Goddess.',
	(int) 6 => '<p>4. After the passing of 46th amendment of the Constitution of India and consequent amendments thereto in Orissa Sales Tax Act (OST Act), the Sales Tax Officer, Bhubaneswar-II Circle, Bhubaneswar sent notices to assess the petitioner as an unregistered dealer under Section 12 (5) of the OST Act, inter alia, contending that the petitioner's activities can be called 'works contract'. Pursuant to said notice, the petitioner gave its reply and appeared before the Sales Tax Officer and produced the books of account and documents including Receipts, Purchase Memos, Vouchers, Ledger and thereby denied its liability under the OST Act. The petitioner also submitted objection petitions on various dates i.e. 28.12.1985, 10.1.1986, 20.2.1986 and 29.2.1988 contending, inter alia, that the petitioner has no sales tax liability under OST Act and the notices, which were issued, are without jurisdiction.',
	(int) 7 => '<p>5. Ignoring the said objections of the petitioner, the Sales Tax Officer, Bhubaneswar-II Circle, Bhubaneswar assessed the petitioner as an unregistered dealer, inter alia, holding that the petitioner is liable to pay sales tax as petitioner has been alleged to carry activities of 'works contract'. Therefore, orders of assessment being dated 29.2.1988 for the years 1984-85 (9/84 to 3/85), 1985-86 and 1986- 87 under Section 12(5) of OST Act and under Rule 5 of the Orissa Additional Sales Tax Rules, 1975 were passed and a tax of Rs. 20,765.00 and penalty of Rs. 5,000.00 totalling to Rs. 25,765.00 was imposed on the petitioner. The petitioner then filed the First Appeal before the learned Assistant Commissioner of Sales Tax. The First Appellate Authority by an order dated 27.9.1991 confirmed the levy of tax under the OST Act, but reduced the penalty to Rs. 1250.00. Thereupon, the petitioner filed the Second Appeal before the Orissa Sales Tax Tribunal, Cuttack. The said Tribunal heard the Second Appeal and in course of hearing, the petitioner raised various contentions. Ultimately, the Tribunal upheld the levy of tax but deleted the penalty.',
	(int) 8 => '<p>6. Thereafter the petitioner came up with a reference application under Section 24(1) of the Orissa Sales Tax Act framing certain questions for being referred to the Hon'ble High Court. The said prayer of the petitioner was rejected by the Tribunal. Then the petitioner moved Hon'ble High Court under Section 24(2)(b) of the Orissa Sales Tax Act, 1947 whereupon the High Court directed the Tribunal to state to case and refer the questions under Section 24(3) of the OST Act for a decision of the High Court.',
	(int) 9 => '<p>7. Accordingly, the Tribunal stated the case and referred the aforesaid questions for a decision of the High Court.',
	(int) 10 => '<p>8. Learned Counsel for the petitioner before the High Court submitted that in the transaction in question, there is no contract of sale between the petitioner and the client. It is only a contract of service and the photographs, which the petitioner produced by supplying the same has no commercial value and are not marketable. So, there is no question of a works contract. It is the consistent stand of the petitioner that the present photographs which are produced by the petitioner have no utility or value to any other person than the customer. By developing such photographs, the petitioner only renders service to his customers. The customer pays for the service rendered by the petitioner. It is the contention of the petitioner that his activity is similar to that of consulting firm preparing plan and sketches pursuant to client's specification or professional giving opinion on papers. All those activities are done to serve the client. Therefore, this does not come within the purview of the definition of 'goods', 'sale', 'dealer' or 'works contract'. It is the petitioner's case that he purchased the goods, namely, papers on payment of sales tax. Further levy of tax on the personal service rendered to the client of the petitioner will amount to double taxation. It is also the contention of the petitioner that the paper which is used in the photography are incidental and insignificant.',
	(int) 11 => '<p>9. In support of its contention, learned Counsel for the petitioner has relied on several judgments. First reliance was place on the judgment of the Supreme Court in the case of Sales Tax Officer v. B.C. Kame reported in 39 STC 237(SC). At page 241 of the report, learned Judges of the Supreme Court held that a photographer takes the photograph and develops the negatives and does other photographic work and thereafter supplies the prints to his client. By doing so he cannot be said to enter into a contract for sale of goods. On the other hand, the contract is for use of skill and labour by the photographer to bring about the desired result. Learned Judges held that the job of a photographer is a contract for work and labour and it is not a contract of sale.',
	(int) 12 => '<p>10. Reliance was also placed on a judgment of this High Court in the case of Photo Emporium v. Addl. District Magistrate reported in 77 STC 199 in which this High Court followed the ratio of the judgment of the Supreme Court in the case of B.C. Kame. In that case, the stand of the Revenue was disapproved by the Orissa High Court.',
	(int) 13 => '<p>11. Similar view was taken in 110 STC 145 in the case of Foto Colour Labs Pvt. Ltd. v. Commercial Taxes Officer where the Tribunal held that the transfer of paper in the photograph is purely incidental and payment is only taken to give positive prints and not to get the photo papers. Therefore, the contract in between the petitioner and his client is not a contract of sale, and neither directly or indirectly works contract is involved in the supply of photo papers. Similar view was taken by the West Bengal Taxation Tribunal in the case of Studio Kamalalaya v. Commercial Tax Officer reported in 89 STC 307.',
	(int) 14 => '<p>12. In the case of Bavens v. Onion of India report in 97 STC 161, learned Judges held that when a photographer takes a photograph of his customer, he develops the negative and supplies positive prints in the desired size to the customer. In doing so the photographer uses his own camera and his own film. The negative belongs to the photographer and not to the customer. No basic goods are provided by the customer which are subjected to processing by the photographer so as to make the contract a works contract. There is no accretion to goods or property or the nucleus of a property which belongs to the customer. It is the skill of the photographer which is most important to get the desired result.',
	(int) 15 => '<p>13. Hon'ble Karnataka High Court followed the same principle in the case of Keshoram Surlndranath Photo-mag Pvt. Ltd. v. Assistant Commissioner of Commercial Taxes reported in 121 STC 175. In that judgment, learned Judges of the Karnataka High Court relied on the judgment of the Supreme Court in B.C. Kame's case and came to the conclusion that in the job of the photographer in supplying positive prints to his customer, no works contract is involved and photographs are not marketable or saleable commodity and as such no tax can be levied on it.',
	(int) 16 => '<p>14. Against the said judgment of the Karnataka High Court, the State of Karnataka High Court filed a S.L.P. before the Hon'ble Supreme Court bearing SLP Nos. 6136-6163 of 2000 and the Hon'ble Supreme Court dismissed the SLP on 20th April, 2000.',
	(int) 17 => '<p>15. In the case of Rainbow Colour Lab v. State of M.P. learned Judges of the Hon'ble Supreme Court reiterated its judgment in B.C. Kame's case and came to the following conclusion:',
	(int) 18 => '<p>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.',
	(int) 19 => '<p>Hon'ble Supreme Court in Bharat Sanchar Nigam Ltd. v. Union of India reported in 145 STC 91 again reiterated the principle in B.C. Kame's case and held that the work done by the photographer is only in the nature of a service contract not involving any sale of goods and held that the stand taken by the State cannot be sustained.',
	(int) 20 => '<p>16. Learned Counsel for the petitioner submitted that the photographs taken by the petitioner are not goods which can be sold and is not a marketable commodity like any other goods. When the copies of photographs are made out, they have no utility or value to any other person than the customer. It is already admitted that the papers utilized for photographs are tax paid goods. Therefore, it is contended by the learned Counsel for the petitioner that the work of photography does not come within the purview of works contract as defined in Section 2(jj) of the Orissa Sales Tax Act.',
	(int) 21 => '<p>17. Learned Counsel for the Revenue in this case virtually did not contest the submission made by the learned Counsel for the petitioner and in support of his contention, learned Counsel for the Revenue relied on a decision of the Supreme Court in the case of Imagic Creative Pvt. Ltd. v. Commissioner of Commercial Taxes and Ors. reported in (2008) 10 RC 236. In that judgment, learned Judges held that since the contract in question is a service contract, it is difficult to hold that in a case of this nature, sales tax would be payable on the value of the entire contract irrespective of the element of service provided.',
	(int) 22 => '<p>For the reasons discussed above, we answer the first question in the negative and the second question, in the affirmative. We thus answer both the questions in favour of the assessee and against the Revenue.',
	(int) 23 => '<p>The three revision applications are thus disposed of.',
	(int) 24 => '<p>No costs.',
	(int) 25 => '<p>B.N. Mahapatra, J.',
	(int) 26 => '<p>18. I agree.<p>',
	(int) 27 => '<p>'
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5. Ignoring the said objections of the petitioner, the Sales Tax Officer, Bhubaneswar-II Circle, Bhubaneswar assessed the petitioner as an unregistered dealer, inter alia, holding that the petitioner is liable to pay sales tax as petitioner has been alleged to carry activities of 'works contract'. Therefore, orders of assessment being dated 29.2.1988 for the years 1984-85 (9/84 to 3/85), 1985-86 and 1986- 87 under Section 12(5) of OST Act and under Rule 5 of the Orissa Additional Sales Tax Rules, 1975 were passed and a tax of Rs. 20,765.00 and penalty of Rs. 5,000.00 totalling to Rs. 25,765.00 was imposed on the petitioner. The petitioner then filed the First Appeal before the learned Assistant Commissioner of Sales Tax. The First Appellate Authority by an order dated 27.9.1991 confirmed the levy of tax under the OST Act, but reduced the penalty to Rs. 1250.00. Thereupon, the petitioner filed the Second Appeal before the Orissa Sales Tax Tribunal, Cuttack. The said Tribunal heard the Second Appeal and in course of hearing, the petitioner raised various contentions. Ultimately, the Tribunal upheld the levy of tax but deleted the penalty.

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	'title_for_layout' => 'Studio Sujata Vs Commissioner of Sales Tax - Citation 531271 - Court Judgment | ',
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		'Judgement' => array(
			'id' => '531271',
			'acts' => '',
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			'appellant' => 'Studio Sujata',
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			'casename' => 'Studio Sujata Vs. Commissioner of Sales Tax',
			'casenote' => 'Sales Tax - Assessment - Contract of Sale - Section 12 (5) of Orissa Sales Tax 1947 - Petitioner carries on business of processing and developing photography - Revenue assessed petitioner under Section 12(5) of Act on ground that activities of petitioner can be called works contract - Petitioner approached to Assistant of Sales Tax on ground that there is no contract of sale between the petitioner and the client, it is only service - Dismissed and affirmed by Tribunal - Hence present petition - Whether Tribunal is right to held that tax is exigible for photographs as execution of works contract or not? - Held, as per precedent laid down by Supreme Court in case of Sales Tax Officer v. B.C. Kame that photographer takes photograph and develops negatives and does other photographic work and thereafter supplies prints to his client - By doing so he cannot be said to enter into contract for sale of goods - Therefore, job of photographer is contract for work and labour and it is not contract of sale - Revenue committed mistake in assessing petitioner under Section 12(5) of Act on basis of contract of sale - Petition disposed of accordingly  - STATE FINANCIAL CORPORATIONS ACT, 1951 [63/1951]. Section 29; [P.K. Tripathy, A.K. Parichha & N.Prusty, JJ] Discharge of loan  Orissa Forest Act (14 of 1972), Section 56  Confiscation of vehicle - Held, The Authorities under Section 56 of the Orissa Forest Act, 1972 are not obliged to release the vehicle from the confiscation proceeding or to pay the sale proceeds of the vehicle after the order of confiscation in favour of Orissa State Financial Corporation when such vehicles were purchased on being financed by the Orissa State Financial Corporation and the loan had not been liquidated by the date of the seizure/confiscation of the vehicle. Concept of first charge or second charge has no applicability when the vehicle is not otherwise disposed of to determine the liabilities of the loanee. On the other hand the vehicle having been found indulged in forest offences was made subject matter of a confiscation proceedings, and therefore, the procedure followed for confiscation of the vehicle and for its sale is punitive in nature and not with a view to give benefit to anybody including the Department which initiated the confiscation proceeding. Apart from that, the claim of the Orissa State Financial Corporation as against its loanee (who had taken the vehicle on hire- purchase agreement) brings the loanee and the sureties within the default clause under the State Financial Corporation Act, 1951 or the heirs and successors of such persons. Procedure is provided in the Act, 1951 and the Rules thereof about the manner in which such loan is to be recovered, and in that context only the vehicle under the hire-purchase agreement is placed as the first charge. If such property is not available for any reason, then the loan is not automatically waived or the loanee and his sureties are not automatically redeemed of the liabilities to repay. The Financial Corporation is concerned with repayment of loan either from the property or persons offered as surety. Thus, a vehicle, which is subject matter of confiscation proceeding under the Act, 1872, being not available to the Orissa State Financial Corporation for adjustment of the unpaid loan, that does not at all bring out an anomalous situation so as to defeat the right of the Orissa State Financial Corporation. Agreement between the Orissa State Financial Corporation and the loanee is a pure and simple contract governed by the provisions of the Contract Act, 1872 read with the provisions in the Act, 1951 and its Rules. On the other hand, a confiscation proceeding under the Act, 1972 is punitive in nature for commission of a forest offence. Thus, by virtue of the provision in Section 56 read with Section 64 (2) of the Act, 1972, the action taken for confiscation of the vehicle cannot be extended to grant protection of the loan advanced by Orissa State Financial Corporation. By doing that it amounts to grant premium to the pick-pockets in as much as, by making payment of the confiscation amount in favour of the Orissa State Financial Corporation the loan burden of the accused of the forest offence is reduced to the extent of the sale proceeds of the vehicle. In other words, on payment of the sale proceeds of the confiscation proceeding to the Orissa State Financial Corporation towards discharge of the loan account of the accused of a forest offence, it would lead to a system to reward him by repayment of his loan. Then it does not become a penalty nor the action become punitive, but it remains as a reward to the accused of forest offence. Such a concept is totally not conceivable from any provision in the Act, 1972 or the Act, 1951. [AIR 2002 Orissa 130 Overruled]. -- STATE FINANCIAL CORPORATIONS ACT, 1951. 
Section 29; Discharge of loan  Orissa Forest Act (14 of 1972), Section 56  Confiscation of vehicle - Held, The Authorities under Section 56 of the Orissa Forest Act, 1972 are not obliged to release the vehicle from the confiscation proceeding or to pay the sale proceeds of the vehicle after the order of confiscation in favour of Orissa State Financial Corporation when such vehicles were purchased on being financed by the Orissa State Financial Corporation and the loan had not been liquidated by the date of the seizure/confiscation of the vehicle. Concept of first charge or second charge has no applicability when the vehicle is not otherwise disposed of to determine the liabilities of the loanee. On the other hand the vehicle having been found indulged in forest offences was made subject matter of a confiscation proceedings, and therefore, the procedure followed for confiscation of the vehicle and for its sale is punitive in nature and not with a view to give benefit to anybody including the Department which initiated the confiscation proceeding. Apart from that, the claim of the Orissa State Financial Corporation as against its loanee (who had taken the vehicle on hire- purchase agreement) brings the loanee and the sureties within the default clause under the State Financial Corporation Act, 1951 or the heirs and successors of such persons. Procedure is provided in the Act, 1951 and the Rules thereof about the manner in which such loan is to be recovered, and in that context only the vehicle under the hire-purchase agreement is placed as the first charge. If such property is not available for any reason, then the loan is not automatically waived or the loanee and his sureties are not automatically redeemed of the liabilities to repay. The Financial Corporation is concerned with repayment of loan either from the property or persons offered as surety. Thus, a vehicle, which is subject matter of confiscation proceeding under the Act, 1872, being not available to the Orissa State Financial Corporation for adjustment of the unpaid loan, that does not at all bring out an anomalous situation so as to defeat the right of the Orissa State Financial Corporation. Agreement between the Orissa State Financial Corporation and the loanee is a pure and simple contract governed by the provisions of the Contract Act, 1872 read with the provisions in the Act, 1951 and its Rules. On the other hand, a confiscation proceeding under the Act, 1972 is punitive in nature for commission of a forest offence. Thus, by virtue of the provision in Section 56 read with Section 64 (2) of the Act, 1972, the action taken for confiscation of the vehicle cannot be extended to grant protection of the loan advanced by Orissa State Financial Corporation. By doing that it amounts to grant premium to the pick-pockets in as much as, by making payment of the confiscation amount in favour of the Orissa State Financial Corporation the loan burden of the accused of the forest offence is reduced to the extent of the sale proceeds of the vehicle. In other words, on payment of the sale proceeds of the confiscation proceeding to the Orissa State Financial Corporation towards discharge of the loan account of the accused of a forest offence, it would lead to a system to reward him by repayment of his loan. Then it does not become a penalty nor the action become punitive, but it remains as a reward to the accused of forest offence. Such a concept is totally not conceivable from any provision in the Act, 1972 or the Act, 1951. [AIR 2002 Orissa 130 Overruled].  -  In that case, the stand of the Revenue was disapproved by the Orissa High Court. 16. Learned Counsel for the petitioner submitted that the photographs taken by the petitioner are not goods which can be sold and is not a marketable commodity like any other goods.',
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			'judge' => ' A.K. Ganguly, C.J. and; B.N. Mahapatra, J.',
			'judgement' => '<p style="text-align: justify;">A.K. Ganguly, C.J.</p><p style="text-align: justify;">1. Initially three S.J.Cs. being S.J.C. Nos. 10 of 1997, 8 of 1997 and 9 of 1997 were filed and subsequently renumbered as STREV Nos. 212, 214 and 216 of 2007 respectively. In view of the common questions of facts and law, all the three Revision Applications are heard and disposed of together.</p><p style="text-align: justify;">2. The following questions of law arising out of the order passed by the Orissa Sales Tax Tribunal on 8.12.1993 in Second Appeal Nos. 3345 to 3350 of 1991-92 have been referred to this Hon'ble High Court in terms of the order of this Hon'ble Court dated 24.2.1997. The questions are:</p><p style="text-align: justify;">(i) Whether on the facts and in the circumstances of the case, the Tribunal is right to held that tax is exigible for photographs as execution of works contract ?</p><p style="text-align: justify;">(ii) Whether on the facts and in the circumstances of the case, the conclusion of the Tribunal is perverse due to non-consideration and mis-consideration of facts and law and, therefore, it is liable to be set aside for re-hearing ?</p><p style="text-align: justify;">3. The materials facts out of which those questions arise are that the petitioner carries on the business of processing and developing photography. In the usual course of business, the petitioner takes photographs of persons or of family and then develops the negative by employing his skill and labour and then supplies the photographs to the clients. These photographs which are prepared by the petitioner are not commercial items because they are neither purchased nor sold. However, to develop these photographs employment of skill and labour is essential. It may be mentioned that petitioner does not carry on any sale of photographs of national leaders, God and Goddess.</p><p style="text-align: justify;">4. After the passing of 46th amendment of the Constitution of India and consequent amendments thereto in Orissa Sales Tax Act (OST Act), the Sales Tax Officer, Bhubaneswar-II Circle, Bhubaneswar sent notices to assess the petitioner as an unregistered dealer under Section 12 (5) of the OST Act, inter alia, contending that the petitioner's activities can be called 'works contract'. Pursuant to said notice, the petitioner gave its reply and appeared before the Sales Tax Officer and produced the books of account and documents including Receipts, Purchase Memos, Vouchers, Ledger and thereby denied its liability under the OST Act. The petitioner also submitted objection petitions on various dates i.e. 28.12.1985, 10.1.1986, 20.2.1986 and 29.2.1988 contending, inter alia, that the petitioner has no sales tax liability under OST Act and the notices, which were issued, are without jurisdiction.</p><p style="text-align: justify;">5. Ignoring the said objections of the petitioner, the Sales Tax Officer, Bhubaneswar-II Circle, Bhubaneswar assessed the petitioner as an unregistered dealer, inter alia, holding that the petitioner is liable to pay sales tax as petitioner has been alleged to carry activities of 'works contract'. Therefore, orders of assessment being dated 29.2.1988 for the years 1984-85 (9/84 to 3/85), 1985-86 and 1986- 87 under Section 12(5) of OST Act and under Rule 5 of the Orissa Additional Sales Tax Rules, 1975 were passed and a tax of Rs. 20,765.00 and penalty of Rs. 5,000.00 totalling to Rs. 25,765.00 was imposed on the petitioner. The petitioner then filed the First Appeal before the learned Assistant Commissioner of Sales Tax. The First Appellate Authority by an order dated 27.9.1991 confirmed the levy of tax under the OST Act, but reduced the penalty to Rs. 1250.00. Thereupon, the petitioner filed the Second Appeal before the Orissa Sales Tax Tribunal, Cuttack. The said Tribunal heard the Second Appeal and in course of hearing, the petitioner raised various contentions. Ultimately, the Tribunal upheld the levy of tax but deleted the penalty.</p><p style="text-align: justify;">6. Thereafter the petitioner came up with a reference application under Section 24(1) of the Orissa Sales Tax Act framing certain questions for being referred to the Hon'ble High Court. The said prayer of the petitioner was rejected by the Tribunal. Then the petitioner moved Hon'ble High Court under Section 24(2)(b) of the Orissa Sales Tax Act, 1947 whereupon the High Court directed the Tribunal to state to case and refer the questions under Section 24(3) of the OST Act for a decision of the High Court.</p><p style="text-align: justify;">7. Accordingly, the Tribunal stated the case and referred the aforesaid questions for a decision of the High Court.</p><p style="text-align: justify;">8. Learned Counsel for the petitioner before the High Court submitted that in the transaction in question, there is no contract of sale between the petitioner and the client. It is only a contract of service and the photographs, which the petitioner produced by supplying the same has no commercial value and are not marketable. So, there is no question of a works contract. It is the consistent stand of the petitioner that the present photographs which are produced by the petitioner have no utility or value to any other person than the customer. By developing such photographs, the petitioner only renders service to his customers. The customer pays for the service rendered by the petitioner. It is the contention of the petitioner that his activity is similar to that of consulting firm preparing plan and sketches pursuant to client's specification or professional giving opinion on papers. All those activities are done to serve the client. Therefore, this does not come within the purview of the definition of 'goods', 'sale', 'dealer' or 'works contract'. It is the petitioner's case that he purchased the goods, namely, papers on payment of sales tax. Further levy of tax on the personal service rendered to the client of the petitioner will amount to double taxation. It is also the contention of the petitioner that the paper which is used in the photography are incidental and insignificant.</p><p style="text-align: justify;">9. In support of its contention, learned Counsel for the petitioner has relied on several judgments. First reliance was place on the judgment of the Supreme Court in the case of Sales Tax Officer v. B.C. Kame reported in 39 STC 237(SC). At page 241 of the report, learned Judges of the Supreme Court held that a photographer takes the photograph and develops the negatives and does other photographic work and thereafter supplies the prints to his client. By doing so he cannot be said to enter into a contract for sale of goods. On the other hand, the contract is for use of skill and labour by the photographer to bring about the desired result. Learned Judges held that the job of a photographer is a contract for work and labour and it is not a contract of sale.</p><p style="text-align: justify;">10. Reliance was also placed on a judgment of this High Court in the case of Photo Emporium v. Addl. District Magistrate reported in 77 STC 199 in which this High Court followed the ratio of the judgment of the Supreme Court in the case of B.C. Kame. In that case, the stand of the Revenue was disapproved by the Orissa High Court.</p><p style="text-align: justify;">11. Similar view was taken in 110 STC 145 in the case of Foto Colour Labs Pvt. Ltd. v. Commercial Taxes Officer where the Tribunal held that the transfer of paper in the photograph is purely incidental and payment is only taken to give positive prints and not to get the photo papers. Therefore, the contract in between the petitioner and his client is not a contract of sale, and neither directly or indirectly works contract is involved in the supply of photo papers. Similar view was taken by the West Bengal Taxation Tribunal in the case of Studio Kamalalaya v. Commercial Tax Officer reported in 89 STC 307.</p><p style="text-align: justify;">12. In the case of Bavens v. Onion of India report in 97 STC 161, learned Judges held that when a photographer takes a photograph of his customer, he develops the negative and supplies positive prints in the desired size to the customer. In doing so the photographer uses his own camera and his own film. The negative belongs to the photographer and not to the customer. No basic goods are provided by the customer which are subjected to processing by the photographer so as to make the contract a works contract. There is no accretion to goods or property or the nucleus of a property which belongs to the customer. It is the skill of the photographer which is most important to get the desired result.</p><p style="text-align: justify;">13. Hon'ble Karnataka High Court followed the same principle in the case of Keshoram Surlndranath Photo-mag Pvt. Ltd. v. Assistant Commissioner of Commercial Taxes reported in 121 STC 175. In that judgment, learned Judges of the Karnataka High Court relied on the judgment of the Supreme Court in B.C. Kame's case and came to the conclusion that in the job of the photographer in supplying positive prints to his customer, no works contract is involved and photographs are not marketable or saleable commodity and as such no tax can be levied on it.</p><p style="text-align: justify;">14. Against the said judgment of the Karnataka High Court, the State of Karnataka High Court filed a S.L.P. before the Hon'ble Supreme Court bearing SLP Nos. 6136-6163 of 2000 and the Hon'ble Supreme Court dismissed the SLP on 20th April, 2000.</p><p style="text-align: justify;">15. In the case of Rainbow Colour Lab v. State of M.P. learned Judges of the Hon'ble Supreme Court reiterated its judgment in B.C. Kame's case and came to the following conclusion:</p><p style="text-align: justify;">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.</p><p style="text-align: justify;">Hon'ble Supreme Court in Bharat Sanchar Nigam Ltd. v. Union of India reported in 145 STC 91 again reiterated the principle in B.C. Kame's case and held that the work done by the photographer is only in the nature of a service contract not involving any sale of goods and held that the stand taken by the State cannot be sustained.</p><p style="text-align: justify;">16. Learned Counsel for the petitioner submitted that the photographs taken by the petitioner are not goods which can be sold and is not a marketable commodity like any other goods. When the copies of photographs are made out, they have no utility or value to any other person than the customer. It is already admitted that the papers utilized for photographs are tax paid goods. Therefore, it is contended by the learned Counsel for the petitioner that the work of photography does not come within the purview of works contract as defined in Section 2(jj) of the Orissa Sales Tax Act.</p><p style="text-align: justify;">17. Learned Counsel for the Revenue in this case virtually did not contest the submission made by the learned Counsel for the petitioner and in support of his contention, learned Counsel for the Revenue relied on a decision of the Supreme Court in the case of Imagic Creative Pvt. Ltd. v. Commissioner of Commercial Taxes and Ors. reported in (2008) 10 RC 236. In that judgment, learned Judges held that since the contract in question is a service contract, it is difficult to hold that in a case of this nature, sales tax would be payable on the value of the entire contract irrespective of the element of service provided.</p><p style="text-align: justify;">For the reasons discussed above, we answer the first question in the negative and the second question, in the affirmative. We thus answer both the questions in favour of the assessee and against the Revenue.</p><p style="text-align: justify;">The three revision applications are thus disposed of.</p><p style="text-align: justify;">No costs.</p><p style="text-align: justify;">B.N. Mahapatra, J.</p><p style="text-align: justify;">18. I agree.<p style="text-align: justify;"></p><p style="text-align: justify;">',
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$title_for_layout = 'Studio Sujata Vs Commissioner of Sales Tax - Citation 531271 - Court Judgment | '
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	'Judgement' => array(
		'id' => '531271',
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		'appellant' => 'Studio Sujata',
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		'casename' => 'Studio Sujata Vs. Commissioner of Sales Tax',
		'casenote' => 'Sales Tax - Assessment - Contract of Sale - Section 12 (5) of Orissa Sales Tax 1947 - Petitioner carries on business of processing and developing photography - Revenue assessed petitioner under Section 12(5) of Act on ground that activities of petitioner can be called works contract - Petitioner approached to Assistant of Sales Tax on ground that there is no contract of sale between the petitioner and the client, it is only service - Dismissed and affirmed by Tribunal - Hence present petition - Whether Tribunal is right to held that tax is exigible for photographs as execution of works contract or not? - Held, as per precedent laid down by Supreme Court in case of Sales Tax Officer v. B.C. Kame that photographer takes photograph and develops negatives and does other photographic work and thereafter supplies prints to his client - By doing so he cannot be said to enter into contract for sale of goods - Therefore, job of photographer is contract for work and labour and it is not contract of sale - Revenue committed mistake in assessing petitioner under Section 12(5) of Act on basis of contract of sale - Petition disposed of accordingly  - STATE FINANCIAL CORPORATIONS ACT, 1951 [63/1951]. Section 29; [P.K. Tripathy, A.K. Parichha & N.Prusty, JJ] Discharge of loan  Orissa Forest Act (14 of 1972), Section 56  Confiscation of vehicle - Held, The Authorities under Section 56 of the Orissa Forest Act, 1972 are not obliged to release the vehicle from the confiscation proceeding or to pay the sale proceeds of the vehicle after the order of confiscation in favour of Orissa State Financial Corporation when such vehicles were purchased on being financed by the Orissa State Financial Corporation and the loan had not been liquidated by the date of the seizure/confiscation of the vehicle. Concept of first charge or second charge has no applicability when the vehicle is not otherwise disposed of to determine the liabilities of the loanee. On the other hand the vehicle having been found indulged in forest offences was made subject matter of a confiscation proceedings, and therefore, the procedure followed for confiscation of the vehicle and for its sale is punitive in nature and not with a view to give benefit to anybody including the Department which initiated the confiscation proceeding. Apart from that, the claim of the Orissa State Financial Corporation as against its loanee (who had taken the vehicle on hire- purchase agreement) brings the loanee and the sureties within the default clause under the State Financial Corporation Act, 1951 or the heirs and successors of such persons. Procedure is provided in the Act, 1951 and the Rules thereof about the manner in which such loan is to be recovered, and in that context only the vehicle under the hire-purchase agreement is placed as the first charge. If such property is not available for any reason, then the loan is not automatically waived or the loanee and his sureties are not automatically redeemed of the liabilities to repay. The Financial Corporation is concerned with repayment of loan either from the property or persons offered as surety. Thus, a vehicle, which is subject matter of confiscation proceeding under the Act, 1872, being not available to the Orissa State Financial Corporation for adjustment of the unpaid loan, that does not at all bring out an anomalous situation so as to defeat the right of the Orissa State Financial Corporation. Agreement between the Orissa State Financial Corporation and the loanee is a pure and simple contract governed by the provisions of the Contract Act, 1872 read with the provisions in the Act, 1951 and its Rules. On the other hand, a confiscation proceeding under the Act, 1972 is punitive in nature for commission of a forest offence. Thus, by virtue of the provision in Section 56 read with Section 64 (2) of the Act, 1972, the action taken for confiscation of the vehicle cannot be extended to grant protection of the loan advanced by Orissa State Financial Corporation. By doing that it amounts to grant premium to the pick-pockets in as much as, by making payment of the confiscation amount in favour of the Orissa State Financial Corporation the loan burden of the accused of the forest offence is reduced to the extent of the sale proceeds of the vehicle. In other words, on payment of the sale proceeds of the confiscation proceeding to the Orissa State Financial Corporation towards discharge of the loan account of the accused of a forest offence, it would lead to a system to reward him by repayment of his loan. Then it does not become a penalty nor the action become punitive, but it remains as a reward to the accused of forest offence. Such a concept is totally not conceivable from any provision in the Act, 1972 or the Act, 1951. [AIR 2002 Orissa 130 Overruled]. -- STATE FINANCIAL CORPORATIONS ACT, 1951. 
Section 29; Discharge of loan  Orissa Forest Act (14 of 1972), Section 56  Confiscation of vehicle - Held, The Authorities under Section 56 of the Orissa Forest Act, 1972 are not obliged to release the vehicle from the confiscation proceeding or to pay the sale proceeds of the vehicle after the order of confiscation in favour of Orissa State Financial Corporation when such vehicles were purchased on being financed by the Orissa State Financial Corporation and the loan had not been liquidated by the date of the seizure/confiscation of the vehicle. Concept of first charge or second charge has no applicability when the vehicle is not otherwise disposed of to determine the liabilities of the loanee. On the other hand the vehicle having been found indulged in forest offences was made subject matter of a confiscation proceedings, and therefore, the procedure followed for confiscation of the vehicle and for its sale is punitive in nature and not with a view to give benefit to anybody including the Department which initiated the confiscation proceeding. Apart from that, the claim of the Orissa State Financial Corporation as against its loanee (who had taken the vehicle on hire- purchase agreement) brings the loanee and the sureties within the default clause under the State Financial Corporation Act, 1951 or the heirs and successors of such persons. Procedure is provided in the Act, 1951 and the Rules thereof about the manner in which such loan is to be recovered, and in that context only the vehicle under the hire-purchase agreement is placed as the first charge. If such property is not available for any reason, then the loan is not automatically waived or the loanee and his sureties are not automatically redeemed of the liabilities to repay. The Financial Corporation is concerned with repayment of loan either from the property or persons offered as surety. Thus, a vehicle, which is subject matter of confiscation proceeding under the Act, 1872, being not available to the Orissa State Financial Corporation for adjustment of the unpaid loan, that does not at all bring out an anomalous situation so as to defeat the right of the Orissa State Financial Corporation. Agreement between the Orissa State Financial Corporation and the loanee is a pure and simple contract governed by the provisions of the Contract Act, 1872 read with the provisions in the Act, 1951 and its Rules. On the other hand, a confiscation proceeding under the Act, 1972 is punitive in nature for commission of a forest offence. Thus, by virtue of the provision in Section 56 read with Section 64 (2) of the Act, 1972, the action taken for confiscation of the vehicle cannot be extended to grant protection of the loan advanced by Orissa State Financial Corporation. By doing that it amounts to grant premium to the pick-pockets in as much as, by making payment of the confiscation amount in favour of the Orissa State Financial Corporation the loan burden of the accused of the forest offence is reduced to the extent of the sale proceeds of the vehicle. In other words, on payment of the sale proceeds of the confiscation proceeding to the Orissa State Financial Corporation towards discharge of the loan account of the accused of a forest offence, it would lead to a system to reward him by repayment of his loan. Then it does not become a penalty nor the action become punitive, but it remains as a reward to the accused of forest offence. Such a concept is totally not conceivable from any provision in the Act, 1972 or the Act, 1951. [AIR 2002 Orissa 130 Overruled].  -  In that case, the stand of the Revenue was disapproved by the Orissa High Court. 16. Learned Counsel for the petitioner submitted that the photographs taken by the petitioner are not goods which can be sold and is not a marketable commodity like any other goods.',
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		'casesref' => 'Imagic Creative Pvt. Ltd. v. Commissioner of Commercial Taxes and Ors.;',
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		'decidedon' => '2008-04-02',
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		'judge' => ' A.K. Ganguly, C.J. and; B.N. Mahapatra, J.',
		'judgement' => '<p>A.K. Ganguly, C.J.</p><p>1. Initially three S.J.Cs. being S.J.C. Nos. 10 of 1997, 8 of 1997 and 9 of 1997 were filed and subsequently renumbered as STREV Nos. 212, 214 and 216 of 2007 respectively. In view of the common questions of facts and law, all the three Revision Applications are heard and disposed of together.</p><p>2. The following questions of law arising out of the order passed by the Orissa Sales Tax Tribunal on 8.12.1993 in Second Appeal Nos. 3345 to 3350 of 1991-92 have been referred to this Hon'ble High Court in terms of the order of this Hon'ble Court dated 24.2.1997. The questions are:</p><p>(i) Whether on the facts and in the circumstances of the case, the Tribunal is right to held that tax is exigible for photographs as execution of works contract ?</p><p>(ii) Whether on the facts and in the circumstances of the case, the conclusion of the Tribunal is perverse due to non-consideration and mis-consideration of facts and law and, therefore, it is liable to be set aside for re-hearing ?</p><p>3. The materials facts out of which those questions arise are that the petitioner carries on the business of processing and developing photography. In the usual course of business, the petitioner takes photographs of persons or of family and then develops the negative by employing his skill and labour and then supplies the photographs to the clients. These photographs which are prepared by the petitioner are not commercial items because they are neither purchased nor sold. However, to develop these photographs employment of skill and labour is essential. It may be mentioned that petitioner does not carry on any sale of photographs of national leaders, God and Goddess.</p><p>4. After the passing of 46th amendment of the Constitution of India and consequent amendments thereto in Orissa Sales Tax Act (OST Act), the Sales Tax Officer, Bhubaneswar-II Circle, Bhubaneswar sent notices to assess the petitioner as an unregistered dealer under Section 12 (5) of the OST Act, inter alia, contending that the petitioner's activities can be called 'works contract'. Pursuant to said notice, the petitioner gave its reply and appeared before the Sales Tax Officer and produced the books of account and documents including Receipts, Purchase Memos, Vouchers, Ledger and thereby denied its liability under the OST Act. The petitioner also submitted objection petitions on various dates i.e. 28.12.1985, 10.1.1986, 20.2.1986 and 29.2.1988 contending, inter alia, that the petitioner has no sales tax liability under OST Act and the notices, which were issued, are without jurisdiction.</p><p>5. Ignoring the said objections of the petitioner, the Sales Tax Officer, Bhubaneswar-II Circle, Bhubaneswar assessed the petitioner as an unregistered dealer, inter alia, holding that the petitioner is liable to pay sales tax as petitioner has been alleged to carry activities of 'works contract'. Therefore, orders of assessment being dated 29.2.1988 for the years 1984-85 (9/84 to 3/85), 1985-86 and 1986- 87 under Section 12(5) of OST Act and under Rule 5 of the Orissa Additional Sales Tax Rules, 1975 were passed and a tax of Rs. 20,765.00 and penalty of Rs. 5,000.00 totalling to Rs. 25,765.00 was imposed on the petitioner. The petitioner then filed the First Appeal before the learned Assistant Commissioner of Sales Tax. The First Appellate Authority by an order dated 27.9.1991 confirmed the levy of tax under the OST Act, but reduced the penalty to Rs. 1250.00. Thereupon, the petitioner filed the Second Appeal before the Orissa Sales Tax Tribunal, Cuttack. The said Tribunal heard the Second Appeal and in course of hearing, the petitioner raised various contentions. Ultimately, the Tribunal upheld the levy of tax but deleted the penalty.</p><p>6. Thereafter the petitioner came up with a reference application under Section 24(1) of the Orissa Sales Tax Act framing certain questions for being referred to the Hon'ble High Court. The said prayer of the petitioner was rejected by the Tribunal. Then the petitioner moved Hon'ble High Court under Section 24(2)(b) of the Orissa Sales Tax Act, 1947 whereupon the High Court directed the Tribunal to state to case and refer the questions under Section 24(3) of the OST Act for a decision of the High Court.</p><p>7. Accordingly, the Tribunal stated the case and referred the aforesaid questions for a decision of the High Court.</p><p>8. Learned Counsel for the petitioner before the High Court submitted that in the transaction in question, there is no contract of sale between the petitioner and the client. It is only a contract of service and the photographs, which the petitioner produced by supplying the same has no commercial value and are not marketable. So, there is no question of a works contract. It is the consistent stand of the petitioner that the present photographs which are produced by the petitioner have no utility or value to any other person than the customer. By developing such photographs, the petitioner only renders service to his customers. The customer pays for the service rendered by the petitioner. It is the contention of the petitioner that his activity is similar to that of consulting firm preparing plan and sketches pursuant to client's specification or professional giving opinion on papers. All those activities are done to serve the client. Therefore, this does not come within the purview of the definition of 'goods', 'sale', 'dealer' or 'works contract'. It is the petitioner's case that he purchased the goods, namely, papers on payment of sales tax. Further levy of tax on the personal service rendered to the client of the petitioner will amount to double taxation. It is also the contention of the petitioner that the paper which is used in the photography are incidental and insignificant.</p><p>9. In support of its contention, learned Counsel for the petitioner has relied on several judgments. First reliance was place on the judgment of the Supreme Court in the case of Sales Tax Officer v. B.C. Kame reported in 39 STC 237(SC). At page 241 of the report, learned Judges of the Supreme Court held that a photographer takes the photograph and develops the negatives and does other photographic work and thereafter supplies the prints to his client. By doing so he cannot be said to enter into a contract for sale of goods. On the other hand, the contract is for use of skill and labour by the photographer to bring about the desired result. Learned Judges held that the job of a photographer is a contract for work and labour and it is not a contract of sale.</p><p>10. Reliance was also placed on a judgment of this High Court in the case of Photo Emporium v. Addl. District Magistrate reported in 77 STC 199 in which this High Court followed the ratio of the judgment of the Supreme Court in the case of B.C. Kame. In that case, the stand of the Revenue was disapproved by the Orissa High Court.</p><p>11. Similar view was taken in 110 STC 145 in the case of Foto Colour Labs Pvt. Ltd. v. Commercial Taxes Officer where the Tribunal held that the transfer of paper in the photograph is purely incidental and payment is only taken to give positive prints and not to get the photo papers. Therefore, the contract in between the petitioner and his client is not a contract of sale, and neither directly or indirectly works contract is involved in the supply of photo papers. Similar view was taken by the West Bengal Taxation Tribunal in the case of Studio Kamalalaya v. Commercial Tax Officer reported in 89 STC 307.</p><p>12. In the case of Bavens v. Onion of India report in 97 STC 161, learned Judges held that when a photographer takes a photograph of his customer, he develops the negative and supplies positive prints in the desired size to the customer. In doing so the photographer uses his own camera and his own film. The negative belongs to the photographer and not to the customer. No basic goods are provided by the customer which are subjected to processing by the photographer so as to make the contract a works contract. There is no accretion to goods or property or the nucleus of a property which belongs to the customer. It is the skill of the photographer which is most important to get the desired result.</p><p>13. Hon'ble Karnataka High Court followed the same principle in the case of Keshoram Surlndranath Photo-mag Pvt. Ltd. v. Assistant Commissioner of Commercial Taxes reported in 121 STC 175. In that judgment, learned Judges of the Karnataka High Court relied on the judgment of the Supreme Court in B.C. Kame's case and came to the conclusion that in the job of the photographer in supplying positive prints to his customer, no works contract is involved and photographs are not marketable or saleable commodity and as such no tax can be levied on it.</p><p>14. Against the said judgment of the Karnataka High Court, the State of Karnataka High Court filed a S.L.P. before the Hon'ble Supreme Court bearing SLP Nos. 6136-6163 of 2000 and the Hon'ble Supreme Court dismissed the SLP on 20th April, 2000.</p><p>15. In the case of Rainbow Colour Lab v. State of M.P. learned Judges of the Hon'ble Supreme Court reiterated its judgment in B.C. Kame's case and came to the following conclusion:</p><p>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.</p><p>Hon'ble Supreme Court in Bharat Sanchar Nigam Ltd. v. Union of India reported in 145 STC 91 again reiterated the principle in B.C. Kame's case and held that the work done by the photographer is only in the nature of a service contract not involving any sale of goods and held that the stand taken by the State cannot be sustained.</p><p>16. Learned Counsel for the petitioner submitted that the photographs taken by the petitioner are not goods which can be sold and is not a marketable commodity like any other goods. When the copies of photographs are made out, they have no utility or value to any other person than the customer. It is already admitted that the papers utilized for photographs are tax paid goods. Therefore, it is contended by the learned Counsel for the petitioner that the work of photography does not come within the purview of works contract as defined in Section 2(jj) of the Orissa Sales Tax Act.</p><p>17. Learned Counsel for the Revenue in this case virtually did not contest the submission made by the learned Counsel for the petitioner and in support of his contention, learned Counsel for the Revenue relied on a decision of the Supreme Court in the case of Imagic Creative Pvt. Ltd. v. Commissioner of Commercial Taxes and Ors. reported in (2008) 10 RC 236. In that judgment, learned Judges held that since the contract in question is a service contract, it is difficult to hold that in a case of this nature, sales tax would be payable on the value of the entire contract irrespective of the element of service provided.</p><p>For the reasons discussed above, we answer the first question in the negative and the second question, in the affirmative. We thus answer both the questions in favour of the assessee and against the Revenue.</p><p>The three revision applications are thus disposed of.</p><p>No costs.</p><p>B.N. Mahapatra, J.</p><p>18. I agree.<p></p><p>',
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	(int) 1 => '<p>1. Initially three S.J.Cs. being S.J.C. Nos. 10 of 1997, 8 of 1997 and 9 of 1997 were filed and subsequently renumbered as STREV Nos. 212, 214 and 216 of 2007 respectively. In view of the common questions of facts and law, all the three Revision Applications are heard and disposed of together.',
	(int) 2 => '<p>2. The following questions of law arising out of the order passed by the Orissa Sales Tax Tribunal on 8.12.1993 in Second Appeal Nos. 3345 to 3350 of 1991-92 have been referred to this Hon'ble High Court in terms of the order of this Hon'ble Court dated 24.2.1997. The questions are:',
	(int) 3 => '<p>(i) Whether on the facts and in the circumstances of the case, the Tribunal is right to held that tax is exigible for photographs as execution of works contract ?',
	(int) 4 => '<p>(ii) Whether on the facts and in the circumstances of the case, the conclusion of the Tribunal is perverse due to non-consideration and mis-consideration of facts and law and, therefore, it is liable to be set aside for re-hearing ?',
	(int) 5 => '<p>3. The materials facts out of which those questions arise are that the petitioner carries on the business of processing and developing photography. In the usual course of business, the petitioner takes photographs of persons or of family and then develops the negative by employing his skill and labour and then supplies the photographs to the clients. These photographs which are prepared by the petitioner are not commercial items because they are neither purchased nor sold. However, to develop these photographs employment of skill and labour is essential. It may be mentioned that petitioner does not carry on any sale of photographs of national leaders, God and Goddess.',
	(int) 6 => '<p>4. After the passing of 46th amendment of the Constitution of India and consequent amendments thereto in Orissa Sales Tax Act (OST Act), the Sales Tax Officer, Bhubaneswar-II Circle, Bhubaneswar sent notices to assess the petitioner as an unregistered dealer under Section 12 (5) of the OST Act, inter alia, contending that the petitioner's activities can be called 'works contract'. Pursuant to said notice, the petitioner gave its reply and appeared before the Sales Tax Officer and produced the books of account and documents including Receipts, Purchase Memos, Vouchers, Ledger and thereby denied its liability under the OST Act. The petitioner also submitted objection petitions on various dates i.e. 28.12.1985, 10.1.1986, 20.2.1986 and 29.2.1988 contending, inter alia, that the petitioner has no sales tax liability under OST Act and the notices, which were issued, are without jurisdiction.',
	(int) 7 => '<p>5. Ignoring the said objections of the petitioner, the Sales Tax Officer, Bhubaneswar-II Circle, Bhubaneswar assessed the petitioner as an unregistered dealer, inter alia, holding that the petitioner is liable to pay sales tax as petitioner has been alleged to carry activities of 'works contract'. Therefore, orders of assessment being dated 29.2.1988 for the years 1984-85 (9/84 to 3/85), 1985-86 and 1986- 87 under Section 12(5) of OST Act and under Rule 5 of the Orissa Additional Sales Tax Rules, 1975 were passed and a tax of Rs. 20,765.00 and penalty of Rs. 5,000.00 totalling to Rs. 25,765.00 was imposed on the petitioner. The petitioner then filed the First Appeal before the learned Assistant Commissioner of Sales Tax. The First Appellate Authority by an order dated 27.9.1991 confirmed the levy of tax under the OST Act, but reduced the penalty to Rs. 1250.00. Thereupon, the petitioner filed the Second Appeal before the Orissa Sales Tax Tribunal, Cuttack. The said Tribunal heard the Second Appeal and in course of hearing, the petitioner raised various contentions. Ultimately, the Tribunal upheld the levy of tax but deleted the penalty.',
	(int) 8 => '<p>6. Thereafter the petitioner came up with a reference application under Section 24(1) of the Orissa Sales Tax Act framing certain questions for being referred to the Hon'ble High Court. The said prayer of the petitioner was rejected by the Tribunal. Then the petitioner moved Hon'ble High Court under Section 24(2)(b) of the Orissa Sales Tax Act, 1947 whereupon the High Court directed the Tribunal to state to case and refer the questions under Section 24(3) of the OST Act for a decision of the High Court.',
	(int) 9 => '<p>7. Accordingly, the Tribunal stated the case and referred the aforesaid questions for a decision of the High Court.',
	(int) 10 => '<p>8. Learned Counsel for the petitioner before the High Court submitted that in the transaction in question, there is no contract of sale between the petitioner and the client. It is only a contract of service and the photographs, which the petitioner produced by supplying the same has no commercial value and are not marketable. So, there is no question of a works contract. It is the consistent stand of the petitioner that the present photographs which are produced by the petitioner have no utility or value to any other person than the customer. By developing such photographs, the petitioner only renders service to his customers. The customer pays for the service rendered by the petitioner. It is the contention of the petitioner that his activity is similar to that of consulting firm preparing plan and sketches pursuant to client's specification or professional giving opinion on papers. All those activities are done to serve the client. Therefore, this does not come within the purview of the definition of 'goods', 'sale', 'dealer' or 'works contract'. It is the petitioner's case that he purchased the goods, namely, papers on payment of sales tax. Further levy of tax on the personal service rendered to the client of the petitioner will amount to double taxation. It is also the contention of the petitioner that the paper which is used in the photography are incidental and insignificant.',
	(int) 11 => '<p>9. In support of its contention, learned Counsel for the petitioner has relied on several judgments. First reliance was place on the judgment of the Supreme Court in the case of Sales Tax Officer v. B.C. Kame reported in 39 STC 237(SC). At page 241 of the report, learned Judges of the Supreme Court held that a photographer takes the photograph and develops the negatives and does other photographic work and thereafter supplies the prints to his client. By doing so he cannot be said to enter into a contract for sale of goods. On the other hand, the contract is for use of skill and labour by the photographer to bring about the desired result. Learned Judges held that the job of a photographer is a contract for work and labour and it is not a contract of sale.',
	(int) 12 => '<p>10. Reliance was also placed on a judgment of this High Court in the case of Photo Emporium v. Addl. District Magistrate reported in 77 STC 199 in which this High Court followed the ratio of the judgment of the Supreme Court in the case of B.C. Kame. In that case, the stand of the Revenue was disapproved by the Orissa High Court.',
	(int) 13 => '<p>11. Similar view was taken in 110 STC 145 in the case of Foto Colour Labs Pvt. Ltd. v. Commercial Taxes Officer where the Tribunal held that the transfer of paper in the photograph is purely incidental and payment is only taken to give positive prints and not to get the photo papers. Therefore, the contract in between the petitioner and his client is not a contract of sale, and neither directly or indirectly works contract is involved in the supply of photo papers. Similar view was taken by the West Bengal Taxation Tribunal in the case of Studio Kamalalaya v. Commercial Tax Officer reported in 89 STC 307.',
	(int) 14 => '<p>12. In the case of Bavens v. Onion of India report in 97 STC 161, learned Judges held that when a photographer takes a photograph of his customer, he develops the negative and supplies positive prints in the desired size to the customer. In doing so the photographer uses his own camera and his own film. The negative belongs to the photographer and not to the customer. No basic goods are provided by the customer which are subjected to processing by the photographer so as to make the contract a works contract. There is no accretion to goods or property or the nucleus of a property which belongs to the customer. It is the skill of the photographer which is most important to get the desired result.',
	(int) 15 => '<p>13. Hon'ble Karnataka High Court followed the same principle in the case of Keshoram Surlndranath Photo-mag Pvt. Ltd. v. Assistant Commissioner of Commercial Taxes reported in 121 STC 175. In that judgment, learned Judges of the Karnataka High Court relied on the judgment of the Supreme Court in B.C. Kame's case and came to the conclusion that in the job of the photographer in supplying positive prints to his customer, no works contract is involved and photographs are not marketable or saleable commodity and as such no tax can be levied on it.',
	(int) 16 => '<p>14. Against the said judgment of the Karnataka High Court, the State of Karnataka High Court filed a S.L.P. before the Hon'ble Supreme Court bearing SLP Nos. 6136-6163 of 2000 and the Hon'ble Supreme Court dismissed the SLP on 20th April, 2000.',
	(int) 17 => '<p>15. In the case of Rainbow Colour Lab v. State of M.P. learned Judges of the Hon'ble Supreme Court reiterated its judgment in B.C. Kame's case and came to the following conclusion:',
	(int) 18 => '<p>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.',
	(int) 19 => '<p>Hon'ble Supreme Court in Bharat Sanchar Nigam Ltd. v. Union of India reported in 145 STC 91 again reiterated the principle in B.C. Kame's case and held that the work done by the photographer is only in the nature of a service contract not involving any sale of goods and held that the stand taken by the State cannot be sustained.',
	(int) 20 => '<p>16. Learned Counsel for the petitioner submitted that the photographs taken by the petitioner are not goods which can be sold and is not a marketable commodity like any other goods. When the copies of photographs are made out, they have no utility or value to any other person than the customer. It is already admitted that the papers utilized for photographs are tax paid goods. Therefore, it is contended by the learned Counsel for the petitioner that the work of photography does not come within the purview of works contract as defined in Section 2(jj) of the Orissa Sales Tax Act.',
	(int) 21 => '<p>17. Learned Counsel for the Revenue in this case virtually did not contest the submission made by the learned Counsel for the petitioner and in support of his contention, learned Counsel for the Revenue relied on a decision of the Supreme Court in the case of Imagic Creative Pvt. Ltd. v. Commissioner of Commercial Taxes and Ors. reported in (2008) 10 RC 236. In that judgment, learned Judges held that since the contract in question is a service contract, it is difficult to hold that in a case of this nature, sales tax would be payable on the value of the entire contract irrespective of the element of service provided.',
	(int) 22 => '<p>For the reasons discussed above, we answer the first question in the negative and the second question, in the affirmative. We thus answer both the questions in favour of the assessee and against the Revenue.',
	(int) 23 => '<p>The three revision applications are thus disposed of.',
	(int) 24 => '<p>No costs.',
	(int) 25 => '<p>B.N. Mahapatra, J.',
	(int) 26 => '<p>18. I agree.<p>',
	(int) 27 => '<p>'
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6. Thereafter the petitioner came up with a reference application under Section 24(1) of the Orissa Sales Tax Act framing certain questions for being referred to the Hon'ble High Court. The said prayer of the petitioner was rejected by the Tribunal. Then the petitioner moved Hon'ble High Court under Section 24(2)(b) of the Orissa Sales Tax Act, 1947 whereupon the High Court directed the Tribunal to state to case and refer the questions under Section 24(3) of the OST Act for a decision of the High Court.

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	'title_for_layout' => 'Studio Sujata Vs Commissioner of Sales Tax - Citation 531271 - Court Judgment | ',
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		'Judgement' => array(
			'id' => '531271',
			'acts' => '',
			'appealno' => '',
			'appellant' => 'Studio Sujata',
			'authreffered' => '',
			'casename' => 'Studio Sujata Vs. Commissioner of Sales Tax',
			'casenote' => 'Sales Tax - Assessment - Contract of Sale - Section 12 (5) of Orissa Sales Tax 1947 - Petitioner carries on business of processing and developing photography - Revenue assessed petitioner under Section 12(5) of Act on ground that activities of petitioner can be called works contract - Petitioner approached to Assistant of Sales Tax on ground that there is no contract of sale between the petitioner and the client, it is only service - Dismissed and affirmed by Tribunal - Hence present petition - Whether Tribunal is right to held that tax is exigible for photographs as execution of works contract or not? - Held, as per precedent laid down by Supreme Court in case of Sales Tax Officer v. B.C. Kame that photographer takes photograph and develops negatives and does other photographic work and thereafter supplies prints to his client - By doing so he cannot be said to enter into contract for sale of goods - Therefore, job of photographer is contract for work and labour and it is not contract of sale - Revenue committed mistake in assessing petitioner under Section 12(5) of Act on basis of contract of sale - Petition disposed of accordingly  - STATE FINANCIAL CORPORATIONS ACT, 1951 [63/1951]. Section 29; [P.K. Tripathy, A.K. Parichha & N.Prusty, JJ] Discharge of loan  Orissa Forest Act (14 of 1972), Section 56  Confiscation of vehicle - Held, The Authorities under Section 56 of the Orissa Forest Act, 1972 are not obliged to release the vehicle from the confiscation proceeding or to pay the sale proceeds of the vehicle after the order of confiscation in favour of Orissa State Financial Corporation when such vehicles were purchased on being financed by the Orissa State Financial Corporation and the loan had not been liquidated by the date of the seizure/confiscation of the vehicle. Concept of first charge or second charge has no applicability when the vehicle is not otherwise disposed of to determine the liabilities of the loanee. On the other hand the vehicle having been found indulged in forest offences was made subject matter of a confiscation proceedings, and therefore, the procedure followed for confiscation of the vehicle and for its sale is punitive in nature and not with a view to give benefit to anybody including the Department which initiated the confiscation proceeding. Apart from that, the claim of the Orissa State Financial Corporation as against its loanee (who had taken the vehicle on hire- purchase agreement) brings the loanee and the sureties within the default clause under the State Financial Corporation Act, 1951 or the heirs and successors of such persons. Procedure is provided in the Act, 1951 and the Rules thereof about the manner in which such loan is to be recovered, and in that context only the vehicle under the hire-purchase agreement is placed as the first charge. If such property is not available for any reason, then the loan is not automatically waived or the loanee and his sureties are not automatically redeemed of the liabilities to repay. The Financial Corporation is concerned with repayment of loan either from the property or persons offered as surety. Thus, a vehicle, which is subject matter of confiscation proceeding under the Act, 1872, being not available to the Orissa State Financial Corporation for adjustment of the unpaid loan, that does not at all bring out an anomalous situation so as to defeat the right of the Orissa State Financial Corporation. Agreement between the Orissa State Financial Corporation and the loanee is a pure and simple contract governed by the provisions of the Contract Act, 1872 read with the provisions in the Act, 1951 and its Rules. On the other hand, a confiscation proceeding under the Act, 1972 is punitive in nature for commission of a forest offence. Thus, by virtue of the provision in Section 56 read with Section 64 (2) of the Act, 1972, the action taken for confiscation of the vehicle cannot be extended to grant protection of the loan advanced by Orissa State Financial Corporation. By doing that it amounts to grant premium to the pick-pockets in as much as, by making payment of the confiscation amount in favour of the Orissa State Financial Corporation the loan burden of the accused of the forest offence is reduced to the extent of the sale proceeds of the vehicle. In other words, on payment of the sale proceeds of the confiscation proceeding to the Orissa State Financial Corporation towards discharge of the loan account of the accused of a forest offence, it would lead to a system to reward him by repayment of his loan. Then it does not become a penalty nor the action become punitive, but it remains as a reward to the accused of forest offence. Such a concept is totally not conceivable from any provision in the Act, 1972 or the Act, 1951. [AIR 2002 Orissa 130 Overruled]. -- STATE FINANCIAL CORPORATIONS ACT, 1951. 
Section 29; Discharge of loan  Orissa Forest Act (14 of 1972), Section 56  Confiscation of vehicle - Held, The Authorities under Section 56 of the Orissa Forest Act, 1972 are not obliged to release the vehicle from the confiscation proceeding or to pay the sale proceeds of the vehicle after the order of confiscation in favour of Orissa State Financial Corporation when such vehicles were purchased on being financed by the Orissa State Financial Corporation and the loan had not been liquidated by the date of the seizure/confiscation of the vehicle. Concept of first charge or second charge has no applicability when the vehicle is not otherwise disposed of to determine the liabilities of the loanee. On the other hand the vehicle having been found indulged in forest offences was made subject matter of a confiscation proceedings, and therefore, the procedure followed for confiscation of the vehicle and for its sale is punitive in nature and not with a view to give benefit to anybody including the Department which initiated the confiscation proceeding. Apart from that, the claim of the Orissa State Financial Corporation as against its loanee (who had taken the vehicle on hire- purchase agreement) brings the loanee and the sureties within the default clause under the State Financial Corporation Act, 1951 or the heirs and successors of such persons. Procedure is provided in the Act, 1951 and the Rules thereof about the manner in which such loan is to be recovered, and in that context only the vehicle under the hire-purchase agreement is placed as the first charge. If such property is not available for any reason, then the loan is not automatically waived or the loanee and his sureties are not automatically redeemed of the liabilities to repay. The Financial Corporation is concerned with repayment of loan either from the property or persons offered as surety. Thus, a vehicle, which is subject matter of confiscation proceeding under the Act, 1872, being not available to the Orissa State Financial Corporation for adjustment of the unpaid loan, that does not at all bring out an anomalous situation so as to defeat the right of the Orissa State Financial Corporation. Agreement between the Orissa State Financial Corporation and the loanee is a pure and simple contract governed by the provisions of the Contract Act, 1872 read with the provisions in the Act, 1951 and its Rules. On the other hand, a confiscation proceeding under the Act, 1972 is punitive in nature for commission of a forest offence. Thus, by virtue of the provision in Section 56 read with Section 64 (2) of the Act, 1972, the action taken for confiscation of the vehicle cannot be extended to grant protection of the loan advanced by Orissa State Financial Corporation. By doing that it amounts to grant premium to the pick-pockets in as much as, by making payment of the confiscation amount in favour of the Orissa State Financial Corporation the loan burden of the accused of the forest offence is reduced to the extent of the sale proceeds of the vehicle. In other words, on payment of the sale proceeds of the confiscation proceeding to the Orissa State Financial Corporation towards discharge of the loan account of the accused of a forest offence, it would lead to a system to reward him by repayment of his loan. Then it does not become a penalty nor the action become punitive, but it remains as a reward to the accused of forest offence. Such a concept is totally not conceivable from any provision in the Act, 1972 or the Act, 1951. [AIR 2002 Orissa 130 Overruled].  -  In that case, the stand of the Revenue was disapproved by the Orissa High Court. 16. Learned Counsel for the petitioner submitted that the photographs taken by the petitioner are not goods which can be sold and is not a marketable commodity like any other goods.',
			'caseanalysis' => null,
			'casesref' => 'Imagic Creative Pvt. Ltd. v. Commissioner of Commercial Taxes and Ors.;',
			'citingcases' => '',
			'counselplain' => '',
			'counseldef' => '',
			'court' => 'Orissa',
			'court_type' => 'HC',
			'decidedon' => '2008-04-02',
			'deposition' => '',
			'favorof' => null,
			'findings' => null,
			'judge' => ' A.K. Ganguly, C.J. and; B.N. Mahapatra, J.',
			'judgement' => '<p style="text-align: justify;">A.K. Ganguly, C.J.</p><p style="text-align: justify;">1. Initially three S.J.Cs. being S.J.C. Nos. 10 of 1997, 8 of 1997 and 9 of 1997 were filed and subsequently renumbered as STREV Nos. 212, 214 and 216 of 2007 respectively. In view of the common questions of facts and law, all the three Revision Applications are heard and disposed of together.</p><p style="text-align: justify;">2. The following questions of law arising out of the order passed by the Orissa Sales Tax Tribunal on 8.12.1993 in Second Appeal Nos. 3345 to 3350 of 1991-92 have been referred to this Hon'ble High Court in terms of the order of this Hon'ble Court dated 24.2.1997. The questions are:</p><p style="text-align: justify;">(i) Whether on the facts and in the circumstances of the case, the Tribunal is right to held that tax is exigible for photographs as execution of works contract ?</p><p style="text-align: justify;">(ii) Whether on the facts and in the circumstances of the case, the conclusion of the Tribunal is perverse due to non-consideration and mis-consideration of facts and law and, therefore, it is liable to be set aside for re-hearing ?</p><p style="text-align: justify;">3. The materials facts out of which those questions arise are that the petitioner carries on the business of processing and developing photography. In the usual course of business, the petitioner takes photographs of persons or of family and then develops the negative by employing his skill and labour and then supplies the photographs to the clients. These photographs which are prepared by the petitioner are not commercial items because they are neither purchased nor sold. However, to develop these photographs employment of skill and labour is essential. It may be mentioned that petitioner does not carry on any sale of photographs of national leaders, God and Goddess.</p><p style="text-align: justify;">4. After the passing of 46th amendment of the Constitution of India and consequent amendments thereto in Orissa Sales Tax Act (OST Act), the Sales Tax Officer, Bhubaneswar-II Circle, Bhubaneswar sent notices to assess the petitioner as an unregistered dealer under Section 12 (5) of the OST Act, inter alia, contending that the petitioner's activities can be called 'works contract'. Pursuant to said notice, the petitioner gave its reply and appeared before the Sales Tax Officer and produced the books of account and documents including Receipts, Purchase Memos, Vouchers, Ledger and thereby denied its liability under the OST Act. The petitioner also submitted objection petitions on various dates i.e. 28.12.1985, 10.1.1986, 20.2.1986 and 29.2.1988 contending, inter alia, that the petitioner has no sales tax liability under OST Act and the notices, which were issued, are without jurisdiction.</p><p style="text-align: justify;">5. Ignoring the said objections of the petitioner, the Sales Tax Officer, Bhubaneswar-II Circle, Bhubaneswar assessed the petitioner as an unregistered dealer, inter alia, holding that the petitioner is liable to pay sales tax as petitioner has been alleged to carry activities of 'works contract'. Therefore, orders of assessment being dated 29.2.1988 for the years 1984-85 (9/84 to 3/85), 1985-86 and 1986- 87 under Section 12(5) of OST Act and under Rule 5 of the Orissa Additional Sales Tax Rules, 1975 were passed and a tax of Rs. 20,765.00 and penalty of Rs. 5,000.00 totalling to Rs. 25,765.00 was imposed on the petitioner. The petitioner then filed the First Appeal before the learned Assistant Commissioner of Sales Tax. The First Appellate Authority by an order dated 27.9.1991 confirmed the levy of tax under the OST Act, but reduced the penalty to Rs. 1250.00. Thereupon, the petitioner filed the Second Appeal before the Orissa Sales Tax Tribunal, Cuttack. The said Tribunal heard the Second Appeal and in course of hearing, the petitioner raised various contentions. Ultimately, the Tribunal upheld the levy of tax but deleted the penalty.</p><p style="text-align: justify;">6. Thereafter the petitioner came up with a reference application under Section 24(1) of the Orissa Sales Tax Act framing certain questions for being referred to the Hon'ble High Court. The said prayer of the petitioner was rejected by the Tribunal. Then the petitioner moved Hon'ble High Court under Section 24(2)(b) of the Orissa Sales Tax Act, 1947 whereupon the High Court directed the Tribunal to state to case and refer the questions under Section 24(3) of the OST Act for a decision of the High Court.</p><p style="text-align: justify;">7. Accordingly, the Tribunal stated the case and referred the aforesaid questions for a decision of the High Court.</p><p style="text-align: justify;">8. Learned Counsel for the petitioner before the High Court submitted that in the transaction in question, there is no contract of sale between the petitioner and the client. It is only a contract of service and the photographs, which the petitioner produced by supplying the same has no commercial value and are not marketable. So, there is no question of a works contract. It is the consistent stand of the petitioner that the present photographs which are produced by the petitioner have no utility or value to any other person than the customer. By developing such photographs, the petitioner only renders service to his customers. The customer pays for the service rendered by the petitioner. It is the contention of the petitioner that his activity is similar to that of consulting firm preparing plan and sketches pursuant to client's specification or professional giving opinion on papers. All those activities are done to serve the client. Therefore, this does not come within the purview of the definition of 'goods', 'sale', 'dealer' or 'works contract'. It is the petitioner's case that he purchased the goods, namely, papers on payment of sales tax. Further levy of tax on the personal service rendered to the client of the petitioner will amount to double taxation. It is also the contention of the petitioner that the paper which is used in the photography are incidental and insignificant.</p><p style="text-align: justify;">9. In support of its contention, learned Counsel for the petitioner has relied on several judgments. First reliance was place on the judgment of the Supreme Court in the case of Sales Tax Officer v. B.C. Kame reported in 39 STC 237(SC). At page 241 of the report, learned Judges of the Supreme Court held that a photographer takes the photograph and develops the negatives and does other photographic work and thereafter supplies the prints to his client. By doing so he cannot be said to enter into a contract for sale of goods. On the other hand, the contract is for use of skill and labour by the photographer to bring about the desired result. Learned Judges held that the job of a photographer is a contract for work and labour and it is not a contract of sale.</p><p style="text-align: justify;">10. Reliance was also placed on a judgment of this High Court in the case of Photo Emporium v. Addl. District Magistrate reported in 77 STC 199 in which this High Court followed the ratio of the judgment of the Supreme Court in the case of B.C. Kame. In that case, the stand of the Revenue was disapproved by the Orissa High Court.</p><p style="text-align: justify;">11. Similar view was taken in 110 STC 145 in the case of Foto Colour Labs Pvt. Ltd. v. Commercial Taxes Officer where the Tribunal held that the transfer of paper in the photograph is purely incidental and payment is only taken to give positive prints and not to get the photo papers. Therefore, the contract in between the petitioner and his client is not a contract of sale, and neither directly or indirectly works contract is involved in the supply of photo papers. Similar view was taken by the West Bengal Taxation Tribunal in the case of Studio Kamalalaya v. Commercial Tax Officer reported in 89 STC 307.</p><p style="text-align: justify;">12. In the case of Bavens v. Onion of India report in 97 STC 161, learned Judges held that when a photographer takes a photograph of his customer, he develops the negative and supplies positive prints in the desired size to the customer. In doing so the photographer uses his own camera and his own film. The negative belongs to the photographer and not to the customer. No basic goods are provided by the customer which are subjected to processing by the photographer so as to make the contract a works contract. There is no accretion to goods or property or the nucleus of a property which belongs to the customer. It is the skill of the photographer which is most important to get the desired result.</p><p style="text-align: justify;">13. Hon'ble Karnataka High Court followed the same principle in the case of Keshoram Surlndranath Photo-mag Pvt. Ltd. v. Assistant Commissioner of Commercial Taxes reported in 121 STC 175. In that judgment, learned Judges of the Karnataka High Court relied on the judgment of the Supreme Court in B.C. Kame's case and came to the conclusion that in the job of the photographer in supplying positive prints to his customer, no works contract is involved and photographs are not marketable or saleable commodity and as such no tax can be levied on it.</p><p style="text-align: justify;">14. Against the said judgment of the Karnataka High Court, the State of Karnataka High Court filed a S.L.P. before the Hon'ble Supreme Court bearing SLP Nos. 6136-6163 of 2000 and the Hon'ble Supreme Court dismissed the SLP on 20th April, 2000.</p><p style="text-align: justify;">15. In the case of Rainbow Colour Lab v. State of M.P. learned Judges of the Hon'ble Supreme Court reiterated its judgment in B.C. Kame's case and came to the following conclusion:</p><p style="text-align: justify;">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.</p><p style="text-align: justify;">Hon'ble Supreme Court in Bharat Sanchar Nigam Ltd. v. Union of India reported in 145 STC 91 again reiterated the principle in B.C. Kame's case and held that the work done by the photographer is only in the nature of a service contract not involving any sale of goods and held that the stand taken by the State cannot be sustained.</p><p style="text-align: justify;">16. Learned Counsel for the petitioner submitted that the photographs taken by the petitioner are not goods which can be sold and is not a marketable commodity like any other goods. When the copies of photographs are made out, they have no utility or value to any other person than the customer. It is already admitted that the papers utilized for photographs are tax paid goods. Therefore, it is contended by the learned Counsel for the petitioner that the work of photography does not come within the purview of works contract as defined in Section 2(jj) of the Orissa Sales Tax Act.</p><p style="text-align: justify;">17. Learned Counsel for the Revenue in this case virtually did not contest the submission made by the learned Counsel for the petitioner and in support of his contention, learned Counsel for the Revenue relied on a decision of the Supreme Court in the case of Imagic Creative Pvt. Ltd. v. Commissioner of Commercial Taxes and Ors. reported in (2008) 10 RC 236. In that judgment, learned Judges held that since the contract in question is a service contract, it is difficult to hold that in a case of this nature, sales tax would be payable on the value of the entire contract irrespective of the element of service provided.</p><p style="text-align: justify;">For the reasons discussed above, we answer the first question in the negative and the second question, in the affirmative. We thus answer both the questions in favour of the assessee and against the Revenue.</p><p style="text-align: justify;">The three revision applications are thus disposed of.</p><p style="text-align: justify;">No costs.</p><p style="text-align: justify;">B.N. Mahapatra, J.</p><p style="text-align: justify;">18. I agree.<p style="text-align: justify;"></p><p style="text-align: justify;">',
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			'pubs' => '106(2008)CLT317; 2008(I)OLR953; (2008)17VST289(Orissa)',
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			'respondent' => 'Commissioner of Sales Tax',
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		'appellant' => 'Studio Sujata',
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		'casename' => 'Studio Sujata Vs. Commissioner of Sales Tax',
		'casenote' => 'Sales Tax - Assessment - Contract of Sale - Section 12 (5) of Orissa Sales Tax 1947 - Petitioner carries on business of processing and developing photography - Revenue assessed petitioner under Section 12(5) of Act on ground that activities of petitioner can be called works contract - Petitioner approached to Assistant of Sales Tax on ground that there is no contract of sale between the petitioner and the client, it is only service - Dismissed and affirmed by Tribunal - Hence present petition - Whether Tribunal is right to held that tax is exigible for photographs as execution of works contract or not? - Held, as per precedent laid down by Supreme Court in case of Sales Tax Officer v. B.C. Kame that photographer takes photograph and develops negatives and does other photographic work and thereafter supplies prints to his client - By doing so he cannot be said to enter into contract for sale of goods - Therefore, job of photographer is contract for work and labour and it is not contract of sale - Revenue committed mistake in assessing petitioner under Section 12(5) of Act on basis of contract of sale - Petition disposed of accordingly  - STATE FINANCIAL CORPORATIONS ACT, 1951 [63/1951]. Section 29; [P.K. Tripathy, A.K. Parichha & N.Prusty, JJ] Discharge of loan  Orissa Forest Act (14 of 1972), Section 56  Confiscation of vehicle - Held, The Authorities under Section 56 of the Orissa Forest Act, 1972 are not obliged to release the vehicle from the confiscation proceeding or to pay the sale proceeds of the vehicle after the order of confiscation in favour of Orissa State Financial Corporation when such vehicles were purchased on being financed by the Orissa State Financial Corporation and the loan had not been liquidated by the date of the seizure/confiscation of the vehicle. Concept of first charge or second charge has no applicability when the vehicle is not otherwise disposed of to determine the liabilities of the loanee. On the other hand the vehicle having been found indulged in forest offences was made subject matter of a confiscation proceedings, and therefore, the procedure followed for confiscation of the vehicle and for its sale is punitive in nature and not with a view to give benefit to anybody including the Department which initiated the confiscation proceeding. Apart from that, the claim of the Orissa State Financial Corporation as against its loanee (who had taken the vehicle on hire- purchase agreement) brings the loanee and the sureties within the default clause under the State Financial Corporation Act, 1951 or the heirs and successors of such persons. Procedure is provided in the Act, 1951 and the Rules thereof about the manner in which such loan is to be recovered, and in that context only the vehicle under the hire-purchase agreement is placed as the first charge. If such property is not available for any reason, then the loan is not automatically waived or the loanee and his sureties are not automatically redeemed of the liabilities to repay. The Financial Corporation is concerned with repayment of loan either from the property or persons offered as surety. Thus, a vehicle, which is subject matter of confiscation proceeding under the Act, 1872, being not available to the Orissa State Financial Corporation for adjustment of the unpaid loan, that does not at all bring out an anomalous situation so as to defeat the right of the Orissa State Financial Corporation. Agreement between the Orissa State Financial Corporation and the loanee is a pure and simple contract governed by the provisions of the Contract Act, 1872 read with the provisions in the Act, 1951 and its Rules. On the other hand, a confiscation proceeding under the Act, 1972 is punitive in nature for commission of a forest offence. Thus, by virtue of the provision in Section 56 read with Section 64 (2) of the Act, 1972, the action taken for confiscation of the vehicle cannot be extended to grant protection of the loan advanced by Orissa State Financial Corporation. By doing that it amounts to grant premium to the pick-pockets in as much as, by making payment of the confiscation amount in favour of the Orissa State Financial Corporation the loan burden of the accused of the forest offence is reduced to the extent of the sale proceeds of the vehicle. In other words, on payment of the sale proceeds of the confiscation proceeding to the Orissa State Financial Corporation towards discharge of the loan account of the accused of a forest offence, it would lead to a system to reward him by repayment of his loan. Then it does not become a penalty nor the action become punitive, but it remains as a reward to the accused of forest offence. Such a concept is totally not conceivable from any provision in the Act, 1972 or the Act, 1951. [AIR 2002 Orissa 130 Overruled]. -- STATE FINANCIAL CORPORATIONS ACT, 1951. 
Section 29; Discharge of loan  Orissa Forest Act (14 of 1972), Section 56  Confiscation of vehicle - Held, The Authorities under Section 56 of the Orissa Forest Act, 1972 are not obliged to release the vehicle from the confiscation proceeding or to pay the sale proceeds of the vehicle after the order of confiscation in favour of Orissa State Financial Corporation when such vehicles were purchased on being financed by the Orissa State Financial Corporation and the loan had not been liquidated by the date of the seizure/confiscation of the vehicle. Concept of first charge or second charge has no applicability when the vehicle is not otherwise disposed of to determine the liabilities of the loanee. On the other hand the vehicle having been found indulged in forest offences was made subject matter of a confiscation proceedings, and therefore, the procedure followed for confiscation of the vehicle and for its sale is punitive in nature and not with a view to give benefit to anybody including the Department which initiated the confiscation proceeding. Apart from that, the claim of the Orissa State Financial Corporation as against its loanee (who had taken the vehicle on hire- purchase agreement) brings the loanee and the sureties within the default clause under the State Financial Corporation Act, 1951 or the heirs and successors of such persons. Procedure is provided in the Act, 1951 and the Rules thereof about the manner in which such loan is to be recovered, and in that context only the vehicle under the hire-purchase agreement is placed as the first charge. If such property is not available for any reason, then the loan is not automatically waived or the loanee and his sureties are not automatically redeemed of the liabilities to repay. The Financial Corporation is concerned with repayment of loan either from the property or persons offered as surety. Thus, a vehicle, which is subject matter of confiscation proceeding under the Act, 1872, being not available to the Orissa State Financial Corporation for adjustment of the unpaid loan, that does not at all bring out an anomalous situation so as to defeat the right of the Orissa State Financial Corporation. Agreement between the Orissa State Financial Corporation and the loanee is a pure and simple contract governed by the provisions of the Contract Act, 1872 read with the provisions in the Act, 1951 and its Rules. On the other hand, a confiscation proceeding under the Act, 1972 is punitive in nature for commission of a forest offence. Thus, by virtue of the provision in Section 56 read with Section 64 (2) of the Act, 1972, the action taken for confiscation of the vehicle cannot be extended to grant protection of the loan advanced by Orissa State Financial Corporation. By doing that it amounts to grant premium to the pick-pockets in as much as, by making payment of the confiscation amount in favour of the Orissa State Financial Corporation the loan burden of the accused of the forest offence is reduced to the extent of the sale proceeds of the vehicle. In other words, on payment of the sale proceeds of the confiscation proceeding to the Orissa State Financial Corporation towards discharge of the loan account of the accused of a forest offence, it would lead to a system to reward him by repayment of his loan. Then it does not become a penalty nor the action become punitive, but it remains as a reward to the accused of forest offence. Such a concept is totally not conceivable from any provision in the Act, 1972 or the Act, 1951. [AIR 2002 Orissa 130 Overruled].  -  In that case, the stand of the Revenue was disapproved by the Orissa High Court. 16. Learned Counsel for the petitioner submitted that the photographs taken by the petitioner are not goods which can be sold and is not a marketable commodity like any other goods.',
		'caseanalysis' => null,
		'casesref' => 'Imagic Creative Pvt. Ltd. v. Commissioner of Commercial Taxes and Ors.;',
		'citingcases' => '',
		'counselplain' => '',
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		'court' => 'Orissa',
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		'decidedon' => '2008-04-02',
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		'judge' => ' A.K. Ganguly, C.J. and; B.N. Mahapatra, J.',
		'judgement' => '<p>A.K. Ganguly, C.J.</p><p>1. Initially three S.J.Cs. being S.J.C. Nos. 10 of 1997, 8 of 1997 and 9 of 1997 were filed and subsequently renumbered as STREV Nos. 212, 214 and 216 of 2007 respectively. In view of the common questions of facts and law, all the three Revision Applications are heard and disposed of together.</p><p>2. The following questions of law arising out of the order passed by the Orissa Sales Tax Tribunal on 8.12.1993 in Second Appeal Nos. 3345 to 3350 of 1991-92 have been referred to this Hon'ble High Court in terms of the order of this Hon'ble Court dated 24.2.1997. The questions are:</p><p>(i) Whether on the facts and in the circumstances of the case, the Tribunal is right to held that tax is exigible for photographs as execution of works contract ?</p><p>(ii) Whether on the facts and in the circumstances of the case, the conclusion of the Tribunal is perverse due to non-consideration and mis-consideration of facts and law and, therefore, it is liable to be set aside for re-hearing ?</p><p>3. The materials facts out of which those questions arise are that the petitioner carries on the business of processing and developing photography. In the usual course of business, the petitioner takes photographs of persons or of family and then develops the negative by employing his skill and labour and then supplies the photographs to the clients. These photographs which are prepared by the petitioner are not commercial items because they are neither purchased nor sold. However, to develop these photographs employment of skill and labour is essential. It may be mentioned that petitioner does not carry on any sale of photographs of national leaders, God and Goddess.</p><p>4. After the passing of 46th amendment of the Constitution of India and consequent amendments thereto in Orissa Sales Tax Act (OST Act), the Sales Tax Officer, Bhubaneswar-II Circle, Bhubaneswar sent notices to assess the petitioner as an unregistered dealer under Section 12 (5) of the OST Act, inter alia, contending that the petitioner's activities can be called 'works contract'. Pursuant to said notice, the petitioner gave its reply and appeared before the Sales Tax Officer and produced the books of account and documents including Receipts, Purchase Memos, Vouchers, Ledger and thereby denied its liability under the OST Act. The petitioner also submitted objection petitions on various dates i.e. 28.12.1985, 10.1.1986, 20.2.1986 and 29.2.1988 contending, inter alia, that the petitioner has no sales tax liability under OST Act and the notices, which were issued, are without jurisdiction.</p><p>5. Ignoring the said objections of the petitioner, the Sales Tax Officer, Bhubaneswar-II Circle, Bhubaneswar assessed the petitioner as an unregistered dealer, inter alia, holding that the petitioner is liable to pay sales tax as petitioner has been alleged to carry activities of 'works contract'. Therefore, orders of assessment being dated 29.2.1988 for the years 1984-85 (9/84 to 3/85), 1985-86 and 1986- 87 under Section 12(5) of OST Act and under Rule 5 of the Orissa Additional Sales Tax Rules, 1975 were passed and a tax of Rs. 20,765.00 and penalty of Rs. 5,000.00 totalling to Rs. 25,765.00 was imposed on the petitioner. The petitioner then filed the First Appeal before the learned Assistant Commissioner of Sales Tax. The First Appellate Authority by an order dated 27.9.1991 confirmed the levy of tax under the OST Act, but reduced the penalty to Rs. 1250.00. Thereupon, the petitioner filed the Second Appeal before the Orissa Sales Tax Tribunal, Cuttack. The said Tribunal heard the Second Appeal and in course of hearing, the petitioner raised various contentions. Ultimately, the Tribunal upheld the levy of tax but deleted the penalty.</p><p>6. Thereafter the petitioner came up with a reference application under Section 24(1) of the Orissa Sales Tax Act framing certain questions for being referred to the Hon'ble High Court. The said prayer of the petitioner was rejected by the Tribunal. Then the petitioner moved Hon'ble High Court under Section 24(2)(b) of the Orissa Sales Tax Act, 1947 whereupon the High Court directed the Tribunal to state to case and refer the questions under Section 24(3) of the OST Act for a decision of the High Court.</p><p>7. Accordingly, the Tribunal stated the case and referred the aforesaid questions for a decision of the High Court.</p><p>8. Learned Counsel for the petitioner before the High Court submitted that in the transaction in question, there is no contract of sale between the petitioner and the client. It is only a contract of service and the photographs, which the petitioner produced by supplying the same has no commercial value and are not marketable. So, there is no question of a works contract. It is the consistent stand of the petitioner that the present photographs which are produced by the petitioner have no utility or value to any other person than the customer. By developing such photographs, the petitioner only renders service to his customers. The customer pays for the service rendered by the petitioner. It is the contention of the petitioner that his activity is similar to that of consulting firm preparing plan and sketches pursuant to client's specification or professional giving opinion on papers. All those activities are done to serve the client. Therefore, this does not come within the purview of the definition of 'goods', 'sale', 'dealer' or 'works contract'. It is the petitioner's case that he purchased the goods, namely, papers on payment of sales tax. Further levy of tax on the personal service rendered to the client of the petitioner will amount to double taxation. It is also the contention of the petitioner that the paper which is used in the photography are incidental and insignificant.</p><p>9. In support of its contention, learned Counsel for the petitioner has relied on several judgments. First reliance was place on the judgment of the Supreme Court in the case of Sales Tax Officer v. B.C. Kame reported in 39 STC 237(SC). At page 241 of the report, learned Judges of the Supreme Court held that a photographer takes the photograph and develops the negatives and does other photographic work and thereafter supplies the prints to his client. By doing so he cannot be said to enter into a contract for sale of goods. On the other hand, the contract is for use of skill and labour by the photographer to bring about the desired result. Learned Judges held that the job of a photographer is a contract for work and labour and it is not a contract of sale.</p><p>10. Reliance was also placed on a judgment of this High Court in the case of Photo Emporium v. Addl. District Magistrate reported in 77 STC 199 in which this High Court followed the ratio of the judgment of the Supreme Court in the case of B.C. Kame. In that case, the stand of the Revenue was disapproved by the Orissa High Court.</p><p>11. Similar view was taken in 110 STC 145 in the case of Foto Colour Labs Pvt. Ltd. v. Commercial Taxes Officer where the Tribunal held that the transfer of paper in the photograph is purely incidental and payment is only taken to give positive prints and not to get the photo papers. Therefore, the contract in between the petitioner and his client is not a contract of sale, and neither directly or indirectly works contract is involved in the supply of photo papers. Similar view was taken by the West Bengal Taxation Tribunal in the case of Studio Kamalalaya v. Commercial Tax Officer reported in 89 STC 307.</p><p>12. In the case of Bavens v. Onion of India report in 97 STC 161, learned Judges held that when a photographer takes a photograph of his customer, he develops the negative and supplies positive prints in the desired size to the customer. In doing so the photographer uses his own camera and his own film. The negative belongs to the photographer and not to the customer. No basic goods are provided by the customer which are subjected to processing by the photographer so as to make the contract a works contract. There is no accretion to goods or property or the nucleus of a property which belongs to the customer. It is the skill of the photographer which is most important to get the desired result.</p><p>13. Hon'ble Karnataka High Court followed the same principle in the case of Keshoram Surlndranath Photo-mag Pvt. Ltd. v. Assistant Commissioner of Commercial Taxes reported in 121 STC 175. In that judgment, learned Judges of the Karnataka High Court relied on the judgment of the Supreme Court in B.C. Kame's case and came to the conclusion that in the job of the photographer in supplying positive prints to his customer, no works contract is involved and photographs are not marketable or saleable commodity and as such no tax can be levied on it.</p><p>14. Against the said judgment of the Karnataka High Court, the State of Karnataka High Court filed a S.L.P. before the Hon'ble Supreme Court bearing SLP Nos. 6136-6163 of 2000 and the Hon'ble Supreme Court dismissed the SLP on 20th April, 2000.</p><p>15. In the case of Rainbow Colour Lab v. State of M.P. learned Judges of the Hon'ble Supreme Court reiterated its judgment in B.C. Kame's case and came to the following conclusion:</p><p>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.</p><p>Hon'ble Supreme Court in Bharat Sanchar Nigam Ltd. v. Union of India reported in 145 STC 91 again reiterated the principle in B.C. Kame's case and held that the work done by the photographer is only in the nature of a service contract not involving any sale of goods and held that the stand taken by the State cannot be sustained.</p><p>16. Learned Counsel for the petitioner submitted that the photographs taken by the petitioner are not goods which can be sold and is not a marketable commodity like any other goods. When the copies of photographs are made out, they have no utility or value to any other person than the customer. It is already admitted that the papers utilized for photographs are tax paid goods. Therefore, it is contended by the learned Counsel for the petitioner that the work of photography does not come within the purview of works contract as defined in Section 2(jj) of the Orissa Sales Tax Act.</p><p>17. Learned Counsel for the Revenue in this case virtually did not contest the submission made by the learned Counsel for the petitioner and in support of his contention, learned Counsel for the Revenue relied on a decision of the Supreme Court in the case of Imagic Creative Pvt. Ltd. v. Commissioner of Commercial Taxes and Ors. reported in (2008) 10 RC 236. In that judgment, learned Judges held that since the contract in question is a service contract, it is difficult to hold that in a case of this nature, sales tax would be payable on the value of the entire contract irrespective of the element of service provided.</p><p>For the reasons discussed above, we answer the first question in the negative and the second question, in the affirmative. We thus answer both the questions in favour of the assessee and against the Revenue.</p><p>The three revision applications are thus disposed of.</p><p>No costs.</p><p>B.N. Mahapatra, J.</p><p>18. I agree.<p></p><p>',
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		'overruledby' => null,
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		'pubs' => '106(2008)CLT317; 2008(I)OLR953; (2008)17VST289(Orissa)',
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		'respondent' => 'Commissioner of Sales Tax',
		'sub' => 'Sales Tax/VAT',
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	(int) 0 => '<p>A.K. Ganguly, C.J.',
	(int) 1 => '<p>1. Initially three S.J.Cs. being S.J.C. Nos. 10 of 1997, 8 of 1997 and 9 of 1997 were filed and subsequently renumbered as STREV Nos. 212, 214 and 216 of 2007 respectively. In view of the common questions of facts and law, all the three Revision Applications are heard and disposed of together.',
	(int) 2 => '<p>2. The following questions of law arising out of the order passed by the Orissa Sales Tax Tribunal on 8.12.1993 in Second Appeal Nos. 3345 to 3350 of 1991-92 have been referred to this Hon'ble High Court in terms of the order of this Hon'ble Court dated 24.2.1997. The questions are:',
	(int) 3 => '<p>(i) Whether on the facts and in the circumstances of the case, the Tribunal is right to held that tax is exigible for photographs as execution of works contract ?',
	(int) 4 => '<p>(ii) Whether on the facts and in the circumstances of the case, the conclusion of the Tribunal is perverse due to non-consideration and mis-consideration of facts and law and, therefore, it is liable to be set aside for re-hearing ?',
	(int) 5 => '<p>3. The materials facts out of which those questions arise are that the petitioner carries on the business of processing and developing photography. In the usual course of business, the petitioner takes photographs of persons or of family and then develops the negative by employing his skill and labour and then supplies the photographs to the clients. These photographs which are prepared by the petitioner are not commercial items because they are neither purchased nor sold. However, to develop these photographs employment of skill and labour is essential. It may be mentioned that petitioner does not carry on any sale of photographs of national leaders, God and Goddess.',
	(int) 6 => '<p>4. After the passing of 46th amendment of the Constitution of India and consequent amendments thereto in Orissa Sales Tax Act (OST Act), the Sales Tax Officer, Bhubaneswar-II Circle, Bhubaneswar sent notices to assess the petitioner as an unregistered dealer under Section 12 (5) of the OST Act, inter alia, contending that the petitioner's activities can be called 'works contract'. Pursuant to said notice, the petitioner gave its reply and appeared before the Sales Tax Officer and produced the books of account and documents including Receipts, Purchase Memos, Vouchers, Ledger and thereby denied its liability under the OST Act. The petitioner also submitted objection petitions on various dates i.e. 28.12.1985, 10.1.1986, 20.2.1986 and 29.2.1988 contending, inter alia, that the petitioner has no sales tax liability under OST Act and the notices, which were issued, are without jurisdiction.',
	(int) 7 => '<p>5. Ignoring the said objections of the petitioner, the Sales Tax Officer, Bhubaneswar-II Circle, Bhubaneswar assessed the petitioner as an unregistered dealer, inter alia, holding that the petitioner is liable to pay sales tax as petitioner has been alleged to carry activities of 'works contract'. Therefore, orders of assessment being dated 29.2.1988 for the years 1984-85 (9/84 to 3/85), 1985-86 and 1986- 87 under Section 12(5) of OST Act and under Rule 5 of the Orissa Additional Sales Tax Rules, 1975 were passed and a tax of Rs. 20,765.00 and penalty of Rs. 5,000.00 totalling to Rs. 25,765.00 was imposed on the petitioner. The petitioner then filed the First Appeal before the learned Assistant Commissioner of Sales Tax. The First Appellate Authority by an order dated 27.9.1991 confirmed the levy of tax under the OST Act, but reduced the penalty to Rs. 1250.00. Thereupon, the petitioner filed the Second Appeal before the Orissa Sales Tax Tribunal, Cuttack. The said Tribunal heard the Second Appeal and in course of hearing, the petitioner raised various contentions. Ultimately, the Tribunal upheld the levy of tax but deleted the penalty.',
	(int) 8 => '<p>6. Thereafter the petitioner came up with a reference application under Section 24(1) of the Orissa Sales Tax Act framing certain questions for being referred to the Hon'ble High Court. The said prayer of the petitioner was rejected by the Tribunal. Then the petitioner moved Hon'ble High Court under Section 24(2)(b) of the Orissa Sales Tax Act, 1947 whereupon the High Court directed the Tribunal to state to case and refer the questions under Section 24(3) of the OST Act for a decision of the High Court.',
	(int) 9 => '<p>7. Accordingly, the Tribunal stated the case and referred the aforesaid questions for a decision of the High Court.',
	(int) 10 => '<p>8. Learned Counsel for the petitioner before the High Court submitted that in the transaction in question, there is no contract of sale between the petitioner and the client. It is only a contract of service and the photographs, which the petitioner produced by supplying the same has no commercial value and are not marketable. So, there is no question of a works contract. It is the consistent stand of the petitioner that the present photographs which are produced by the petitioner have no utility or value to any other person than the customer. By developing such photographs, the petitioner only renders service to his customers. The customer pays for the service rendered by the petitioner. It is the contention of the petitioner that his activity is similar to that of consulting firm preparing plan and sketches pursuant to client's specification or professional giving opinion on papers. All those activities are done to serve the client. Therefore, this does not come within the purview of the definition of 'goods', 'sale', 'dealer' or 'works contract'. It is the petitioner's case that he purchased the goods, namely, papers on payment of sales tax. Further levy of tax on the personal service rendered to the client of the petitioner will amount to double taxation. It is also the contention of the petitioner that the paper which is used in the photography are incidental and insignificant.',
	(int) 11 => '<p>9. In support of its contention, learned Counsel for the petitioner has relied on several judgments. First reliance was place on the judgment of the Supreme Court in the case of Sales Tax Officer v. B.C. Kame reported in 39 STC 237(SC). At page 241 of the report, learned Judges of the Supreme Court held that a photographer takes the photograph and develops the negatives and does other photographic work and thereafter supplies the prints to his client. By doing so he cannot be said to enter into a contract for sale of goods. On the other hand, the contract is for use of skill and labour by the photographer to bring about the desired result. Learned Judges held that the job of a photographer is a contract for work and labour and it is not a contract of sale.',
	(int) 12 => '<p>10. Reliance was also placed on a judgment of this High Court in the case of Photo Emporium v. Addl. District Magistrate reported in 77 STC 199 in which this High Court followed the ratio of the judgment of the Supreme Court in the case of B.C. Kame. In that case, the stand of the Revenue was disapproved by the Orissa High Court.',
	(int) 13 => '<p>11. Similar view was taken in 110 STC 145 in the case of Foto Colour Labs Pvt. Ltd. v. Commercial Taxes Officer where the Tribunal held that the transfer of paper in the photograph is purely incidental and payment is only taken to give positive prints and not to get the photo papers. Therefore, the contract in between the petitioner and his client is not a contract of sale, and neither directly or indirectly works contract is involved in the supply of photo papers. Similar view was taken by the West Bengal Taxation Tribunal in the case of Studio Kamalalaya v. Commercial Tax Officer reported in 89 STC 307.',
	(int) 14 => '<p>12. In the case of Bavens v. Onion of India report in 97 STC 161, learned Judges held that when a photographer takes a photograph of his customer, he develops the negative and supplies positive prints in the desired size to the customer. In doing so the photographer uses his own camera and his own film. The negative belongs to the photographer and not to the customer. No basic goods are provided by the customer which are subjected to processing by the photographer so as to make the contract a works contract. There is no accretion to goods or property or the nucleus of a property which belongs to the customer. It is the skill of the photographer which is most important to get the desired result.',
	(int) 15 => '<p>13. Hon'ble Karnataka High Court followed the same principle in the case of Keshoram Surlndranath Photo-mag Pvt. Ltd. v. Assistant Commissioner of Commercial Taxes reported in 121 STC 175. In that judgment, learned Judges of the Karnataka High Court relied on the judgment of the Supreme Court in B.C. Kame's case and came to the conclusion that in the job of the photographer in supplying positive prints to his customer, no works contract is involved and photographs are not marketable or saleable commodity and as such no tax can be levied on it.',
	(int) 16 => '<p>14. Against the said judgment of the Karnataka High Court, the State of Karnataka High Court filed a S.L.P. before the Hon'ble Supreme Court bearing SLP Nos. 6136-6163 of 2000 and the Hon'ble Supreme Court dismissed the SLP on 20th April, 2000.',
	(int) 17 => '<p>15. In the case of Rainbow Colour Lab v. State of M.P. learned Judges of the Hon'ble Supreme Court reiterated its judgment in B.C. Kame's case and came to the following conclusion:',
	(int) 18 => '<p>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.',
	(int) 19 => '<p>Hon'ble Supreme Court in Bharat Sanchar Nigam Ltd. v. Union of India reported in 145 STC 91 again reiterated the principle in B.C. Kame's case and held that the work done by the photographer is only in the nature of a service contract not involving any sale of goods and held that the stand taken by the State cannot be sustained.',
	(int) 20 => '<p>16. Learned Counsel for the petitioner submitted that the photographs taken by the petitioner are not goods which can be sold and is not a marketable commodity like any other goods. When the copies of photographs are made out, they have no utility or value to any other person than the customer. It is already admitted that the papers utilized for photographs are tax paid goods. Therefore, it is contended by the learned Counsel for the petitioner that the work of photography does not come within the purview of works contract as defined in Section 2(jj) of the Orissa Sales Tax Act.',
	(int) 21 => '<p>17. Learned Counsel for the Revenue in this case virtually did not contest the submission made by the learned Counsel for the petitioner and in support of his contention, learned Counsel for the Revenue relied on a decision of the Supreme Court in the case of Imagic Creative Pvt. Ltd. v. Commissioner of Commercial Taxes and Ors. reported in (2008) 10 RC 236. In that judgment, learned Judges held that since the contract in question is a service contract, it is difficult to hold that in a case of this nature, sales tax would be payable on the value of the entire contract irrespective of the element of service provided.',
	(int) 22 => '<p>For the reasons discussed above, we answer the first question in the negative and the second question, in the affirmative. We thus answer both the questions in favour of the assessee and against the Revenue.',
	(int) 23 => '<p>The three revision applications are thus disposed of.',
	(int) 24 => '<p>No costs.',
	(int) 25 => '<p>B.N. Mahapatra, J.',
	(int) 26 => '<p>18. I agree.<p>',
	(int) 27 => '<p>'
)
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7. Accordingly, the Tribunal stated the case and referred the aforesaid questions for a decision of the High Court.

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			'casename' => 'Studio Sujata Vs. Commissioner of Sales Tax',
			'casenote' => 'Sales Tax - Assessment - Contract of Sale - Section 12 (5) of Orissa Sales Tax 1947 - Petitioner carries on business of processing and developing photography - Revenue assessed petitioner under Section 12(5) of Act on ground that activities of petitioner can be called works contract - Petitioner approached to Assistant of Sales Tax on ground that there is no contract of sale between the petitioner and the client, it is only service - Dismissed and affirmed by Tribunal - Hence present petition - Whether Tribunal is right to held that tax is exigible for photographs as execution of works contract or not? - Held, as per precedent laid down by Supreme Court in case of Sales Tax Officer v. B.C. Kame that photographer takes photograph and develops negatives and does other photographic work and thereafter supplies prints to his client - By doing so he cannot be said to enter into contract for sale of goods - Therefore, job of photographer is contract for work and labour and it is not contract of sale - Revenue committed mistake in assessing petitioner under Section 12(5) of Act on basis of contract of sale - Petition disposed of accordingly  - STATE FINANCIAL CORPORATIONS ACT, 1951 [63/1951]. Section 29; [P.K. Tripathy, A.K. Parichha & N.Prusty, JJ] Discharge of loan  Orissa Forest Act (14 of 1972), Section 56  Confiscation of vehicle - Held, The Authorities under Section 56 of the Orissa Forest Act, 1972 are not obliged to release the vehicle from the confiscation proceeding or to pay the sale proceeds of the vehicle after the order of confiscation in favour of Orissa State Financial Corporation when such vehicles were purchased on being financed by the Orissa State Financial Corporation and the loan had not been liquidated by the date of the seizure/confiscation of the vehicle. Concept of first charge or second charge has no applicability when the vehicle is not otherwise disposed of to determine the liabilities of the loanee. On the other hand the vehicle having been found indulged in forest offences was made subject matter of a confiscation proceedings, and therefore, the procedure followed for confiscation of the vehicle and for its sale is punitive in nature and not with a view to give benefit to anybody including the Department which initiated the confiscation proceeding. Apart from that, the claim of the Orissa State Financial Corporation as against its loanee (who had taken the vehicle on hire- purchase agreement) brings the loanee and the sureties within the default clause under the State Financial Corporation Act, 1951 or the heirs and successors of such persons. Procedure is provided in the Act, 1951 and the Rules thereof about the manner in which such loan is to be recovered, and in that context only the vehicle under the hire-purchase agreement is placed as the first charge. If such property is not available for any reason, then the loan is not automatically waived or the loanee and his sureties are not automatically redeemed of the liabilities to repay. The Financial Corporation is concerned with repayment of loan either from the property or persons offered as surety. Thus, a vehicle, which is subject matter of confiscation proceeding under the Act, 1872, being not available to the Orissa State Financial Corporation for adjustment of the unpaid loan, that does not at all bring out an anomalous situation so as to defeat the right of the Orissa State Financial Corporation. Agreement between the Orissa State Financial Corporation and the loanee is a pure and simple contract governed by the provisions of the Contract Act, 1872 read with the provisions in the Act, 1951 and its Rules. On the other hand, a confiscation proceeding under the Act, 1972 is punitive in nature for commission of a forest offence. Thus, by virtue of the provision in Section 56 read with Section 64 (2) of the Act, 1972, the action taken for confiscation of the vehicle cannot be extended to grant protection of the loan advanced by Orissa State Financial Corporation. By doing that it amounts to grant premium to the pick-pockets in as much as, by making payment of the confiscation amount in favour of the Orissa State Financial Corporation the loan burden of the accused of the forest offence is reduced to the extent of the sale proceeds of the vehicle. In other words, on payment of the sale proceeds of the confiscation proceeding to the Orissa State Financial Corporation towards discharge of the loan account of the accused of a forest offence, it would lead to a system to reward him by repayment of his loan. Then it does not become a penalty nor the action become punitive, but it remains as a reward to the accused of forest offence. Such a concept is totally not conceivable from any provision in the Act, 1972 or the Act, 1951. [AIR 2002 Orissa 130 Overruled]. -- STATE FINANCIAL CORPORATIONS ACT, 1951. 
Section 29; Discharge of loan  Orissa Forest Act (14 of 1972), Section 56  Confiscation of vehicle - Held, The Authorities under Section 56 of the Orissa Forest Act, 1972 are not obliged to release the vehicle from the confiscation proceeding or to pay the sale proceeds of the vehicle after the order of confiscation in favour of Orissa State Financial Corporation when such vehicles were purchased on being financed by the Orissa State Financial Corporation and the loan had not been liquidated by the date of the seizure/confiscation of the vehicle. Concept of first charge or second charge has no applicability when the vehicle is not otherwise disposed of to determine the liabilities of the loanee. On the other hand the vehicle having been found indulged in forest offences was made subject matter of a confiscation proceedings, and therefore, the procedure followed for confiscation of the vehicle and for its sale is punitive in nature and not with a view to give benefit to anybody including the Department which initiated the confiscation proceeding. Apart from that, the claim of the Orissa State Financial Corporation as against its loanee (who had taken the vehicle on hire- purchase agreement) brings the loanee and the sureties within the default clause under the State Financial Corporation Act, 1951 or the heirs and successors of such persons. Procedure is provided in the Act, 1951 and the Rules thereof about the manner in which such loan is to be recovered, and in that context only the vehicle under the hire-purchase agreement is placed as the first charge. If such property is not available for any reason, then the loan is not automatically waived or the loanee and his sureties are not automatically redeemed of the liabilities to repay. The Financial Corporation is concerned with repayment of loan either from the property or persons offered as surety. Thus, a vehicle, which is subject matter of confiscation proceeding under the Act, 1872, being not available to the Orissa State Financial Corporation for adjustment of the unpaid loan, that does not at all bring out an anomalous situation so as to defeat the right of the Orissa State Financial Corporation. Agreement between the Orissa State Financial Corporation and the loanee is a pure and simple contract governed by the provisions of the Contract Act, 1872 read with the provisions in the Act, 1951 and its Rules. On the other hand, a confiscation proceeding under the Act, 1972 is punitive in nature for commission of a forest offence. Thus, by virtue of the provision in Section 56 read with Section 64 (2) of the Act, 1972, the action taken for confiscation of the vehicle cannot be extended to grant protection of the loan advanced by Orissa State Financial Corporation. By doing that it amounts to grant premium to the pick-pockets in as much as, by making payment of the confiscation amount in favour of the Orissa State Financial Corporation the loan burden of the accused of the forest offence is reduced to the extent of the sale proceeds of the vehicle. In other words, on payment of the sale proceeds of the confiscation proceeding to the Orissa State Financial Corporation towards discharge of the loan account of the accused of a forest offence, it would lead to a system to reward him by repayment of his loan. Then it does not become a penalty nor the action become punitive, but it remains as a reward to the accused of forest offence. Such a concept is totally not conceivable from any provision in the Act, 1972 or the Act, 1951. [AIR 2002 Orissa 130 Overruled].  -  In that case, the stand of the Revenue was disapproved by the Orissa High Court. 16. Learned Counsel for the petitioner submitted that the photographs taken by the petitioner are not goods which can be sold and is not a marketable commodity like any other goods.',
			'caseanalysis' => null,
			'casesref' => 'Imagic Creative Pvt. Ltd. v. Commissioner of Commercial Taxes and Ors.;',
			'citingcases' => '',
			'counselplain' => '',
			'counseldef' => '',
			'court' => 'Orissa',
			'court_type' => 'HC',
			'decidedon' => '2008-04-02',
			'deposition' => '',
			'favorof' => null,
			'findings' => null,
			'judge' => ' A.K. Ganguly, C.J. and; B.N. Mahapatra, J.',
			'judgement' => '<p style="text-align: justify;">A.K. Ganguly, C.J.</p><p style="text-align: justify;">1. Initially three S.J.Cs. being S.J.C. Nos. 10 of 1997, 8 of 1997 and 9 of 1997 were filed and subsequently renumbered as STREV Nos. 212, 214 and 216 of 2007 respectively. In view of the common questions of facts and law, all the three Revision Applications are heard and disposed of together.</p><p style="text-align: justify;">2. The following questions of law arising out of the order passed by the Orissa Sales Tax Tribunal on 8.12.1993 in Second Appeal Nos. 3345 to 3350 of 1991-92 have been referred to this Hon'ble High Court in terms of the order of this Hon'ble Court dated 24.2.1997. The questions are:</p><p style="text-align: justify;">(i) Whether on the facts and in the circumstances of the case, the Tribunal is right to held that tax is exigible for photographs as execution of works contract ?</p><p style="text-align: justify;">(ii) Whether on the facts and in the circumstances of the case, the conclusion of the Tribunal is perverse due to non-consideration and mis-consideration of facts and law and, therefore, it is liable to be set aside for re-hearing ?</p><p style="text-align: justify;">3. The materials facts out of which those questions arise are that the petitioner carries on the business of processing and developing photography. In the usual course of business, the petitioner takes photographs of persons or of family and then develops the negative by employing his skill and labour and then supplies the photographs to the clients. These photographs which are prepared by the petitioner are not commercial items because they are neither purchased nor sold. However, to develop these photographs employment of skill and labour is essential. It may be mentioned that petitioner does not carry on any sale of photographs of national leaders, God and Goddess.</p><p style="text-align: justify;">4. After the passing of 46th amendment of the Constitution of India and consequent amendments thereto in Orissa Sales Tax Act (OST Act), the Sales Tax Officer, Bhubaneswar-II Circle, Bhubaneswar sent notices to assess the petitioner as an unregistered dealer under Section 12 (5) of the OST Act, inter alia, contending that the petitioner's activities can be called 'works contract'. Pursuant to said notice, the petitioner gave its reply and appeared before the Sales Tax Officer and produced the books of account and documents including Receipts, Purchase Memos, Vouchers, Ledger and thereby denied its liability under the OST Act. The petitioner also submitted objection petitions on various dates i.e. 28.12.1985, 10.1.1986, 20.2.1986 and 29.2.1988 contending, inter alia, that the petitioner has no sales tax liability under OST Act and the notices, which were issued, are without jurisdiction.</p><p style="text-align: justify;">5. Ignoring the said objections of the petitioner, the Sales Tax Officer, Bhubaneswar-II Circle, Bhubaneswar assessed the petitioner as an unregistered dealer, inter alia, holding that the petitioner is liable to pay sales tax as petitioner has been alleged to carry activities of 'works contract'. Therefore, orders of assessment being dated 29.2.1988 for the years 1984-85 (9/84 to 3/85), 1985-86 and 1986- 87 under Section 12(5) of OST Act and under Rule 5 of the Orissa Additional Sales Tax Rules, 1975 were passed and a tax of Rs. 20,765.00 and penalty of Rs. 5,000.00 totalling to Rs. 25,765.00 was imposed on the petitioner. The petitioner then filed the First Appeal before the learned Assistant Commissioner of Sales Tax. The First Appellate Authority by an order dated 27.9.1991 confirmed the levy of tax under the OST Act, but reduced the penalty to Rs. 1250.00. Thereupon, the petitioner filed the Second Appeal before the Orissa Sales Tax Tribunal, Cuttack. The said Tribunal heard the Second Appeal and in course of hearing, the petitioner raised various contentions. Ultimately, the Tribunal upheld the levy of tax but deleted the penalty.</p><p style="text-align: justify;">6. Thereafter the petitioner came up with a reference application under Section 24(1) of the Orissa Sales Tax Act framing certain questions for being referred to the Hon'ble High Court. The said prayer of the petitioner was rejected by the Tribunal. Then the petitioner moved Hon'ble High Court under Section 24(2)(b) of the Orissa Sales Tax Act, 1947 whereupon the High Court directed the Tribunal to state to case and refer the questions under Section 24(3) of the OST Act for a decision of the High Court.</p><p style="text-align: justify;">7. Accordingly, the Tribunal stated the case and referred the aforesaid questions for a decision of the High Court.</p><p style="text-align: justify;">8. Learned Counsel for the petitioner before the High Court submitted that in the transaction in question, there is no contract of sale between the petitioner and the client. It is only a contract of service and the photographs, which the petitioner produced by supplying the same has no commercial value and are not marketable. So, there is no question of a works contract. It is the consistent stand of the petitioner that the present photographs which are produced by the petitioner have no utility or value to any other person than the customer. By developing such photographs, the petitioner only renders service to his customers. The customer pays for the service rendered by the petitioner. It is the contention of the petitioner that his activity is similar to that of consulting firm preparing plan and sketches pursuant to client's specification or professional giving opinion on papers. All those activities are done to serve the client. Therefore, this does not come within the purview of the definition of 'goods', 'sale', 'dealer' or 'works contract'. It is the petitioner's case that he purchased the goods, namely, papers on payment of sales tax. Further levy of tax on the personal service rendered to the client of the petitioner will amount to double taxation. It is also the contention of the petitioner that the paper which is used in the photography are incidental and insignificant.</p><p style="text-align: justify;">9. In support of its contention, learned Counsel for the petitioner has relied on several judgments. First reliance was place on the judgment of the Supreme Court in the case of Sales Tax Officer v. B.C. Kame reported in 39 STC 237(SC). At page 241 of the report, learned Judges of the Supreme Court held that a photographer takes the photograph and develops the negatives and does other photographic work and thereafter supplies the prints to his client. By doing so he cannot be said to enter into a contract for sale of goods. On the other hand, the contract is for use of skill and labour by the photographer to bring about the desired result. Learned Judges held that the job of a photographer is a contract for work and labour and it is not a contract of sale.</p><p style="text-align: justify;">10. Reliance was also placed on a judgment of this High Court in the case of Photo Emporium v. Addl. District Magistrate reported in 77 STC 199 in which this High Court followed the ratio of the judgment of the Supreme Court in the case of B.C. Kame. In that case, the stand of the Revenue was disapproved by the Orissa High Court.</p><p style="text-align: justify;">11. Similar view was taken in 110 STC 145 in the case of Foto Colour Labs Pvt. Ltd. v. Commercial Taxes Officer where the Tribunal held that the transfer of paper in the photograph is purely incidental and payment is only taken to give positive prints and not to get the photo papers. Therefore, the contract in between the petitioner and his client is not a contract of sale, and neither directly or indirectly works contract is involved in the supply of photo papers. Similar view was taken by the West Bengal Taxation Tribunal in the case of Studio Kamalalaya v. Commercial Tax Officer reported in 89 STC 307.</p><p style="text-align: justify;">12. In the case of Bavens v. Onion of India report in 97 STC 161, learned Judges held that when a photographer takes a photograph of his customer, he develops the negative and supplies positive prints in the desired size to the customer. In doing so the photographer uses his own camera and his own film. The negative belongs to the photographer and not to the customer. No basic goods are provided by the customer which are subjected to processing by the photographer so as to make the contract a works contract. There is no accretion to goods or property or the nucleus of a property which belongs to the customer. It is the skill of the photographer which is most important to get the desired result.</p><p style="text-align: justify;">13. Hon'ble Karnataka High Court followed the same principle in the case of Keshoram Surlndranath Photo-mag Pvt. Ltd. v. Assistant Commissioner of Commercial Taxes reported in 121 STC 175. In that judgment, learned Judges of the Karnataka High Court relied on the judgment of the Supreme Court in B.C. Kame's case and came to the conclusion that in the job of the photographer in supplying positive prints to his customer, no works contract is involved and photographs are not marketable or saleable commodity and as such no tax can be levied on it.</p><p style="text-align: justify;">14. Against the said judgment of the Karnataka High Court, the State of Karnataka High Court filed a S.L.P. before the Hon'ble Supreme Court bearing SLP Nos. 6136-6163 of 2000 and the Hon'ble Supreme Court dismissed the SLP on 20th April, 2000.</p><p style="text-align: justify;">15. In the case of Rainbow Colour Lab v. State of M.P. learned Judges of the Hon'ble Supreme Court reiterated its judgment in B.C. Kame's case and came to the following conclusion:</p><p style="text-align: justify;">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.</p><p style="text-align: justify;">Hon'ble Supreme Court in Bharat Sanchar Nigam Ltd. v. Union of India reported in 145 STC 91 again reiterated the principle in B.C. Kame's case and held that the work done by the photographer is only in the nature of a service contract not involving any sale of goods and held that the stand taken by the State cannot be sustained.</p><p style="text-align: justify;">16. Learned Counsel for the petitioner submitted that the photographs taken by the petitioner are not goods which can be sold and is not a marketable commodity like any other goods. When the copies of photographs are made out, they have no utility or value to any other person than the customer. It is already admitted that the papers utilized for photographs are tax paid goods. Therefore, it is contended by the learned Counsel for the petitioner that the work of photography does not come within the purview of works contract as defined in Section 2(jj) of the Orissa Sales Tax Act.</p><p style="text-align: justify;">17. Learned Counsel for the Revenue in this case virtually did not contest the submission made by the learned Counsel for the petitioner and in support of his contention, learned Counsel for the Revenue relied on a decision of the Supreme Court in the case of Imagic Creative Pvt. Ltd. v. Commissioner of Commercial Taxes and Ors. reported in (2008) 10 RC 236. In that judgment, learned Judges held that since the contract in question is a service contract, it is difficult to hold that in a case of this nature, sales tax would be payable on the value of the entire contract irrespective of the element of service provided.</p><p style="text-align: justify;">For the reasons discussed above, we answer the first question in the negative and the second question, in the affirmative. We thus answer both the questions in favour of the assessee and against the Revenue.</p><p style="text-align: justify;">The three revision applications are thus disposed of.</p><p style="text-align: justify;">No costs.</p><p style="text-align: justify;">B.N. Mahapatra, J.</p><p style="text-align: justify;">18. I agree.<p style="text-align: justify;"></p><p style="text-align: justify;">',
			'observations' => null,
			'overruledby' => null,
			'prhistory' => '',
			'pubs' => '106(2008)CLT317; 2008(I)OLR953; (2008)17VST289(Orissa)',
			'ratiodecidendi' => '',
			'respondent' => 'Commissioner of Sales Tax',
			'sub' => 'Sales Tax/VAT',
			'link' => null,
			'circuit' => null
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$title_for_layout = 'Studio Sujata Vs Commissioner of Sales Tax - Citation 531271 - Court Judgment | '
$desc = array(
	'Judgement' => array(
		'id' => '531271',
		'acts' => '',
		'appealno' => '',
		'appellant' => 'Studio Sujata',
		'authreffered' => '',
		'casename' => 'Studio Sujata Vs. Commissioner of Sales Tax',
		'casenote' => 'Sales Tax - Assessment - Contract of Sale - Section 12 (5) of Orissa Sales Tax 1947 - Petitioner carries on business of processing and developing photography - Revenue assessed petitioner under Section 12(5) of Act on ground that activities of petitioner can be called works contract - Petitioner approached to Assistant of Sales Tax on ground that there is no contract of sale between the petitioner and the client, it is only service - Dismissed and affirmed by Tribunal - Hence present petition - Whether Tribunal is right to held that tax is exigible for photographs as execution of works contract or not? - Held, as per precedent laid down by Supreme Court in case of Sales Tax Officer v. B.C. Kame that photographer takes photograph and develops negatives and does other photographic work and thereafter supplies prints to his client - By doing so he cannot be said to enter into contract for sale of goods - Therefore, job of photographer is contract for work and labour and it is not contract of sale - Revenue committed mistake in assessing petitioner under Section 12(5) of Act on basis of contract of sale - Petition disposed of accordingly  - STATE FINANCIAL CORPORATIONS ACT, 1951 [63/1951]. Section 29; [P.K. Tripathy, A.K. Parichha & N.Prusty, JJ] Discharge of loan  Orissa Forest Act (14 of 1972), Section 56  Confiscation of vehicle - Held, The Authorities under Section 56 of the Orissa Forest Act, 1972 are not obliged to release the vehicle from the confiscation proceeding or to pay the sale proceeds of the vehicle after the order of confiscation in favour of Orissa State Financial Corporation when such vehicles were purchased on being financed by the Orissa State Financial Corporation and the loan had not been liquidated by the date of the seizure/confiscation of the vehicle. Concept of first charge or second charge has no applicability when the vehicle is not otherwise disposed of to determine the liabilities of the loanee. On the other hand the vehicle having been found indulged in forest offences was made subject matter of a confiscation proceedings, and therefore, the procedure followed for confiscation of the vehicle and for its sale is punitive in nature and not with a view to give benefit to anybody including the Department which initiated the confiscation proceeding. Apart from that, the claim of the Orissa State Financial Corporation as against its loanee (who had taken the vehicle on hire- purchase agreement) brings the loanee and the sureties within the default clause under the State Financial Corporation Act, 1951 or the heirs and successors of such persons. Procedure is provided in the Act, 1951 and the Rules thereof about the manner in which such loan is to be recovered, and in that context only the vehicle under the hire-purchase agreement is placed as the first charge. If such property is not available for any reason, then the loan is not automatically waived or the loanee and his sureties are not automatically redeemed of the liabilities to repay. The Financial Corporation is concerned with repayment of loan either from the property or persons offered as surety. Thus, a vehicle, which is subject matter of confiscation proceeding under the Act, 1872, being not available to the Orissa State Financial Corporation for adjustment of the unpaid loan, that does not at all bring out an anomalous situation so as to defeat the right of the Orissa State Financial Corporation. Agreement between the Orissa State Financial Corporation and the loanee is a pure and simple contract governed by the provisions of the Contract Act, 1872 read with the provisions in the Act, 1951 and its Rules. On the other hand, a confiscation proceeding under the Act, 1972 is punitive in nature for commission of a forest offence. Thus, by virtue of the provision in Section 56 read with Section 64 (2) of the Act, 1972, the action taken for confiscation of the vehicle cannot be extended to grant protection of the loan advanced by Orissa State Financial Corporation. By doing that it amounts to grant premium to the pick-pockets in as much as, by making payment of the confiscation amount in favour of the Orissa State Financial Corporation the loan burden of the accused of the forest offence is reduced to the extent of the sale proceeds of the vehicle. In other words, on payment of the sale proceeds of the confiscation proceeding to the Orissa State Financial Corporation towards discharge of the loan account of the accused of a forest offence, it would lead to a system to reward him by repayment of his loan. Then it does not become a penalty nor the action become punitive, but it remains as a reward to the accused of forest offence. Such a concept is totally not conceivable from any provision in the Act, 1972 or the Act, 1951. [AIR 2002 Orissa 130 Overruled]. -- STATE FINANCIAL CORPORATIONS ACT, 1951. 
Section 29; Discharge of loan  Orissa Forest Act (14 of 1972), Section 56  Confiscation of vehicle - Held, The Authorities under Section 56 of the Orissa Forest Act, 1972 are not obliged to release the vehicle from the confiscation proceeding or to pay the sale proceeds of the vehicle after the order of confiscation in favour of Orissa State Financial Corporation when such vehicles were purchased on being financed by the Orissa State Financial Corporation and the loan had not been liquidated by the date of the seizure/confiscation of the vehicle. Concept of first charge or second charge has no applicability when the vehicle is not otherwise disposed of to determine the liabilities of the loanee. On the other hand the vehicle having been found indulged in forest offences was made subject matter of a confiscation proceedings, and therefore, the procedure followed for confiscation of the vehicle and for its sale is punitive in nature and not with a view to give benefit to anybody including the Department which initiated the confiscation proceeding. Apart from that, the claim of the Orissa State Financial Corporation as against its loanee (who had taken the vehicle on hire- purchase agreement) brings the loanee and the sureties within the default clause under the State Financial Corporation Act, 1951 or the heirs and successors of such persons. Procedure is provided in the Act, 1951 and the Rules thereof about the manner in which such loan is to be recovered, and in that context only the vehicle under the hire-purchase agreement is placed as the first charge. If such property is not available for any reason, then the loan is not automatically waived or the loanee and his sureties are not automatically redeemed of the liabilities to repay. The Financial Corporation is concerned with repayment of loan either from the property or persons offered as surety. Thus, a vehicle, which is subject matter of confiscation proceeding under the Act, 1872, being not available to the Orissa State Financial Corporation for adjustment of the unpaid loan, that does not at all bring out an anomalous situation so as to defeat the right of the Orissa State Financial Corporation. Agreement between the Orissa State Financial Corporation and the loanee is a pure and simple contract governed by the provisions of the Contract Act, 1872 read with the provisions in the Act, 1951 and its Rules. On the other hand, a confiscation proceeding under the Act, 1972 is punitive in nature for commission of a forest offence. Thus, by virtue of the provision in Section 56 read with Section 64 (2) of the Act, 1972, the action taken for confiscation of the vehicle cannot be extended to grant protection of the loan advanced by Orissa State Financial Corporation. By doing that it amounts to grant premium to the pick-pockets in as much as, by making payment of the confiscation amount in favour of the Orissa State Financial Corporation the loan burden of the accused of the forest offence is reduced to the extent of the sale proceeds of the vehicle. In other words, on payment of the sale proceeds of the confiscation proceeding to the Orissa State Financial Corporation towards discharge of the loan account of the accused of a forest offence, it would lead to a system to reward him by repayment of his loan. Then it does not become a penalty nor the action become punitive, but it remains as a reward to the accused of forest offence. Such a concept is totally not conceivable from any provision in the Act, 1972 or the Act, 1951. [AIR 2002 Orissa 130 Overruled].  -  In that case, the stand of the Revenue was disapproved by the Orissa High Court. 16. Learned Counsel for the petitioner submitted that the photographs taken by the petitioner are not goods which can be sold and is not a marketable commodity like any other goods.',
		'caseanalysis' => null,
		'casesref' => 'Imagic Creative Pvt. Ltd. v. Commissioner of Commercial Taxes and Ors.;',
		'citingcases' => '',
		'counselplain' => '',
		'counseldef' => '',
		'court' => 'Orissa',
		'court_type' => 'HC',
		'decidedon' => '2008-04-02',
		'deposition' => '',
		'favorof' => null,
		'findings' => null,
		'judge' => ' A.K. Ganguly, C.J. and; B.N. Mahapatra, J.',
		'judgement' => '<p>A.K. Ganguly, C.J.</p><p>1. Initially three S.J.Cs. being S.J.C. Nos. 10 of 1997, 8 of 1997 and 9 of 1997 were filed and subsequently renumbered as STREV Nos. 212, 214 and 216 of 2007 respectively. In view of the common questions of facts and law, all the three Revision Applications are heard and disposed of together.</p><p>2. The following questions of law arising out of the order passed by the Orissa Sales Tax Tribunal on 8.12.1993 in Second Appeal Nos. 3345 to 3350 of 1991-92 have been referred to this Hon'ble High Court in terms of the order of this Hon'ble Court dated 24.2.1997. The questions are:</p><p>(i) Whether on the facts and in the circumstances of the case, the Tribunal is right to held that tax is exigible for photographs as execution of works contract ?</p><p>(ii) Whether on the facts and in the circumstances of the case, the conclusion of the Tribunal is perverse due to non-consideration and mis-consideration of facts and law and, therefore, it is liable to be set aside for re-hearing ?</p><p>3. The materials facts out of which those questions arise are that the petitioner carries on the business of processing and developing photography. In the usual course of business, the petitioner takes photographs of persons or of family and then develops the negative by employing his skill and labour and then supplies the photographs to the clients. These photographs which are prepared by the petitioner are not commercial items because they are neither purchased nor sold. However, to develop these photographs employment of skill and labour is essential. It may be mentioned that petitioner does not carry on any sale of photographs of national leaders, God and Goddess.</p><p>4. After the passing of 46th amendment of the Constitution of India and consequent amendments thereto in Orissa Sales Tax Act (OST Act), the Sales Tax Officer, Bhubaneswar-II Circle, Bhubaneswar sent notices to assess the petitioner as an unregistered dealer under Section 12 (5) of the OST Act, inter alia, contending that the petitioner's activities can be called 'works contract'. Pursuant to said notice, the petitioner gave its reply and appeared before the Sales Tax Officer and produced the books of account and documents including Receipts, Purchase Memos, Vouchers, Ledger and thereby denied its liability under the OST Act. The petitioner also submitted objection petitions on various dates i.e. 28.12.1985, 10.1.1986, 20.2.1986 and 29.2.1988 contending, inter alia, that the petitioner has no sales tax liability under OST Act and the notices, which were issued, are without jurisdiction.</p><p>5. Ignoring the said objections of the petitioner, the Sales Tax Officer, Bhubaneswar-II Circle, Bhubaneswar assessed the petitioner as an unregistered dealer, inter alia, holding that the petitioner is liable to pay sales tax as petitioner has been alleged to carry activities of 'works contract'. Therefore, orders of assessment being dated 29.2.1988 for the years 1984-85 (9/84 to 3/85), 1985-86 and 1986- 87 under Section 12(5) of OST Act and under Rule 5 of the Orissa Additional Sales Tax Rules, 1975 were passed and a tax of Rs. 20,765.00 and penalty of Rs. 5,000.00 totalling to Rs. 25,765.00 was imposed on the petitioner. The petitioner then filed the First Appeal before the learned Assistant Commissioner of Sales Tax. The First Appellate Authority by an order dated 27.9.1991 confirmed the levy of tax under the OST Act, but reduced the penalty to Rs. 1250.00. Thereupon, the petitioner filed the Second Appeal before the Orissa Sales Tax Tribunal, Cuttack. The said Tribunal heard the Second Appeal and in course of hearing, the petitioner raised various contentions. Ultimately, the Tribunal upheld the levy of tax but deleted the penalty.</p><p>6. Thereafter the petitioner came up with a reference application under Section 24(1) of the Orissa Sales Tax Act framing certain questions for being referred to the Hon'ble High Court. The said prayer of the petitioner was rejected by the Tribunal. Then the petitioner moved Hon'ble High Court under Section 24(2)(b) of the Orissa Sales Tax Act, 1947 whereupon the High Court directed the Tribunal to state to case and refer the questions under Section 24(3) of the OST Act for a decision of the High Court.</p><p>7. Accordingly, the Tribunal stated the case and referred the aforesaid questions for a decision of the High Court.</p><p>8. Learned Counsel for the petitioner before the High Court submitted that in the transaction in question, there is no contract of sale between the petitioner and the client. It is only a contract of service and the photographs, which the petitioner produced by supplying the same has no commercial value and are not marketable. So, there is no question of a works contract. It is the consistent stand of the petitioner that the present photographs which are produced by the petitioner have no utility or value to any other person than the customer. By developing such photographs, the petitioner only renders service to his customers. The customer pays for the service rendered by the petitioner. It is the contention of the petitioner that his activity is similar to that of consulting firm preparing plan and sketches pursuant to client's specification or professional giving opinion on papers. All those activities are done to serve the client. Therefore, this does not come within the purview of the definition of 'goods', 'sale', 'dealer' or 'works contract'. It is the petitioner's case that he purchased the goods, namely, papers on payment of sales tax. Further levy of tax on the personal service rendered to the client of the petitioner will amount to double taxation. It is also the contention of the petitioner that the paper which is used in the photography are incidental and insignificant.</p><p>9. In support of its contention, learned Counsel for the petitioner has relied on several judgments. First reliance was place on the judgment of the Supreme Court in the case of Sales Tax Officer v. B.C. Kame reported in 39 STC 237(SC). At page 241 of the report, learned Judges of the Supreme Court held that a photographer takes the photograph and develops the negatives and does other photographic work and thereafter supplies the prints to his client. By doing so he cannot be said to enter into a contract for sale of goods. On the other hand, the contract is for use of skill and labour by the photographer to bring about the desired result. Learned Judges held that the job of a photographer is a contract for work and labour and it is not a contract of sale.</p><p>10. Reliance was also placed on a judgment of this High Court in the case of Photo Emporium v. Addl. District Magistrate reported in 77 STC 199 in which this High Court followed the ratio of the judgment of the Supreme Court in the case of B.C. Kame. In that case, the stand of the Revenue was disapproved by the Orissa High Court.</p><p>11. Similar view was taken in 110 STC 145 in the case of Foto Colour Labs Pvt. Ltd. v. Commercial Taxes Officer where the Tribunal held that the transfer of paper in the photograph is purely incidental and payment is only taken to give positive prints and not to get the photo papers. Therefore, the contract in between the petitioner and his client is not a contract of sale, and neither directly or indirectly works contract is involved in the supply of photo papers. Similar view was taken by the West Bengal Taxation Tribunal in the case of Studio Kamalalaya v. Commercial Tax Officer reported in 89 STC 307.</p><p>12. In the case of Bavens v. Onion of India report in 97 STC 161, learned Judges held that when a photographer takes a photograph of his customer, he develops the negative and supplies positive prints in the desired size to the customer. In doing so the photographer uses his own camera and his own film. The negative belongs to the photographer and not to the customer. No basic goods are provided by the customer which are subjected to processing by the photographer so as to make the contract a works contract. There is no accretion to goods or property or the nucleus of a property which belongs to the customer. It is the skill of the photographer which is most important to get the desired result.</p><p>13. Hon'ble Karnataka High Court followed the same principle in the case of Keshoram Surlndranath Photo-mag Pvt. Ltd. v. Assistant Commissioner of Commercial Taxes reported in 121 STC 175. In that judgment, learned Judges of the Karnataka High Court relied on the judgment of the Supreme Court in B.C. Kame's case and came to the conclusion that in the job of the photographer in supplying positive prints to his customer, no works contract is involved and photographs are not marketable or saleable commodity and as such no tax can be levied on it.</p><p>14. Against the said judgment of the Karnataka High Court, the State of Karnataka High Court filed a S.L.P. before the Hon'ble Supreme Court bearing SLP Nos. 6136-6163 of 2000 and the Hon'ble Supreme Court dismissed the SLP on 20th April, 2000.</p><p>15. In the case of Rainbow Colour Lab v. State of M.P. learned Judges of the Hon'ble Supreme Court reiterated its judgment in B.C. Kame's case and came to the following conclusion:</p><p>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.</p><p>Hon'ble Supreme Court in Bharat Sanchar Nigam Ltd. v. Union of India reported in 145 STC 91 again reiterated the principle in B.C. Kame's case and held that the work done by the photographer is only in the nature of a service contract not involving any sale of goods and held that the stand taken by the State cannot be sustained.</p><p>16. Learned Counsel for the petitioner submitted that the photographs taken by the petitioner are not goods which can be sold and is not a marketable commodity like any other goods. When the copies of photographs are made out, they have no utility or value to any other person than the customer. It is already admitted that the papers utilized for photographs are tax paid goods. Therefore, it is contended by the learned Counsel for the petitioner that the work of photography does not come within the purview of works contract as defined in Section 2(jj) of the Orissa Sales Tax Act.</p><p>17. Learned Counsel for the Revenue in this case virtually did not contest the submission made by the learned Counsel for the petitioner and in support of his contention, learned Counsel for the Revenue relied on a decision of the Supreme Court in the case of Imagic Creative Pvt. Ltd. v. Commissioner of Commercial Taxes and Ors. reported in (2008) 10 RC 236. In that judgment, learned Judges held that since the contract in question is a service contract, it is difficult to hold that in a case of this nature, sales tax would be payable on the value of the entire contract irrespective of the element of service provided.</p><p>For the reasons discussed above, we answer the first question in the negative and the second question, in the affirmative. We thus answer both the questions in favour of the assessee and against the Revenue.</p><p>The three revision applications are thus disposed of.</p><p>No costs.</p><p>B.N. Mahapatra, J.</p><p>18. I agree.<p></p><p>',
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	(int) 0 => '<p>A.K. Ganguly, C.J.',
	(int) 1 => '<p>1. Initially three S.J.Cs. being S.J.C. Nos. 10 of 1997, 8 of 1997 and 9 of 1997 were filed and subsequently renumbered as STREV Nos. 212, 214 and 216 of 2007 respectively. In view of the common questions of facts and law, all the three Revision Applications are heard and disposed of together.',
	(int) 2 => '<p>2. The following questions of law arising out of the order passed by the Orissa Sales Tax Tribunal on 8.12.1993 in Second Appeal Nos. 3345 to 3350 of 1991-92 have been referred to this Hon'ble High Court in terms of the order of this Hon'ble Court dated 24.2.1997. The questions are:',
	(int) 3 => '<p>(i) Whether on the facts and in the circumstances of the case, the Tribunal is right to held that tax is exigible for photographs as execution of works contract ?',
	(int) 4 => '<p>(ii) Whether on the facts and in the circumstances of the case, the conclusion of the Tribunal is perverse due to non-consideration and mis-consideration of facts and law and, therefore, it is liable to be set aside for re-hearing ?',
	(int) 5 => '<p>3. The materials facts out of which those questions arise are that the petitioner carries on the business of processing and developing photography. In the usual course of business, the petitioner takes photographs of persons or of family and then develops the negative by employing his skill and labour and then supplies the photographs to the clients. These photographs which are prepared by the petitioner are not commercial items because they are neither purchased nor sold. However, to develop these photographs employment of skill and labour is essential. It may be mentioned that petitioner does not carry on any sale of photographs of national leaders, God and Goddess.',
	(int) 6 => '<p>4. After the passing of 46th amendment of the Constitution of India and consequent amendments thereto in Orissa Sales Tax Act (OST Act), the Sales Tax Officer, Bhubaneswar-II Circle, Bhubaneswar sent notices to assess the petitioner as an unregistered dealer under Section 12 (5) of the OST Act, inter alia, contending that the petitioner's activities can be called 'works contract'. Pursuant to said notice, the petitioner gave its reply and appeared before the Sales Tax Officer and produced the books of account and documents including Receipts, Purchase Memos, Vouchers, Ledger and thereby denied its liability under the OST Act. The petitioner also submitted objection petitions on various dates i.e. 28.12.1985, 10.1.1986, 20.2.1986 and 29.2.1988 contending, inter alia, that the petitioner has no sales tax liability under OST Act and the notices, which were issued, are without jurisdiction.',
	(int) 7 => '<p>5. Ignoring the said objections of the petitioner, the Sales Tax Officer, Bhubaneswar-II Circle, Bhubaneswar assessed the petitioner as an unregistered dealer, inter alia, holding that the petitioner is liable to pay sales tax as petitioner has been alleged to carry activities of 'works contract'. Therefore, orders of assessment being dated 29.2.1988 for the years 1984-85 (9/84 to 3/85), 1985-86 and 1986- 87 under Section 12(5) of OST Act and under Rule 5 of the Orissa Additional Sales Tax Rules, 1975 were passed and a tax of Rs. 20,765.00 and penalty of Rs. 5,000.00 totalling to Rs. 25,765.00 was imposed on the petitioner. The petitioner then filed the First Appeal before the learned Assistant Commissioner of Sales Tax. The First Appellate Authority by an order dated 27.9.1991 confirmed the levy of tax under the OST Act, but reduced the penalty to Rs. 1250.00. Thereupon, the petitioner filed the Second Appeal before the Orissa Sales Tax Tribunal, Cuttack. The said Tribunal heard the Second Appeal and in course of hearing, the petitioner raised various contentions. Ultimately, the Tribunal upheld the levy of tax but deleted the penalty.',
	(int) 8 => '<p>6. Thereafter the petitioner came up with a reference application under Section 24(1) of the Orissa Sales Tax Act framing certain questions for being referred to the Hon'ble High Court. The said prayer of the petitioner was rejected by the Tribunal. Then the petitioner moved Hon'ble High Court under Section 24(2)(b) of the Orissa Sales Tax Act, 1947 whereupon the High Court directed the Tribunal to state to case and refer the questions under Section 24(3) of the OST Act for a decision of the High Court.',
	(int) 9 => '<p>7. Accordingly, the Tribunal stated the case and referred the aforesaid questions for a decision of the High Court.',
	(int) 10 => '<p>8. Learned Counsel for the petitioner before the High Court submitted that in the transaction in question, there is no contract of sale between the petitioner and the client. It is only a contract of service and the photographs, which the petitioner produced by supplying the same has no commercial value and are not marketable. So, there is no question of a works contract. It is the consistent stand of the petitioner that the present photographs which are produced by the petitioner have no utility or value to any other person than the customer. By developing such photographs, the petitioner only renders service to his customers. The customer pays for the service rendered by the petitioner. It is the contention of the petitioner that his activity is similar to that of consulting firm preparing plan and sketches pursuant to client's specification or professional giving opinion on papers. All those activities are done to serve the client. Therefore, this does not come within the purview of the definition of 'goods', 'sale', 'dealer' or 'works contract'. It is the petitioner's case that he purchased the goods, namely, papers on payment of sales tax. Further levy of tax on the personal service rendered to the client of the petitioner will amount to double taxation. It is also the contention of the petitioner that the paper which is used in the photography are incidental and insignificant.',
	(int) 11 => '<p>9. In support of its contention, learned Counsel for the petitioner has relied on several judgments. First reliance was place on the judgment of the Supreme Court in the case of Sales Tax Officer v. B.C. Kame reported in 39 STC 237(SC). At page 241 of the report, learned Judges of the Supreme Court held that a photographer takes the photograph and develops the negatives and does other photographic work and thereafter supplies the prints to his client. By doing so he cannot be said to enter into a contract for sale of goods. On the other hand, the contract is for use of skill and labour by the photographer to bring about the desired result. Learned Judges held that the job of a photographer is a contract for work and labour and it is not a contract of sale.',
	(int) 12 => '<p>10. Reliance was also placed on a judgment of this High Court in the case of Photo Emporium v. Addl. District Magistrate reported in 77 STC 199 in which this High Court followed the ratio of the judgment of the Supreme Court in the case of B.C. Kame. In that case, the stand of the Revenue was disapproved by the Orissa High Court.',
	(int) 13 => '<p>11. Similar view was taken in 110 STC 145 in the case of Foto Colour Labs Pvt. Ltd. v. Commercial Taxes Officer where the Tribunal held that the transfer of paper in the photograph is purely incidental and payment is only taken to give positive prints and not to get the photo papers. Therefore, the contract in between the petitioner and his client is not a contract of sale, and neither directly or indirectly works contract is involved in the supply of photo papers. Similar view was taken by the West Bengal Taxation Tribunal in the case of Studio Kamalalaya v. Commercial Tax Officer reported in 89 STC 307.',
	(int) 14 => '<p>12. In the case of Bavens v. Onion of India report in 97 STC 161, learned Judges held that when a photographer takes a photograph of his customer, he develops the negative and supplies positive prints in the desired size to the customer. In doing so the photographer uses his own camera and his own film. The negative belongs to the photographer and not to the customer. No basic goods are provided by the customer which are subjected to processing by the photographer so as to make the contract a works contract. There is no accretion to goods or property or the nucleus of a property which belongs to the customer. It is the skill of the photographer which is most important to get the desired result.',
	(int) 15 => '<p>13. Hon'ble Karnataka High Court followed the same principle in the case of Keshoram Surlndranath Photo-mag Pvt. Ltd. v. Assistant Commissioner of Commercial Taxes reported in 121 STC 175. In that judgment, learned Judges of the Karnataka High Court relied on the judgment of the Supreme Court in B.C. Kame's case and came to the conclusion that in the job of the photographer in supplying positive prints to his customer, no works contract is involved and photographs are not marketable or saleable commodity and as such no tax can be levied on it.',
	(int) 16 => '<p>14. Against the said judgment of the Karnataka High Court, the State of Karnataka High Court filed a S.L.P. before the Hon'ble Supreme Court bearing SLP Nos. 6136-6163 of 2000 and the Hon'ble Supreme Court dismissed the SLP on 20th April, 2000.',
	(int) 17 => '<p>15. In the case of Rainbow Colour Lab v. State of M.P. learned Judges of the Hon'ble Supreme Court reiterated its judgment in B.C. Kame's case and came to the following conclusion:',
	(int) 18 => '<p>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.',
	(int) 19 => '<p>Hon'ble Supreme Court in Bharat Sanchar Nigam Ltd. v. Union of India reported in 145 STC 91 again reiterated the principle in B.C. Kame's case and held that the work done by the photographer is only in the nature of a service contract not involving any sale of goods and held that the stand taken by the State cannot be sustained.',
	(int) 20 => '<p>16. Learned Counsel for the petitioner submitted that the photographs taken by the petitioner are not goods which can be sold and is not a marketable commodity like any other goods. When the copies of photographs are made out, they have no utility or value to any other person than the customer. It is already admitted that the papers utilized for photographs are tax paid goods. Therefore, it is contended by the learned Counsel for the petitioner that the work of photography does not come within the purview of works contract as defined in Section 2(jj) of the Orissa Sales Tax Act.',
	(int) 21 => '<p>17. Learned Counsel for the Revenue in this case virtually did not contest the submission made by the learned Counsel for the petitioner and in support of his contention, learned Counsel for the Revenue relied on a decision of the Supreme Court in the case of Imagic Creative Pvt. Ltd. v. Commissioner of Commercial Taxes and Ors. reported in (2008) 10 RC 236. In that judgment, learned Judges held that since the contract in question is a service contract, it is difficult to hold that in a case of this nature, sales tax would be payable on the value of the entire contract irrespective of the element of service provided.',
	(int) 22 => '<p>For the reasons discussed above, we answer the first question in the negative and the second question, in the affirmative. We thus answer both the questions in favour of the assessee and against the Revenue.',
	(int) 23 => '<p>The three revision applications are thus disposed of.',
	(int) 24 => '<p>No costs.',
	(int) 25 => '<p>B.N. Mahapatra, J.',
	(int) 26 => '<p>18. I agree.<p>',
	(int) 27 => '<p>'
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8. Learned Counsel for the petitioner before the High Court submitted that in the transaction in question, there is no contract of sale between the petitioner and the client. It is only a contract of service and the photographs, which the petitioner produced by supplying the same has no commercial value and are not marketable. So, there is no question of a works contract. It is the consistent stand of the petitioner that the present photographs which are produced by the petitioner have no utility or value to any other person than the customer. By developing such photographs, the petitioner only renders service to his customers. The customer pays for the service rendered by the petitioner. It is the contention of the petitioner that his activity is similar to that of consulting firm preparing plan and sketches pursuant to client's specification or professional giving opinion on papers. All those activities are done to serve the client. Therefore, this does not come within the purview of the definition of 'goods', 'sale', 'dealer' or 'works contract'. It is the petitioner's case that he purchased the goods, namely, papers on payment of sales tax. Further levy of tax on the personal service rendered to the client of the petitioner will amount to double taxation. It is also the contention of the petitioner that the paper which is used in the photography are incidental and insignificant.

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	'title_for_layout' => 'Studio Sujata Vs Commissioner of Sales Tax - Citation 531271 - Court Judgment | ',
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		'Judgement' => array(
			'id' => '531271',
			'acts' => '',
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			'appellant' => 'Studio Sujata',
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			'casename' => 'Studio Sujata Vs. Commissioner of Sales Tax',
			'casenote' => 'Sales Tax - Assessment - Contract of Sale - Section 12 (5) of Orissa Sales Tax 1947 - Petitioner carries on business of processing and developing photography - Revenue assessed petitioner under Section 12(5) of Act on ground that activities of petitioner can be called works contract - Petitioner approached to Assistant of Sales Tax on ground that there is no contract of sale between the petitioner and the client, it is only service - Dismissed and affirmed by Tribunal - Hence present petition - Whether Tribunal is right to held that tax is exigible for photographs as execution of works contract or not? - Held, as per precedent laid down by Supreme Court in case of Sales Tax Officer v. B.C. Kame that photographer takes photograph and develops negatives and does other photographic work and thereafter supplies prints to his client - By doing so he cannot be said to enter into contract for sale of goods - Therefore, job of photographer is contract for work and labour and it is not contract of sale - Revenue committed mistake in assessing petitioner under Section 12(5) of Act on basis of contract of sale - Petition disposed of accordingly  - STATE FINANCIAL CORPORATIONS ACT, 1951 [63/1951]. Section 29; [P.K. Tripathy, A.K. Parichha & N.Prusty, JJ] Discharge of loan  Orissa Forest Act (14 of 1972), Section 56  Confiscation of vehicle - Held, The Authorities under Section 56 of the Orissa Forest Act, 1972 are not obliged to release the vehicle from the confiscation proceeding or to pay the sale proceeds of the vehicle after the order of confiscation in favour of Orissa State Financial Corporation when such vehicles were purchased on being financed by the Orissa State Financial Corporation and the loan had not been liquidated by the date of the seizure/confiscation of the vehicle. Concept of first charge or second charge has no applicability when the vehicle is not otherwise disposed of to determine the liabilities of the loanee. On the other hand the vehicle having been found indulged in forest offences was made subject matter of a confiscation proceedings, and therefore, the procedure followed for confiscation of the vehicle and for its sale is punitive in nature and not with a view to give benefit to anybody including the Department which initiated the confiscation proceeding. Apart from that, the claim of the Orissa State Financial Corporation as against its loanee (who had taken the vehicle on hire- purchase agreement) brings the loanee and the sureties within the default clause under the State Financial Corporation Act, 1951 or the heirs and successors of such persons. Procedure is provided in the Act, 1951 and the Rules thereof about the manner in which such loan is to be recovered, and in that context only the vehicle under the hire-purchase agreement is placed as the first charge. If such property is not available for any reason, then the loan is not automatically waived or the loanee and his sureties are not automatically redeemed of the liabilities to repay. The Financial Corporation is concerned with repayment of loan either from the property or persons offered as surety. Thus, a vehicle, which is subject matter of confiscation proceeding under the Act, 1872, being not available to the Orissa State Financial Corporation for adjustment of the unpaid loan, that does not at all bring out an anomalous situation so as to defeat the right of the Orissa State Financial Corporation. Agreement between the Orissa State Financial Corporation and the loanee is a pure and simple contract governed by the provisions of the Contract Act, 1872 read with the provisions in the Act, 1951 and its Rules. On the other hand, a confiscation proceeding under the Act, 1972 is punitive in nature for commission of a forest offence. Thus, by virtue of the provision in Section 56 read with Section 64 (2) of the Act, 1972, the action taken for confiscation of the vehicle cannot be extended to grant protection of the loan advanced by Orissa State Financial Corporation. By doing that it amounts to grant premium to the pick-pockets in as much as, by making payment of the confiscation amount in favour of the Orissa State Financial Corporation the loan burden of the accused of the forest offence is reduced to the extent of the sale proceeds of the vehicle. In other words, on payment of the sale proceeds of the confiscation proceeding to the Orissa State Financial Corporation towards discharge of the loan account of the accused of a forest offence, it would lead to a system to reward him by repayment of his loan. Then it does not become a penalty nor the action become punitive, but it remains as a reward to the accused of forest offence. Such a concept is totally not conceivable from any provision in the Act, 1972 or the Act, 1951. [AIR 2002 Orissa 130 Overruled]. -- STATE FINANCIAL CORPORATIONS ACT, 1951. 
Section 29; Discharge of loan  Orissa Forest Act (14 of 1972), Section 56  Confiscation of vehicle - Held, The Authorities under Section 56 of the Orissa Forest Act, 1972 are not obliged to release the vehicle from the confiscation proceeding or to pay the sale proceeds of the vehicle after the order of confiscation in favour of Orissa State Financial Corporation when such vehicles were purchased on being financed by the Orissa State Financial Corporation and the loan had not been liquidated by the date of the seizure/confiscation of the vehicle. Concept of first charge or second charge has no applicability when the vehicle is not otherwise disposed of to determine the liabilities of the loanee. On the other hand the vehicle having been found indulged in forest offences was made subject matter of a confiscation proceedings, and therefore, the procedure followed for confiscation of the vehicle and for its sale is punitive in nature and not with a view to give benefit to anybody including the Department which initiated the confiscation proceeding. Apart from that, the claim of the Orissa State Financial Corporation as against its loanee (who had taken the vehicle on hire- purchase agreement) brings the loanee and the sureties within the default clause under the State Financial Corporation Act, 1951 or the heirs and successors of such persons. Procedure is provided in the Act, 1951 and the Rules thereof about the manner in which such loan is to be recovered, and in that context only the vehicle under the hire-purchase agreement is placed as the first charge. If such property is not available for any reason, then the loan is not automatically waived or the loanee and his sureties are not automatically redeemed of the liabilities to repay. The Financial Corporation is concerned with repayment of loan either from the property or persons offered as surety. Thus, a vehicle, which is subject matter of confiscation proceeding under the Act, 1872, being not available to the Orissa State Financial Corporation for adjustment of the unpaid loan, that does not at all bring out an anomalous situation so as to defeat the right of the Orissa State Financial Corporation. Agreement between the Orissa State Financial Corporation and the loanee is a pure and simple contract governed by the provisions of the Contract Act, 1872 read with the provisions in the Act, 1951 and its Rules. On the other hand, a confiscation proceeding under the Act, 1972 is punitive in nature for commission of a forest offence. Thus, by virtue of the provision in Section 56 read with Section 64 (2) of the Act, 1972, the action taken for confiscation of the vehicle cannot be extended to grant protection of the loan advanced by Orissa State Financial Corporation. By doing that it amounts to grant premium to the pick-pockets in as much as, by making payment of the confiscation amount in favour of the Orissa State Financial Corporation the loan burden of the accused of the forest offence is reduced to the extent of the sale proceeds of the vehicle. In other words, on payment of the sale proceeds of the confiscation proceeding to the Orissa State Financial Corporation towards discharge of the loan account of the accused of a forest offence, it would lead to a system to reward him by repayment of his loan. Then it does not become a penalty nor the action become punitive, but it remains as a reward to the accused of forest offence. Such a concept is totally not conceivable from any provision in the Act, 1972 or the Act, 1951. [AIR 2002 Orissa 130 Overruled].  -  In that case, the stand of the Revenue was disapproved by the Orissa High Court. 16. Learned Counsel for the petitioner submitted that the photographs taken by the petitioner are not goods which can be sold and is not a marketable commodity like any other goods.',
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			'judge' => ' A.K. Ganguly, C.J. and; B.N. Mahapatra, J.',
			'judgement' => '<p style="text-align: justify;">A.K. Ganguly, C.J.</p><p style="text-align: justify;">1. Initially three S.J.Cs. being S.J.C. Nos. 10 of 1997, 8 of 1997 and 9 of 1997 were filed and subsequently renumbered as STREV Nos. 212, 214 and 216 of 2007 respectively. In view of the common questions of facts and law, all the three Revision Applications are heard and disposed of together.</p><p style="text-align: justify;">2. The following questions of law arising out of the order passed by the Orissa Sales Tax Tribunal on 8.12.1993 in Second Appeal Nos. 3345 to 3350 of 1991-92 have been referred to this Hon'ble High Court in terms of the order of this Hon'ble Court dated 24.2.1997. The questions are:</p><p style="text-align: justify;">(i) Whether on the facts and in the circumstances of the case, the Tribunal is right to held that tax is exigible for photographs as execution of works contract ?</p><p style="text-align: justify;">(ii) Whether on the facts and in the circumstances of the case, the conclusion of the Tribunal is perverse due to non-consideration and mis-consideration of facts and law and, therefore, it is liable to be set aside for re-hearing ?</p><p style="text-align: justify;">3. The materials facts out of which those questions arise are that the petitioner carries on the business of processing and developing photography. In the usual course of business, the petitioner takes photographs of persons or of family and then develops the negative by employing his skill and labour and then supplies the photographs to the clients. These photographs which are prepared by the petitioner are not commercial items because they are neither purchased nor sold. However, to develop these photographs employment of skill and labour is essential. It may be mentioned that petitioner does not carry on any sale of photographs of national leaders, God and Goddess.</p><p style="text-align: justify;">4. After the passing of 46th amendment of the Constitution of India and consequent amendments thereto in Orissa Sales Tax Act (OST Act), the Sales Tax Officer, Bhubaneswar-II Circle, Bhubaneswar sent notices to assess the petitioner as an unregistered dealer under Section 12 (5) of the OST Act, inter alia, contending that the petitioner's activities can be called 'works contract'. Pursuant to said notice, the petitioner gave its reply and appeared before the Sales Tax Officer and produced the books of account and documents including Receipts, Purchase Memos, Vouchers, Ledger and thereby denied its liability under the OST Act. The petitioner also submitted objection petitions on various dates i.e. 28.12.1985, 10.1.1986, 20.2.1986 and 29.2.1988 contending, inter alia, that the petitioner has no sales tax liability under OST Act and the notices, which were issued, are without jurisdiction.</p><p style="text-align: justify;">5. Ignoring the said objections of the petitioner, the Sales Tax Officer, Bhubaneswar-II Circle, Bhubaneswar assessed the petitioner as an unregistered dealer, inter alia, holding that the petitioner is liable to pay sales tax as petitioner has been alleged to carry activities of 'works contract'. Therefore, orders of assessment being dated 29.2.1988 for the years 1984-85 (9/84 to 3/85), 1985-86 and 1986- 87 under Section 12(5) of OST Act and under Rule 5 of the Orissa Additional Sales Tax Rules, 1975 were passed and a tax of Rs. 20,765.00 and penalty of Rs. 5,000.00 totalling to Rs. 25,765.00 was imposed on the petitioner. The petitioner then filed the First Appeal before the learned Assistant Commissioner of Sales Tax. The First Appellate Authority by an order dated 27.9.1991 confirmed the levy of tax under the OST Act, but reduced the penalty to Rs. 1250.00. Thereupon, the petitioner filed the Second Appeal before the Orissa Sales Tax Tribunal, Cuttack. The said Tribunal heard the Second Appeal and in course of hearing, the petitioner raised various contentions. Ultimately, the Tribunal upheld the levy of tax but deleted the penalty.</p><p style="text-align: justify;">6. Thereafter the petitioner came up with a reference application under Section 24(1) of the Orissa Sales Tax Act framing certain questions for being referred to the Hon'ble High Court. The said prayer of the petitioner was rejected by the Tribunal. Then the petitioner moved Hon'ble High Court under Section 24(2)(b) of the Orissa Sales Tax Act, 1947 whereupon the High Court directed the Tribunal to state to case and refer the questions under Section 24(3) of the OST Act for a decision of the High Court.</p><p style="text-align: justify;">7. Accordingly, the Tribunal stated the case and referred the aforesaid questions for a decision of the High Court.</p><p style="text-align: justify;">8. Learned Counsel for the petitioner before the High Court submitted that in the transaction in question, there is no contract of sale between the petitioner and the client. It is only a contract of service and the photographs, which the petitioner produced by supplying the same has no commercial value and are not marketable. So, there is no question of a works contract. It is the consistent stand of the petitioner that the present photographs which are produced by the petitioner have no utility or value to any other person than the customer. By developing such photographs, the petitioner only renders service to his customers. The customer pays for the service rendered by the petitioner. It is the contention of the petitioner that his activity is similar to that of consulting firm preparing plan and sketches pursuant to client's specification or professional giving opinion on papers. All those activities are done to serve the client. Therefore, this does not come within the purview of the definition of 'goods', 'sale', 'dealer' or 'works contract'. It is the petitioner's case that he purchased the goods, namely, papers on payment of sales tax. Further levy of tax on the personal service rendered to the client of the petitioner will amount to double taxation. It is also the contention of the petitioner that the paper which is used in the photography are incidental and insignificant.</p><p style="text-align: justify;">9. In support of its contention, learned Counsel for the petitioner has relied on several judgments. First reliance was place on the judgment of the Supreme Court in the case of Sales Tax Officer v. B.C. Kame reported in 39 STC 237(SC). At page 241 of the report, learned Judges of the Supreme Court held that a photographer takes the photograph and develops the negatives and does other photographic work and thereafter supplies the prints to his client. By doing so he cannot be said to enter into a contract for sale of goods. On the other hand, the contract is for use of skill and labour by the photographer to bring about the desired result. Learned Judges held that the job of a photographer is a contract for work and labour and it is not a contract of sale.</p><p style="text-align: justify;">10. Reliance was also placed on a judgment of this High Court in the case of Photo Emporium v. Addl. District Magistrate reported in 77 STC 199 in which this High Court followed the ratio of the judgment of the Supreme Court in the case of B.C. Kame. In that case, the stand of the Revenue was disapproved by the Orissa High Court.</p><p style="text-align: justify;">11. Similar view was taken in 110 STC 145 in the case of Foto Colour Labs Pvt. Ltd. v. Commercial Taxes Officer where the Tribunal held that the transfer of paper in the photograph is purely incidental and payment is only taken to give positive prints and not to get the photo papers. Therefore, the contract in between the petitioner and his client is not a contract of sale, and neither directly or indirectly works contract is involved in the supply of photo papers. Similar view was taken by the West Bengal Taxation Tribunal in the case of Studio Kamalalaya v. Commercial Tax Officer reported in 89 STC 307.</p><p style="text-align: justify;">12. In the case of Bavens v. Onion of India report in 97 STC 161, learned Judges held that when a photographer takes a photograph of his customer, he develops the negative and supplies positive prints in the desired size to the customer. In doing so the photographer uses his own camera and his own film. The negative belongs to the photographer and not to the customer. No basic goods are provided by the customer which are subjected to processing by the photographer so as to make the contract a works contract. There is no accretion to goods or property or the nucleus of a property which belongs to the customer. It is the skill of the photographer which is most important to get the desired result.</p><p style="text-align: justify;">13. Hon'ble Karnataka High Court followed the same principle in the case of Keshoram Surlndranath Photo-mag Pvt. Ltd. v. Assistant Commissioner of Commercial Taxes reported in 121 STC 175. In that judgment, learned Judges of the Karnataka High Court relied on the judgment of the Supreme Court in B.C. Kame's case and came to the conclusion that in the job of the photographer in supplying positive prints to his customer, no works contract is involved and photographs are not marketable or saleable commodity and as such no tax can be levied on it.</p><p style="text-align: justify;">14. Against the said judgment of the Karnataka High Court, the State of Karnataka High Court filed a S.L.P. before the Hon'ble Supreme Court bearing SLP Nos. 6136-6163 of 2000 and the Hon'ble Supreme Court dismissed the SLP on 20th April, 2000.</p><p style="text-align: justify;">15. In the case of Rainbow Colour Lab v. State of M.P. learned Judges of the Hon'ble Supreme Court reiterated its judgment in B.C. Kame's case and came to the following conclusion:</p><p style="text-align: justify;">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.</p><p style="text-align: justify;">Hon'ble Supreme Court in Bharat Sanchar Nigam Ltd. v. Union of India reported in 145 STC 91 again reiterated the principle in B.C. Kame's case and held that the work done by the photographer is only in the nature of a service contract not involving any sale of goods and held that the stand taken by the State cannot be sustained.</p><p style="text-align: justify;">16. Learned Counsel for the petitioner submitted that the photographs taken by the petitioner are not goods which can be sold and is not a marketable commodity like any other goods. When the copies of photographs are made out, they have no utility or value to any other person than the customer. It is already admitted that the papers utilized for photographs are tax paid goods. Therefore, it is contended by the learned Counsel for the petitioner that the work of photography does not come within the purview of works contract as defined in Section 2(jj) of the Orissa Sales Tax Act.</p><p style="text-align: justify;">17. Learned Counsel for the Revenue in this case virtually did not contest the submission made by the learned Counsel for the petitioner and in support of his contention, learned Counsel for the Revenue relied on a decision of the Supreme Court in the case of Imagic Creative Pvt. Ltd. v. Commissioner of Commercial Taxes and Ors. reported in (2008) 10 RC 236. In that judgment, learned Judges held that since the contract in question is a service contract, it is difficult to hold that in a case of this nature, sales tax would be payable on the value of the entire contract irrespective of the element of service provided.</p><p style="text-align: justify;">For the reasons discussed above, we answer the first question in the negative and the second question, in the affirmative. We thus answer both the questions in favour of the assessee and against the Revenue.</p><p style="text-align: justify;">The three revision applications are thus disposed of.</p><p style="text-align: justify;">No costs.</p><p style="text-align: justify;">B.N. Mahapatra, J.</p><p style="text-align: justify;">18. I agree.<p style="text-align: justify;"></p><p style="text-align: justify;">',
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$title_for_layout = 'Studio Sujata Vs Commissioner of Sales Tax - Citation 531271 - Court Judgment | '
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	'Judgement' => array(
		'id' => '531271',
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		'appellant' => 'Studio Sujata',
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		'casename' => 'Studio Sujata Vs. Commissioner of Sales Tax',
		'casenote' => 'Sales Tax - Assessment - Contract of Sale - Section 12 (5) of Orissa Sales Tax 1947 - Petitioner carries on business of processing and developing photography - Revenue assessed petitioner under Section 12(5) of Act on ground that activities of petitioner can be called works contract - Petitioner approached to Assistant of Sales Tax on ground that there is no contract of sale between the petitioner and the client, it is only service - Dismissed and affirmed by Tribunal - Hence present petition - Whether Tribunal is right to held that tax is exigible for photographs as execution of works contract or not? - Held, as per precedent laid down by Supreme Court in case of Sales Tax Officer v. B.C. Kame that photographer takes photograph and develops negatives and does other photographic work and thereafter supplies prints to his client - By doing so he cannot be said to enter into contract for sale of goods - Therefore, job of photographer is contract for work and labour and it is not contract of sale - Revenue committed mistake in assessing petitioner under Section 12(5) of Act on basis of contract of sale - Petition disposed of accordingly  - STATE FINANCIAL CORPORATIONS ACT, 1951 [63/1951]. Section 29; [P.K. Tripathy, A.K. Parichha & N.Prusty, JJ] Discharge of loan  Orissa Forest Act (14 of 1972), Section 56  Confiscation of vehicle - Held, The Authorities under Section 56 of the Orissa Forest Act, 1972 are not obliged to release the vehicle from the confiscation proceeding or to pay the sale proceeds of the vehicle after the order of confiscation in favour of Orissa State Financial Corporation when such vehicles were purchased on being financed by the Orissa State Financial Corporation and the loan had not been liquidated by the date of the seizure/confiscation of the vehicle. Concept of first charge or second charge has no applicability when the vehicle is not otherwise disposed of to determine the liabilities of the loanee. On the other hand the vehicle having been found indulged in forest offences was made subject matter of a confiscation proceedings, and therefore, the procedure followed for confiscation of the vehicle and for its sale is punitive in nature and not with a view to give benefit to anybody including the Department which initiated the confiscation proceeding. Apart from that, the claim of the Orissa State Financial Corporation as against its loanee (who had taken the vehicle on hire- purchase agreement) brings the loanee and the sureties within the default clause under the State Financial Corporation Act, 1951 or the heirs and successors of such persons. Procedure is provided in the Act, 1951 and the Rules thereof about the manner in which such loan is to be recovered, and in that context only the vehicle under the hire-purchase agreement is placed as the first charge. If such property is not available for any reason, then the loan is not automatically waived or the loanee and his sureties are not automatically redeemed of the liabilities to repay. The Financial Corporation is concerned with repayment of loan either from the property or persons offered as surety. Thus, a vehicle, which is subject matter of confiscation proceeding under the Act, 1872, being not available to the Orissa State Financial Corporation for adjustment of the unpaid loan, that does not at all bring out an anomalous situation so as to defeat the right of the Orissa State Financial Corporation. Agreement between the Orissa State Financial Corporation and the loanee is a pure and simple contract governed by the provisions of the Contract Act, 1872 read with the provisions in the Act, 1951 and its Rules. On the other hand, a confiscation proceeding under the Act, 1972 is punitive in nature for commission of a forest offence. Thus, by virtue of the provision in Section 56 read with Section 64 (2) of the Act, 1972, the action taken for confiscation of the vehicle cannot be extended to grant protection of the loan advanced by Orissa State Financial Corporation. By doing that it amounts to grant premium to the pick-pockets in as much as, by making payment of the confiscation amount in favour of the Orissa State Financial Corporation the loan burden of the accused of the forest offence is reduced to the extent of the sale proceeds of the vehicle. In other words, on payment of the sale proceeds of the confiscation proceeding to the Orissa State Financial Corporation towards discharge of the loan account of the accused of a forest offence, it would lead to a system to reward him by repayment of his loan. Then it does not become a penalty nor the action become punitive, but it remains as a reward to the accused of forest offence. Such a concept is totally not conceivable from any provision in the Act, 1972 or the Act, 1951. [AIR 2002 Orissa 130 Overruled]. -- STATE FINANCIAL CORPORATIONS ACT, 1951. 
Section 29; Discharge of loan  Orissa Forest Act (14 of 1972), Section 56  Confiscation of vehicle - Held, The Authorities under Section 56 of the Orissa Forest Act, 1972 are not obliged to release the vehicle from the confiscation proceeding or to pay the sale proceeds of the vehicle after the order of confiscation in favour of Orissa State Financial Corporation when such vehicles were purchased on being financed by the Orissa State Financial Corporation and the loan had not been liquidated by the date of the seizure/confiscation of the vehicle. Concept of first charge or second charge has no applicability when the vehicle is not otherwise disposed of to determine the liabilities of the loanee. On the other hand the vehicle having been found indulged in forest offences was made subject matter of a confiscation proceedings, and therefore, the procedure followed for confiscation of the vehicle and for its sale is punitive in nature and not with a view to give benefit to anybody including the Department which initiated the confiscation proceeding. Apart from that, the claim of the Orissa State Financial Corporation as against its loanee (who had taken the vehicle on hire- purchase agreement) brings the loanee and the sureties within the default clause under the State Financial Corporation Act, 1951 or the heirs and successors of such persons. Procedure is provided in the Act, 1951 and the Rules thereof about the manner in which such loan is to be recovered, and in that context only the vehicle under the hire-purchase agreement is placed as the first charge. If such property is not available for any reason, then the loan is not automatically waived or the loanee and his sureties are not automatically redeemed of the liabilities to repay. The Financial Corporation is concerned with repayment of loan either from the property or persons offered as surety. Thus, a vehicle, which is subject matter of confiscation proceeding under the Act, 1872, being not available to the Orissa State Financial Corporation for adjustment of the unpaid loan, that does not at all bring out an anomalous situation so as to defeat the right of the Orissa State Financial Corporation. Agreement between the Orissa State Financial Corporation and the loanee is a pure and simple contract governed by the provisions of the Contract Act, 1872 read with the provisions in the Act, 1951 and its Rules. On the other hand, a confiscation proceeding under the Act, 1972 is punitive in nature for commission of a forest offence. Thus, by virtue of the provision in Section 56 read with Section 64 (2) of the Act, 1972, the action taken for confiscation of the vehicle cannot be extended to grant protection of the loan advanced by Orissa State Financial Corporation. By doing that it amounts to grant premium to the pick-pockets in as much as, by making payment of the confiscation amount in favour of the Orissa State Financial Corporation the loan burden of the accused of the forest offence is reduced to the extent of the sale proceeds of the vehicle. In other words, on payment of the sale proceeds of the confiscation proceeding to the Orissa State Financial Corporation towards discharge of the loan account of the accused of a forest offence, it would lead to a system to reward him by repayment of his loan. Then it does not become a penalty nor the action become punitive, but it remains as a reward to the accused of forest offence. Such a concept is totally not conceivable from any provision in the Act, 1972 or the Act, 1951. [AIR 2002 Orissa 130 Overruled].  -  In that case, the stand of the Revenue was disapproved by the Orissa High Court. 16. Learned Counsel for the petitioner submitted that the photographs taken by the petitioner are not goods which can be sold and is not a marketable commodity like any other goods.',
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		'casesref' => 'Imagic Creative Pvt. Ltd. v. Commissioner of Commercial Taxes and Ors.;',
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		'decidedon' => '2008-04-02',
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		'judge' => ' A.K. Ganguly, C.J. and; B.N. Mahapatra, J.',
		'judgement' => '<p>A.K. Ganguly, C.J.</p><p>1. Initially three S.J.Cs. being S.J.C. Nos. 10 of 1997, 8 of 1997 and 9 of 1997 were filed and subsequently renumbered as STREV Nos. 212, 214 and 216 of 2007 respectively. In view of the common questions of facts and law, all the three Revision Applications are heard and disposed of together.</p><p>2. The following questions of law arising out of the order passed by the Orissa Sales Tax Tribunal on 8.12.1993 in Second Appeal Nos. 3345 to 3350 of 1991-92 have been referred to this Hon'ble High Court in terms of the order of this Hon'ble Court dated 24.2.1997. The questions are:</p><p>(i) Whether on the facts and in the circumstances of the case, the Tribunal is right to held that tax is exigible for photographs as execution of works contract ?</p><p>(ii) Whether on the facts and in the circumstances of the case, the conclusion of the Tribunal is perverse due to non-consideration and mis-consideration of facts and law and, therefore, it is liable to be set aside for re-hearing ?</p><p>3. The materials facts out of which those questions arise are that the petitioner carries on the business of processing and developing photography. In the usual course of business, the petitioner takes photographs of persons or of family and then develops the negative by employing his skill and labour and then supplies the photographs to the clients. These photographs which are prepared by the petitioner are not commercial items because they are neither purchased nor sold. However, to develop these photographs employment of skill and labour is essential. It may be mentioned that petitioner does not carry on any sale of photographs of national leaders, God and Goddess.</p><p>4. After the passing of 46th amendment of the Constitution of India and consequent amendments thereto in Orissa Sales Tax Act (OST Act), the Sales Tax Officer, Bhubaneswar-II Circle, Bhubaneswar sent notices to assess the petitioner as an unregistered dealer under Section 12 (5) of the OST Act, inter alia, contending that the petitioner's activities can be called 'works contract'. Pursuant to said notice, the petitioner gave its reply and appeared before the Sales Tax Officer and produced the books of account and documents including Receipts, Purchase Memos, Vouchers, Ledger and thereby denied its liability under the OST Act. The petitioner also submitted objection petitions on various dates i.e. 28.12.1985, 10.1.1986, 20.2.1986 and 29.2.1988 contending, inter alia, that the petitioner has no sales tax liability under OST Act and the notices, which were issued, are without jurisdiction.</p><p>5. Ignoring the said objections of the petitioner, the Sales Tax Officer, Bhubaneswar-II Circle, Bhubaneswar assessed the petitioner as an unregistered dealer, inter alia, holding that the petitioner is liable to pay sales tax as petitioner has been alleged to carry activities of 'works contract'. Therefore, orders of assessment being dated 29.2.1988 for the years 1984-85 (9/84 to 3/85), 1985-86 and 1986- 87 under Section 12(5) of OST Act and under Rule 5 of the Orissa Additional Sales Tax Rules, 1975 were passed and a tax of Rs. 20,765.00 and penalty of Rs. 5,000.00 totalling to Rs. 25,765.00 was imposed on the petitioner. The petitioner then filed the First Appeal before the learned Assistant Commissioner of Sales Tax. The First Appellate Authority by an order dated 27.9.1991 confirmed the levy of tax under the OST Act, but reduced the penalty to Rs. 1250.00. Thereupon, the petitioner filed the Second Appeal before the Orissa Sales Tax Tribunal, Cuttack. The said Tribunal heard the Second Appeal and in course of hearing, the petitioner raised various contentions. Ultimately, the Tribunal upheld the levy of tax but deleted the penalty.</p><p>6. Thereafter the petitioner came up with a reference application under Section 24(1) of the Orissa Sales Tax Act framing certain questions for being referred to the Hon'ble High Court. The said prayer of the petitioner was rejected by the Tribunal. Then the petitioner moved Hon'ble High Court under Section 24(2)(b) of the Orissa Sales Tax Act, 1947 whereupon the High Court directed the Tribunal to state to case and refer the questions under Section 24(3) of the OST Act for a decision of the High Court.</p><p>7. Accordingly, the Tribunal stated the case and referred the aforesaid questions for a decision of the High Court.</p><p>8. Learned Counsel for the petitioner before the High Court submitted that in the transaction in question, there is no contract of sale between the petitioner and the client. It is only a contract of service and the photographs, which the petitioner produced by supplying the same has no commercial value and are not marketable. So, there is no question of a works contract. It is the consistent stand of the petitioner that the present photographs which are produced by the petitioner have no utility or value to any other person than the customer. By developing such photographs, the petitioner only renders service to his customers. The customer pays for the service rendered by the petitioner. It is the contention of the petitioner that his activity is similar to that of consulting firm preparing plan and sketches pursuant to client's specification or professional giving opinion on papers. All those activities are done to serve the client. Therefore, this does not come within the purview of the definition of 'goods', 'sale', 'dealer' or 'works contract'. It is the petitioner's case that he purchased the goods, namely, papers on payment of sales tax. Further levy of tax on the personal service rendered to the client of the petitioner will amount to double taxation. It is also the contention of the petitioner that the paper which is used in the photography are incidental and insignificant.</p><p>9. In support of its contention, learned Counsel for the petitioner has relied on several judgments. First reliance was place on the judgment of the Supreme Court in the case of Sales Tax Officer v. B.C. Kame reported in 39 STC 237(SC). At page 241 of the report, learned Judges of the Supreme Court held that a photographer takes the photograph and develops the negatives and does other photographic work and thereafter supplies the prints to his client. By doing so he cannot be said to enter into a contract for sale of goods. On the other hand, the contract is for use of skill and labour by the photographer to bring about the desired result. Learned Judges held that the job of a photographer is a contract for work and labour and it is not a contract of sale.</p><p>10. Reliance was also placed on a judgment of this High Court in the case of Photo Emporium v. Addl. District Magistrate reported in 77 STC 199 in which this High Court followed the ratio of the judgment of the Supreme Court in the case of B.C. Kame. In that case, the stand of the Revenue was disapproved by the Orissa High Court.</p><p>11. Similar view was taken in 110 STC 145 in the case of Foto Colour Labs Pvt. Ltd. v. Commercial Taxes Officer where the Tribunal held that the transfer of paper in the photograph is purely incidental and payment is only taken to give positive prints and not to get the photo papers. Therefore, the contract in between the petitioner and his client is not a contract of sale, and neither directly or indirectly works contract is involved in the supply of photo papers. Similar view was taken by the West Bengal Taxation Tribunal in the case of Studio Kamalalaya v. Commercial Tax Officer reported in 89 STC 307.</p><p>12. In the case of Bavens v. Onion of India report in 97 STC 161, learned Judges held that when a photographer takes a photograph of his customer, he develops the negative and supplies positive prints in the desired size to the customer. In doing so the photographer uses his own camera and his own film. The negative belongs to the photographer and not to the customer. No basic goods are provided by the customer which are subjected to processing by the photographer so as to make the contract a works contract. There is no accretion to goods or property or the nucleus of a property which belongs to the customer. It is the skill of the photographer which is most important to get the desired result.</p><p>13. Hon'ble Karnataka High Court followed the same principle in the case of Keshoram Surlndranath Photo-mag Pvt. Ltd. v. Assistant Commissioner of Commercial Taxes reported in 121 STC 175. In that judgment, learned Judges of the Karnataka High Court relied on the judgment of the Supreme Court in B.C. Kame's case and came to the conclusion that in the job of the photographer in supplying positive prints to his customer, no works contract is involved and photographs are not marketable or saleable commodity and as such no tax can be levied on it.</p><p>14. Against the said judgment of the Karnataka High Court, the State of Karnataka High Court filed a S.L.P. before the Hon'ble Supreme Court bearing SLP Nos. 6136-6163 of 2000 and the Hon'ble Supreme Court dismissed the SLP on 20th April, 2000.</p><p>15. In the case of Rainbow Colour Lab v. State of M.P. learned Judges of the Hon'ble Supreme Court reiterated its judgment in B.C. Kame's case and came to the following conclusion:</p><p>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.</p><p>Hon'ble Supreme Court in Bharat Sanchar Nigam Ltd. v. Union of India reported in 145 STC 91 again reiterated the principle in B.C. Kame's case and held that the work done by the photographer is only in the nature of a service contract not involving any sale of goods and held that the stand taken by the State cannot be sustained.</p><p>16. Learned Counsel for the petitioner submitted that the photographs taken by the petitioner are not goods which can be sold and is not a marketable commodity like any other goods. When the copies of photographs are made out, they have no utility or value to any other person than the customer. It is already admitted that the papers utilized for photographs are tax paid goods. Therefore, it is contended by the learned Counsel for the petitioner that the work of photography does not come within the purview of works contract as defined in Section 2(jj) of the Orissa Sales Tax Act.</p><p>17. Learned Counsel for the Revenue in this case virtually did not contest the submission made by the learned Counsel for the petitioner and in support of his contention, learned Counsel for the Revenue relied on a decision of the Supreme Court in the case of Imagic Creative Pvt. Ltd. v. Commissioner of Commercial Taxes and Ors. reported in (2008) 10 RC 236. In that judgment, learned Judges held that since the contract in question is a service contract, it is difficult to hold that in a case of this nature, sales tax would be payable on the value of the entire contract irrespective of the element of service provided.</p><p>For the reasons discussed above, we answer the first question in the negative and the second question, in the affirmative. We thus answer both the questions in favour of the assessee and against the Revenue.</p><p>The three revision applications are thus disposed of.</p><p>No costs.</p><p>B.N. Mahapatra, J.</p><p>18. I agree.<p></p><p>',
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	(int) 1 => '<p>1. Initially three S.J.Cs. being S.J.C. Nos. 10 of 1997, 8 of 1997 and 9 of 1997 were filed and subsequently renumbered as STREV Nos. 212, 214 and 216 of 2007 respectively. In view of the common questions of facts and law, all the three Revision Applications are heard and disposed of together.',
	(int) 2 => '<p>2. The following questions of law arising out of the order passed by the Orissa Sales Tax Tribunal on 8.12.1993 in Second Appeal Nos. 3345 to 3350 of 1991-92 have been referred to this Hon'ble High Court in terms of the order of this Hon'ble Court dated 24.2.1997. The questions are:',
	(int) 3 => '<p>(i) Whether on the facts and in the circumstances of the case, the Tribunal is right to held that tax is exigible for photographs as execution of works contract ?',
	(int) 4 => '<p>(ii) Whether on the facts and in the circumstances of the case, the conclusion of the Tribunal is perverse due to non-consideration and mis-consideration of facts and law and, therefore, it is liable to be set aside for re-hearing ?',
	(int) 5 => '<p>3. The materials facts out of which those questions arise are that the petitioner carries on the business of processing and developing photography. In the usual course of business, the petitioner takes photographs of persons or of family and then develops the negative by employing his skill and labour and then supplies the photographs to the clients. These photographs which are prepared by the petitioner are not commercial items because they are neither purchased nor sold. However, to develop these photographs employment of skill and labour is essential. It may be mentioned that petitioner does not carry on any sale of photographs of national leaders, God and Goddess.',
	(int) 6 => '<p>4. After the passing of 46th amendment of the Constitution of India and consequent amendments thereto in Orissa Sales Tax Act (OST Act), the Sales Tax Officer, Bhubaneswar-II Circle, Bhubaneswar sent notices to assess the petitioner as an unregistered dealer under Section 12 (5) of the OST Act, inter alia, contending that the petitioner's activities can be called 'works contract'. Pursuant to said notice, the petitioner gave its reply and appeared before the Sales Tax Officer and produced the books of account and documents including Receipts, Purchase Memos, Vouchers, Ledger and thereby denied its liability under the OST Act. The petitioner also submitted objection petitions on various dates i.e. 28.12.1985, 10.1.1986, 20.2.1986 and 29.2.1988 contending, inter alia, that the petitioner has no sales tax liability under OST Act and the notices, which were issued, are without jurisdiction.',
	(int) 7 => '<p>5. Ignoring the said objections of the petitioner, the Sales Tax Officer, Bhubaneswar-II Circle, Bhubaneswar assessed the petitioner as an unregistered dealer, inter alia, holding that the petitioner is liable to pay sales tax as petitioner has been alleged to carry activities of 'works contract'. Therefore, orders of assessment being dated 29.2.1988 for the years 1984-85 (9/84 to 3/85), 1985-86 and 1986- 87 under Section 12(5) of OST Act and under Rule 5 of the Orissa Additional Sales Tax Rules, 1975 were passed and a tax of Rs. 20,765.00 and penalty of Rs. 5,000.00 totalling to Rs. 25,765.00 was imposed on the petitioner. The petitioner then filed the First Appeal before the learned Assistant Commissioner of Sales Tax. The First Appellate Authority by an order dated 27.9.1991 confirmed the levy of tax under the OST Act, but reduced the penalty to Rs. 1250.00. Thereupon, the petitioner filed the Second Appeal before the Orissa Sales Tax Tribunal, Cuttack. The said Tribunal heard the Second Appeal and in course of hearing, the petitioner raised various contentions. Ultimately, the Tribunal upheld the levy of tax but deleted the penalty.',
	(int) 8 => '<p>6. Thereafter the petitioner came up with a reference application under Section 24(1) of the Orissa Sales Tax Act framing certain questions for being referred to the Hon'ble High Court. The said prayer of the petitioner was rejected by the Tribunal. Then the petitioner moved Hon'ble High Court under Section 24(2)(b) of the Orissa Sales Tax Act, 1947 whereupon the High Court directed the Tribunal to state to case and refer the questions under Section 24(3) of the OST Act for a decision of the High Court.',
	(int) 9 => '<p>7. Accordingly, the Tribunal stated the case and referred the aforesaid questions for a decision of the High Court.',
	(int) 10 => '<p>8. Learned Counsel for the petitioner before the High Court submitted that in the transaction in question, there is no contract of sale between the petitioner and the client. It is only a contract of service and the photographs, which the petitioner produced by supplying the same has no commercial value and are not marketable. So, there is no question of a works contract. It is the consistent stand of the petitioner that the present photographs which are produced by the petitioner have no utility or value to any other person than the customer. By developing such photographs, the petitioner only renders service to his customers. The customer pays for the service rendered by the petitioner. It is the contention of the petitioner that his activity is similar to that of consulting firm preparing plan and sketches pursuant to client's specification or professional giving opinion on papers. All those activities are done to serve the client. Therefore, this does not come within the purview of the definition of 'goods', 'sale', 'dealer' or 'works contract'. It is the petitioner's case that he purchased the goods, namely, papers on payment of sales tax. Further levy of tax on the personal service rendered to the client of the petitioner will amount to double taxation. It is also the contention of the petitioner that the paper which is used in the photography are incidental and insignificant.',
	(int) 11 => '<p>9. In support of its contention, learned Counsel for the petitioner has relied on several judgments. First reliance was place on the judgment of the Supreme Court in the case of Sales Tax Officer v. B.C. Kame reported in 39 STC 237(SC). At page 241 of the report, learned Judges of the Supreme Court held that a photographer takes the photograph and develops the negatives and does other photographic work and thereafter supplies the prints to his client. By doing so he cannot be said to enter into a contract for sale of goods. On the other hand, the contract is for use of skill and labour by the photographer to bring about the desired result. Learned Judges held that the job of a photographer is a contract for work and labour and it is not a contract of sale.',
	(int) 12 => '<p>10. Reliance was also placed on a judgment of this High Court in the case of Photo Emporium v. Addl. District Magistrate reported in 77 STC 199 in which this High Court followed the ratio of the judgment of the Supreme Court in the case of B.C. Kame. In that case, the stand of the Revenue was disapproved by the Orissa High Court.',
	(int) 13 => '<p>11. Similar view was taken in 110 STC 145 in the case of Foto Colour Labs Pvt. Ltd. v. Commercial Taxes Officer where the Tribunal held that the transfer of paper in the photograph is purely incidental and payment is only taken to give positive prints and not to get the photo papers. Therefore, the contract in between the petitioner and his client is not a contract of sale, and neither directly or indirectly works contract is involved in the supply of photo papers. Similar view was taken by the West Bengal Taxation Tribunal in the case of Studio Kamalalaya v. Commercial Tax Officer reported in 89 STC 307.',
	(int) 14 => '<p>12. In the case of Bavens v. Onion of India report in 97 STC 161, learned Judges held that when a photographer takes a photograph of his customer, he develops the negative and supplies positive prints in the desired size to the customer. In doing so the photographer uses his own camera and his own film. The negative belongs to the photographer and not to the customer. No basic goods are provided by the customer which are subjected to processing by the photographer so as to make the contract a works contract. There is no accretion to goods or property or the nucleus of a property which belongs to the customer. It is the skill of the photographer which is most important to get the desired result.',
	(int) 15 => '<p>13. Hon'ble Karnataka High Court followed the same principle in the case of Keshoram Surlndranath Photo-mag Pvt. Ltd. v. Assistant Commissioner of Commercial Taxes reported in 121 STC 175. In that judgment, learned Judges of the Karnataka High Court relied on the judgment of the Supreme Court in B.C. Kame's case and came to the conclusion that in the job of the photographer in supplying positive prints to his customer, no works contract is involved and photographs are not marketable or saleable commodity and as such no tax can be levied on it.',
	(int) 16 => '<p>14. Against the said judgment of the Karnataka High Court, the State of Karnataka High Court filed a S.L.P. before the Hon'ble Supreme Court bearing SLP Nos. 6136-6163 of 2000 and the Hon'ble Supreme Court dismissed the SLP on 20th April, 2000.',
	(int) 17 => '<p>15. In the case of Rainbow Colour Lab v. State of M.P. learned Judges of the Hon'ble Supreme Court reiterated its judgment in B.C. Kame's case and came to the following conclusion:',
	(int) 18 => '<p>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.',
	(int) 19 => '<p>Hon'ble Supreme Court in Bharat Sanchar Nigam Ltd. v. Union of India reported in 145 STC 91 again reiterated the principle in B.C. Kame's case and held that the work done by the photographer is only in the nature of a service contract not involving any sale of goods and held that the stand taken by the State cannot be sustained.',
	(int) 20 => '<p>16. Learned Counsel for the petitioner submitted that the photographs taken by the petitioner are not goods which can be sold and is not a marketable commodity like any other goods. When the copies of photographs are made out, they have no utility or value to any other person than the customer. It is already admitted that the papers utilized for photographs are tax paid goods. Therefore, it is contended by the learned Counsel for the petitioner that the work of photography does not come within the purview of works contract as defined in Section 2(jj) of the Orissa Sales Tax Act.',
	(int) 21 => '<p>17. Learned Counsel for the Revenue in this case virtually did not contest the submission made by the learned Counsel for the petitioner and in support of his contention, learned Counsel for the Revenue relied on a decision of the Supreme Court in the case of Imagic Creative Pvt. Ltd. v. Commissioner of Commercial Taxes and Ors. reported in (2008) 10 RC 236. In that judgment, learned Judges held that since the contract in question is a service contract, it is difficult to hold that in a case of this nature, sales tax would be payable on the value of the entire contract irrespective of the element of service provided.',
	(int) 22 => '<p>For the reasons discussed above, we answer the first question in the negative and the second question, in the affirmative. We thus answer both the questions in favour of the assessee and against the Revenue.',
	(int) 23 => '<p>The three revision applications are thus disposed of.',
	(int) 24 => '<p>No costs.',
	(int) 25 => '<p>B.N. Mahapatra, J.',
	(int) 26 => '<p>18. I agree.<p>',
	(int) 27 => '<p>'
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9. In support of its contention, learned Counsel for the petitioner has relied on several judgments. First reliance was place on the judgment of the Supreme Court in the case of Sales Tax Officer v. B.C. Kame reported in 39 STC 237(SC). At page 241 of the report, learned Judges of the Supreme Court held that a photographer takes the photograph and develops the negatives and does other photographic work and thereafter supplies the prints to his client. By doing so he cannot be said to enter into a contract for sale of goods. On the other hand, the contract is for use of skill and labour by the photographer to bring about the desired result. Learned Judges held that the job of a photographer is a contract for work and labour and it is not a contract of sale.

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	'title_for_layout' => 'Studio Sujata Vs Commissioner of Sales Tax - Citation 531271 - Court Judgment | ',
	'desc' => array(
		'Judgement' => array(
			'id' => '531271',
			'acts' => '',
			'appealno' => '',
			'appellant' => 'Studio Sujata',
			'authreffered' => '',
			'casename' => 'Studio Sujata Vs. Commissioner of Sales Tax',
			'casenote' => 'Sales Tax - Assessment - Contract of Sale - Section 12 (5) of Orissa Sales Tax 1947 - Petitioner carries on business of processing and developing photography - Revenue assessed petitioner under Section 12(5) of Act on ground that activities of petitioner can be called works contract - Petitioner approached to Assistant of Sales Tax on ground that there is no contract of sale between the petitioner and the client, it is only service - Dismissed and affirmed by Tribunal - Hence present petition - Whether Tribunal is right to held that tax is exigible for photographs as execution of works contract or not? - Held, as per precedent laid down by Supreme Court in case of Sales Tax Officer v. B.C. Kame that photographer takes photograph and develops negatives and does other photographic work and thereafter supplies prints to his client - By doing so he cannot be said to enter into contract for sale of goods - Therefore, job of photographer is contract for work and labour and it is not contract of sale - Revenue committed mistake in assessing petitioner under Section 12(5) of Act on basis of contract of sale - Petition disposed of accordingly  - STATE FINANCIAL CORPORATIONS ACT, 1951 [63/1951]. Section 29; [P.K. Tripathy, A.K. Parichha & N.Prusty, JJ] Discharge of loan  Orissa Forest Act (14 of 1972), Section 56  Confiscation of vehicle - Held, The Authorities under Section 56 of the Orissa Forest Act, 1972 are not obliged to release the vehicle from the confiscation proceeding or to pay the sale proceeds of the vehicle after the order of confiscation in favour of Orissa State Financial Corporation when such vehicles were purchased on being financed by the Orissa State Financial Corporation and the loan had not been liquidated by the date of the seizure/confiscation of the vehicle. Concept of first charge or second charge has no applicability when the vehicle is not otherwise disposed of to determine the liabilities of the loanee. On the other hand the vehicle having been found indulged in forest offences was made subject matter of a confiscation proceedings, and therefore, the procedure followed for confiscation of the vehicle and for its sale is punitive in nature and not with a view to give benefit to anybody including the Department which initiated the confiscation proceeding. Apart from that, the claim of the Orissa State Financial Corporation as against its loanee (who had taken the vehicle on hire- purchase agreement) brings the loanee and the sureties within the default clause under the State Financial Corporation Act, 1951 or the heirs and successors of such persons. Procedure is provided in the Act, 1951 and the Rules thereof about the manner in which such loan is to be recovered, and in that context only the vehicle under the hire-purchase agreement is placed as the first charge. If such property is not available for any reason, then the loan is not automatically waived or the loanee and his sureties are not automatically redeemed of the liabilities to repay. The Financial Corporation is concerned with repayment of loan either from the property or persons offered as surety. Thus, a vehicle, which is subject matter of confiscation proceeding under the Act, 1872, being not available to the Orissa State Financial Corporation for adjustment of the unpaid loan, that does not at all bring out an anomalous situation so as to defeat the right of the Orissa State Financial Corporation. Agreement between the Orissa State Financial Corporation and the loanee is a pure and simple contract governed by the provisions of the Contract Act, 1872 read with the provisions in the Act, 1951 and its Rules. On the other hand, a confiscation proceeding under the Act, 1972 is punitive in nature for commission of a forest offence. Thus, by virtue of the provision in Section 56 read with Section 64 (2) of the Act, 1972, the action taken for confiscation of the vehicle cannot be extended to grant protection of the loan advanced by Orissa State Financial Corporation. By doing that it amounts to grant premium to the pick-pockets in as much as, by making payment of the confiscation amount in favour of the Orissa State Financial Corporation the loan burden of the accused of the forest offence is reduced to the extent of the sale proceeds of the vehicle. In other words, on payment of the sale proceeds of the confiscation proceeding to the Orissa State Financial Corporation towards discharge of the loan account of the accused of a forest offence, it would lead to a system to reward him by repayment of his loan. Then it does not become a penalty nor the action become punitive, but it remains as a reward to the accused of forest offence. Such a concept is totally not conceivable from any provision in the Act, 1972 or the Act, 1951. [AIR 2002 Orissa 130 Overruled]. -- STATE FINANCIAL CORPORATIONS ACT, 1951. 
Section 29; Discharge of loan  Orissa Forest Act (14 of 1972), Section 56  Confiscation of vehicle - Held, The Authorities under Section 56 of the Orissa Forest Act, 1972 are not obliged to release the vehicle from the confiscation proceeding or to pay the sale proceeds of the vehicle after the order of confiscation in favour of Orissa State Financial Corporation when such vehicles were purchased on being financed by the Orissa State Financial Corporation and the loan had not been liquidated by the date of the seizure/confiscation of the vehicle. Concept of first charge or second charge has no applicability when the vehicle is not otherwise disposed of to determine the liabilities of the loanee. On the other hand the vehicle having been found indulged in forest offences was made subject matter of a confiscation proceedings, and therefore, the procedure followed for confiscation of the vehicle and for its sale is punitive in nature and not with a view to give benefit to anybody including the Department which initiated the confiscation proceeding. Apart from that, the claim of the Orissa State Financial Corporation as against its loanee (who had taken the vehicle on hire- purchase agreement) brings the loanee and the sureties within the default clause under the State Financial Corporation Act, 1951 or the heirs and successors of such persons. Procedure is provided in the Act, 1951 and the Rules thereof about the manner in which such loan is to be recovered, and in that context only the vehicle under the hire-purchase agreement is placed as the first charge. If such property is not available for any reason, then the loan is not automatically waived or the loanee and his sureties are not automatically redeemed of the liabilities to repay. The Financial Corporation is concerned with repayment of loan either from the property or persons offered as surety. Thus, a vehicle, which is subject matter of confiscation proceeding under the Act, 1872, being not available to the Orissa State Financial Corporation for adjustment of the unpaid loan, that does not at all bring out an anomalous situation so as to defeat the right of the Orissa State Financial Corporation. Agreement between the Orissa State Financial Corporation and the loanee is a pure and simple contract governed by the provisions of the Contract Act, 1872 read with the provisions in the Act, 1951 and its Rules. On the other hand, a confiscation proceeding under the Act, 1972 is punitive in nature for commission of a forest offence. Thus, by virtue of the provision in Section 56 read with Section 64 (2) of the Act, 1972, the action taken for confiscation of the vehicle cannot be extended to grant protection of the loan advanced by Orissa State Financial Corporation. By doing that it amounts to grant premium to the pick-pockets in as much as, by making payment of the confiscation amount in favour of the Orissa State Financial Corporation the loan burden of the accused of the forest offence is reduced to the extent of the sale proceeds of the vehicle. In other words, on payment of the sale proceeds of the confiscation proceeding to the Orissa State Financial Corporation towards discharge of the loan account of the accused of a forest offence, it would lead to a system to reward him by repayment of his loan. Then it does not become a penalty nor the action become punitive, but it remains as a reward to the accused of forest offence. Such a concept is totally not conceivable from any provision in the Act, 1972 or the Act, 1951. [AIR 2002 Orissa 130 Overruled].  -  In that case, the stand of the Revenue was disapproved by the Orissa High Court. 16. Learned Counsel for the petitioner submitted that the photographs taken by the petitioner are not goods which can be sold and is not a marketable commodity like any other goods.',
			'caseanalysis' => null,
			'casesref' => 'Imagic Creative Pvt. Ltd. v. Commissioner of Commercial Taxes and Ors.;',
			'citingcases' => '',
			'counselplain' => '',
			'counseldef' => '',
			'court' => 'Orissa',
			'court_type' => 'HC',
			'decidedon' => '2008-04-02',
			'deposition' => '',
			'favorof' => null,
			'findings' => null,
			'judge' => ' A.K. Ganguly, C.J. and; B.N. Mahapatra, J.',
			'judgement' => '<p style="text-align: justify;">A.K. Ganguly, C.J.</p><p style="text-align: justify;">1. Initially three S.J.Cs. being S.J.C. Nos. 10 of 1997, 8 of 1997 and 9 of 1997 were filed and subsequently renumbered as STREV Nos. 212, 214 and 216 of 2007 respectively. In view of the common questions of facts and law, all the three Revision Applications are heard and disposed of together.</p><p style="text-align: justify;">2. The following questions of law arising out of the order passed by the Orissa Sales Tax Tribunal on 8.12.1993 in Second Appeal Nos. 3345 to 3350 of 1991-92 have been referred to this Hon'ble High Court in terms of the order of this Hon'ble Court dated 24.2.1997. The questions are:</p><p style="text-align: justify;">(i) Whether on the facts and in the circumstances of the case, the Tribunal is right to held that tax is exigible for photographs as execution of works contract ?</p><p style="text-align: justify;">(ii) Whether on the facts and in the circumstances of the case, the conclusion of the Tribunal is perverse due to non-consideration and mis-consideration of facts and law and, therefore, it is liable to be set aside for re-hearing ?</p><p style="text-align: justify;">3. The materials facts out of which those questions arise are that the petitioner carries on the business of processing and developing photography. In the usual course of business, the petitioner takes photographs of persons or of family and then develops the negative by employing his skill and labour and then supplies the photographs to the clients. These photographs which are prepared by the petitioner are not commercial items because they are neither purchased nor sold. However, to develop these photographs employment of skill and labour is essential. It may be mentioned that petitioner does not carry on any sale of photographs of national leaders, God and Goddess.</p><p style="text-align: justify;">4. After the passing of 46th amendment of the Constitution of India and consequent amendments thereto in Orissa Sales Tax Act (OST Act), the Sales Tax Officer, Bhubaneswar-II Circle, Bhubaneswar sent notices to assess the petitioner as an unregistered dealer under Section 12 (5) of the OST Act, inter alia, contending that the petitioner's activities can be called 'works contract'. Pursuant to said notice, the petitioner gave its reply and appeared before the Sales Tax Officer and produced the books of account and documents including Receipts, Purchase Memos, Vouchers, Ledger and thereby denied its liability under the OST Act. The petitioner also submitted objection petitions on various dates i.e. 28.12.1985, 10.1.1986, 20.2.1986 and 29.2.1988 contending, inter alia, that the petitioner has no sales tax liability under OST Act and the notices, which were issued, are without jurisdiction.</p><p style="text-align: justify;">5. Ignoring the said objections of the petitioner, the Sales Tax Officer, Bhubaneswar-II Circle, Bhubaneswar assessed the petitioner as an unregistered dealer, inter alia, holding that the petitioner is liable to pay sales tax as petitioner has been alleged to carry activities of 'works contract'. Therefore, orders of assessment being dated 29.2.1988 for the years 1984-85 (9/84 to 3/85), 1985-86 and 1986- 87 under Section 12(5) of OST Act and under Rule 5 of the Orissa Additional Sales Tax Rules, 1975 were passed and a tax of Rs. 20,765.00 and penalty of Rs. 5,000.00 totalling to Rs. 25,765.00 was imposed on the petitioner. The petitioner then filed the First Appeal before the learned Assistant Commissioner of Sales Tax. The First Appellate Authority by an order dated 27.9.1991 confirmed the levy of tax under the OST Act, but reduced the penalty to Rs. 1250.00. Thereupon, the petitioner filed the Second Appeal before the Orissa Sales Tax Tribunal, Cuttack. The said Tribunal heard the Second Appeal and in course of hearing, the petitioner raised various contentions. Ultimately, the Tribunal upheld the levy of tax but deleted the penalty.</p><p style="text-align: justify;">6. Thereafter the petitioner came up with a reference application under Section 24(1) of the Orissa Sales Tax Act framing certain questions for being referred to the Hon'ble High Court. The said prayer of the petitioner was rejected by the Tribunal. Then the petitioner moved Hon'ble High Court under Section 24(2)(b) of the Orissa Sales Tax Act, 1947 whereupon the High Court directed the Tribunal to state to case and refer the questions under Section 24(3) of the OST Act for a decision of the High Court.</p><p style="text-align: justify;">7. Accordingly, the Tribunal stated the case and referred the aforesaid questions for a decision of the High Court.</p><p style="text-align: justify;">8. Learned Counsel for the petitioner before the High Court submitted that in the transaction in question, there is no contract of sale between the petitioner and the client. It is only a contract of service and the photographs, which the petitioner produced by supplying the same has no commercial value and are not marketable. So, there is no question of a works contract. It is the consistent stand of the petitioner that the present photographs which are produced by the petitioner have no utility or value to any other person than the customer. By developing such photographs, the petitioner only renders service to his customers. The customer pays for the service rendered by the petitioner. It is the contention of the petitioner that his activity is similar to that of consulting firm preparing plan and sketches pursuant to client's specification or professional giving opinion on papers. All those activities are done to serve the client. Therefore, this does not come within the purview of the definition of 'goods', 'sale', 'dealer' or 'works contract'. It is the petitioner's case that he purchased the goods, namely, papers on payment of sales tax. Further levy of tax on the personal service rendered to the client of the petitioner will amount to double taxation. It is also the contention of the petitioner that the paper which is used in the photography are incidental and insignificant.</p><p style="text-align: justify;">9. In support of its contention, learned Counsel for the petitioner has relied on several judgments. First reliance was place on the judgment of the Supreme Court in the case of Sales Tax Officer v. B.C. Kame reported in 39 STC 237(SC). At page 241 of the report, learned Judges of the Supreme Court held that a photographer takes the photograph and develops the negatives and does other photographic work and thereafter supplies the prints to his client. By doing so he cannot be said to enter into a contract for sale of goods. On the other hand, the contract is for use of skill and labour by the photographer to bring about the desired result. Learned Judges held that the job of a photographer is a contract for work and labour and it is not a contract of sale.</p><p style="text-align: justify;">10. Reliance was also placed on a judgment of this High Court in the case of Photo Emporium v. Addl. District Magistrate reported in 77 STC 199 in which this High Court followed the ratio of the judgment of the Supreme Court in the case of B.C. Kame. In that case, the stand of the Revenue was disapproved by the Orissa High Court.</p><p style="text-align: justify;">11. Similar view was taken in 110 STC 145 in the case of Foto Colour Labs Pvt. Ltd. v. Commercial Taxes Officer where the Tribunal held that the transfer of paper in the photograph is purely incidental and payment is only taken to give positive prints and not to get the photo papers. Therefore, the contract in between the petitioner and his client is not a contract of sale, and neither directly or indirectly works contract is involved in the supply of photo papers. Similar view was taken by the West Bengal Taxation Tribunal in the case of Studio Kamalalaya v. Commercial Tax Officer reported in 89 STC 307.</p><p style="text-align: justify;">12. In the case of Bavens v. Onion of India report in 97 STC 161, learned Judges held that when a photographer takes a photograph of his customer, he develops the negative and supplies positive prints in the desired size to the customer. In doing so the photographer uses his own camera and his own film. The negative belongs to the photographer and not to the customer. No basic goods are provided by the customer which are subjected to processing by the photographer so as to make the contract a works contract. There is no accretion to goods or property or the nucleus of a property which belongs to the customer. It is the skill of the photographer which is most important to get the desired result.</p><p style="text-align: justify;">13. Hon'ble Karnataka High Court followed the same principle in the case of Keshoram Surlndranath Photo-mag Pvt. Ltd. v. Assistant Commissioner of Commercial Taxes reported in 121 STC 175. In that judgment, learned Judges of the Karnataka High Court relied on the judgment of the Supreme Court in B.C. Kame's case and came to the conclusion that in the job of the photographer in supplying positive prints to his customer, no works contract is involved and photographs are not marketable or saleable commodity and as such no tax can be levied on it.</p><p style="text-align: justify;">14. Against the said judgment of the Karnataka High Court, the State of Karnataka High Court filed a S.L.P. before the Hon'ble Supreme Court bearing SLP Nos. 6136-6163 of 2000 and the Hon'ble Supreme Court dismissed the SLP on 20th April, 2000.</p><p style="text-align: justify;">15. In the case of Rainbow Colour Lab v. State of M.P. learned Judges of the Hon'ble Supreme Court reiterated its judgment in B.C. Kame's case and came to the following conclusion:</p><p style="text-align: justify;">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.</p><p style="text-align: justify;">Hon'ble Supreme Court in Bharat Sanchar Nigam Ltd. v. Union of India reported in 145 STC 91 again reiterated the principle in B.C. Kame's case and held that the work done by the photographer is only in the nature of a service contract not involving any sale of goods and held that the stand taken by the State cannot be sustained.</p><p style="text-align: justify;">16. Learned Counsel for the petitioner submitted that the photographs taken by the petitioner are not goods which can be sold and is not a marketable commodity like any other goods. When the copies of photographs are made out, they have no utility or value to any other person than the customer. It is already admitted that the papers utilized for photographs are tax paid goods. Therefore, it is contended by the learned Counsel for the petitioner that the work of photography does not come within the purview of works contract as defined in Section 2(jj) of the Orissa Sales Tax Act.</p><p style="text-align: justify;">17. Learned Counsel for the Revenue in this case virtually did not contest the submission made by the learned Counsel for the petitioner and in support of his contention, learned Counsel for the Revenue relied on a decision of the Supreme Court in the case of Imagic Creative Pvt. Ltd. v. Commissioner of Commercial Taxes and Ors. reported in (2008) 10 RC 236. In that judgment, learned Judges held that since the contract in question is a service contract, it is difficult to hold that in a case of this nature, sales tax would be payable on the value of the entire contract irrespective of the element of service provided.</p><p style="text-align: justify;">For the reasons discussed above, we answer the first question in the negative and the second question, in the affirmative. We thus answer both the questions in favour of the assessee and against the Revenue.</p><p style="text-align: justify;">The three revision applications are thus disposed of.</p><p style="text-align: justify;">No costs.</p><p style="text-align: justify;">B.N. Mahapatra, J.</p><p style="text-align: justify;">18. I agree.<p style="text-align: justify;"></p><p style="text-align: justify;">',
			'observations' => null,
			'overruledby' => null,
			'prhistory' => '',
			'pubs' => '106(2008)CLT317; 2008(I)OLR953; (2008)17VST289(Orissa)',
			'ratiodecidendi' => '',
			'respondent' => 'Commissioner of Sales Tax',
			'sub' => 'Sales Tax/VAT',
			'link' => null,
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	'casename_url' => 'studio-sujata-vs-commissioner-sales-tax',
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$title_for_layout = 'Studio Sujata Vs Commissioner of Sales Tax - Citation 531271 - Court Judgment | '
$desc = array(
	'Judgement' => array(
		'id' => '531271',
		'acts' => '',
		'appealno' => '',
		'appellant' => 'Studio Sujata',
		'authreffered' => '',
		'casename' => 'Studio Sujata Vs. Commissioner of Sales Tax',
		'casenote' => 'Sales Tax - Assessment - Contract of Sale - Section 12 (5) of Orissa Sales Tax 1947 - Petitioner carries on business of processing and developing photography - Revenue assessed petitioner under Section 12(5) of Act on ground that activities of petitioner can be called works contract - Petitioner approached to Assistant of Sales Tax on ground that there is no contract of sale between the petitioner and the client, it is only service - Dismissed and affirmed by Tribunal - Hence present petition - Whether Tribunal is right to held that tax is exigible for photographs as execution of works contract or not? - Held, as per precedent laid down by Supreme Court in case of Sales Tax Officer v. B.C. Kame that photographer takes photograph and develops negatives and does other photographic work and thereafter supplies prints to his client - By doing so he cannot be said to enter into contract for sale of goods - Therefore, job of photographer is contract for work and labour and it is not contract of sale - Revenue committed mistake in assessing petitioner under Section 12(5) of Act on basis of contract of sale - Petition disposed of accordingly  - STATE FINANCIAL CORPORATIONS ACT, 1951 [63/1951]. Section 29; [P.K. Tripathy, A.K. Parichha & N.Prusty, JJ] Discharge of loan  Orissa Forest Act (14 of 1972), Section 56  Confiscation of vehicle - Held, The Authorities under Section 56 of the Orissa Forest Act, 1972 are not obliged to release the vehicle from the confiscation proceeding or to pay the sale proceeds of the vehicle after the order of confiscation in favour of Orissa State Financial Corporation when such vehicles were purchased on being financed by the Orissa State Financial Corporation and the loan had not been liquidated by the date of the seizure/confiscation of the vehicle. Concept of first charge or second charge has no applicability when the vehicle is not otherwise disposed of to determine the liabilities of the loanee. On the other hand the vehicle having been found indulged in forest offences was made subject matter of a confiscation proceedings, and therefore, the procedure followed for confiscation of the vehicle and for its sale is punitive in nature and not with a view to give benefit to anybody including the Department which initiated the confiscation proceeding. Apart from that, the claim of the Orissa State Financial Corporation as against its loanee (who had taken the vehicle on hire- purchase agreement) brings the loanee and the sureties within the default clause under the State Financial Corporation Act, 1951 or the heirs and successors of such persons. Procedure is provided in the Act, 1951 and the Rules thereof about the manner in which such loan is to be recovered, and in that context only the vehicle under the hire-purchase agreement is placed as the first charge. If such property is not available for any reason, then the loan is not automatically waived or the loanee and his sureties are not automatically redeemed of the liabilities to repay. The Financial Corporation is concerned with repayment of loan either from the property or persons offered as surety. Thus, a vehicle, which is subject matter of confiscation proceeding under the Act, 1872, being not available to the Orissa State Financial Corporation for adjustment of the unpaid loan, that does not at all bring out an anomalous situation so as to defeat the right of the Orissa State Financial Corporation. Agreement between the Orissa State Financial Corporation and the loanee is a pure and simple contract governed by the provisions of the Contract Act, 1872 read with the provisions in the Act, 1951 and its Rules. On the other hand, a confiscation proceeding under the Act, 1972 is punitive in nature for commission of a forest offence. Thus, by virtue of the provision in Section 56 read with Section 64 (2) of the Act, 1972, the action taken for confiscation of the vehicle cannot be extended to grant protection of the loan advanced by Orissa State Financial Corporation. By doing that it amounts to grant premium to the pick-pockets in as much as, by making payment of the confiscation amount in favour of the Orissa State Financial Corporation the loan burden of the accused of the forest offence is reduced to the extent of the sale proceeds of the vehicle. In other words, on payment of the sale proceeds of the confiscation proceeding to the Orissa State Financial Corporation towards discharge of the loan account of the accused of a forest offence, it would lead to a system to reward him by repayment of his loan. Then it does not become a penalty nor the action become punitive, but it remains as a reward to the accused of forest offence. Such a concept is totally not conceivable from any provision in the Act, 1972 or the Act, 1951. [AIR 2002 Orissa 130 Overruled]. -- STATE FINANCIAL CORPORATIONS ACT, 1951. 
Section 29; Discharge of loan  Orissa Forest Act (14 of 1972), Section 56  Confiscation of vehicle - Held, The Authorities under Section 56 of the Orissa Forest Act, 1972 are not obliged to release the vehicle from the confiscation proceeding or to pay the sale proceeds of the vehicle after the order of confiscation in favour of Orissa State Financial Corporation when such vehicles were purchased on being financed by the Orissa State Financial Corporation and the loan had not been liquidated by the date of the seizure/confiscation of the vehicle. Concept of first charge or second charge has no applicability when the vehicle is not otherwise disposed of to determine the liabilities of the loanee. On the other hand the vehicle having been found indulged in forest offences was made subject matter of a confiscation proceedings, and therefore, the procedure followed for confiscation of the vehicle and for its sale is punitive in nature and not with a view to give benefit to anybody including the Department which initiated the confiscation proceeding. Apart from that, the claim of the Orissa State Financial Corporation as against its loanee (who had taken the vehicle on hire- purchase agreement) brings the loanee and the sureties within the default clause under the State Financial Corporation Act, 1951 or the heirs and successors of such persons. Procedure is provided in the Act, 1951 and the Rules thereof about the manner in which such loan is to be recovered, and in that context only the vehicle under the hire-purchase agreement is placed as the first charge. If such property is not available for any reason, then the loan is not automatically waived or the loanee and his sureties are not automatically redeemed of the liabilities to repay. The Financial Corporation is concerned with repayment of loan either from the property or persons offered as surety. Thus, a vehicle, which is subject matter of confiscation proceeding under the Act, 1872, being not available to the Orissa State Financial Corporation for adjustment of the unpaid loan, that does not at all bring out an anomalous situation so as to defeat the right of the Orissa State Financial Corporation. Agreement between the Orissa State Financial Corporation and the loanee is a pure and simple contract governed by the provisions of the Contract Act, 1872 read with the provisions in the Act, 1951 and its Rules. On the other hand, a confiscation proceeding under the Act, 1972 is punitive in nature for commission of a forest offence. Thus, by virtue of the provision in Section 56 read with Section 64 (2) of the Act, 1972, the action taken for confiscation of the vehicle cannot be extended to grant protection of the loan advanced by Orissa State Financial Corporation. By doing that it amounts to grant premium to the pick-pockets in as much as, by making payment of the confiscation amount in favour of the Orissa State Financial Corporation the loan burden of the accused of the forest offence is reduced to the extent of the sale proceeds of the vehicle. In other words, on payment of the sale proceeds of the confiscation proceeding to the Orissa State Financial Corporation towards discharge of the loan account of the accused of a forest offence, it would lead to a system to reward him by repayment of his loan. Then it does not become a penalty nor the action become punitive, but it remains as a reward to the accused of forest offence. Such a concept is totally not conceivable from any provision in the Act, 1972 or the Act, 1951. [AIR 2002 Orissa 130 Overruled].  -  In that case, the stand of the Revenue was disapproved by the Orissa High Court. 16. Learned Counsel for the petitioner submitted that the photographs taken by the petitioner are not goods which can be sold and is not a marketable commodity like any other goods.',
		'caseanalysis' => null,
		'casesref' => 'Imagic Creative Pvt. Ltd. v. Commissioner of Commercial Taxes and Ors.;',
		'citingcases' => '',
		'counselplain' => '',
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		'court' => 'Orissa',
		'court_type' => 'HC',
		'decidedon' => '2008-04-02',
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		'judge' => ' A.K. Ganguly, C.J. and; B.N. Mahapatra, J.',
		'judgement' => '<p>A.K. Ganguly, C.J.</p><p>1. Initially three S.J.Cs. being S.J.C. Nos. 10 of 1997, 8 of 1997 and 9 of 1997 were filed and subsequently renumbered as STREV Nos. 212, 214 and 216 of 2007 respectively. In view of the common questions of facts and law, all the three Revision Applications are heard and disposed of together.</p><p>2. The following questions of law arising out of the order passed by the Orissa Sales Tax Tribunal on 8.12.1993 in Second Appeal Nos. 3345 to 3350 of 1991-92 have been referred to this Hon'ble High Court in terms of the order of this Hon'ble Court dated 24.2.1997. The questions are:</p><p>(i) Whether on the facts and in the circumstances of the case, the Tribunal is right to held that tax is exigible for photographs as execution of works contract ?</p><p>(ii) Whether on the facts and in the circumstances of the case, the conclusion of the Tribunal is perverse due to non-consideration and mis-consideration of facts and law and, therefore, it is liable to be set aside for re-hearing ?</p><p>3. The materials facts out of which those questions arise are that the petitioner carries on the business of processing and developing photography. In the usual course of business, the petitioner takes photographs of persons or of family and then develops the negative by employing his skill and labour and then supplies the photographs to the clients. These photographs which are prepared by the petitioner are not commercial items because they are neither purchased nor sold. However, to develop these photographs employment of skill and labour is essential. It may be mentioned that petitioner does not carry on any sale of photographs of national leaders, God and Goddess.</p><p>4. After the passing of 46th amendment of the Constitution of India and consequent amendments thereto in Orissa Sales Tax Act (OST Act), the Sales Tax Officer, Bhubaneswar-II Circle, Bhubaneswar sent notices to assess the petitioner as an unregistered dealer under Section 12 (5) of the OST Act, inter alia, contending that the petitioner's activities can be called 'works contract'. Pursuant to said notice, the petitioner gave its reply and appeared before the Sales Tax Officer and produced the books of account and documents including Receipts, Purchase Memos, Vouchers, Ledger and thereby denied its liability under the OST Act. The petitioner also submitted objection petitions on various dates i.e. 28.12.1985, 10.1.1986, 20.2.1986 and 29.2.1988 contending, inter alia, that the petitioner has no sales tax liability under OST Act and the notices, which were issued, are without jurisdiction.</p><p>5. Ignoring the said objections of the petitioner, the Sales Tax Officer, Bhubaneswar-II Circle, Bhubaneswar assessed the petitioner as an unregistered dealer, inter alia, holding that the petitioner is liable to pay sales tax as petitioner has been alleged to carry activities of 'works contract'. Therefore, orders of assessment being dated 29.2.1988 for the years 1984-85 (9/84 to 3/85), 1985-86 and 1986- 87 under Section 12(5) of OST Act and under Rule 5 of the Orissa Additional Sales Tax Rules, 1975 were passed and a tax of Rs. 20,765.00 and penalty of Rs. 5,000.00 totalling to Rs. 25,765.00 was imposed on the petitioner. The petitioner then filed the First Appeal before the learned Assistant Commissioner of Sales Tax. The First Appellate Authority by an order dated 27.9.1991 confirmed the levy of tax under the OST Act, but reduced the penalty to Rs. 1250.00. Thereupon, the petitioner filed the Second Appeal before the Orissa Sales Tax Tribunal, Cuttack. The said Tribunal heard the Second Appeal and in course of hearing, the petitioner raised various contentions. Ultimately, the Tribunal upheld the levy of tax but deleted the penalty.</p><p>6. Thereafter the petitioner came up with a reference application under Section 24(1) of the Orissa Sales Tax Act framing certain questions for being referred to the Hon'ble High Court. The said prayer of the petitioner was rejected by the Tribunal. Then the petitioner moved Hon'ble High Court under Section 24(2)(b) of the Orissa Sales Tax Act, 1947 whereupon the High Court directed the Tribunal to state to case and refer the questions under Section 24(3) of the OST Act for a decision of the High Court.</p><p>7. Accordingly, the Tribunal stated the case and referred the aforesaid questions for a decision of the High Court.</p><p>8. Learned Counsel for the petitioner before the High Court submitted that in the transaction in question, there is no contract of sale between the petitioner and the client. It is only a contract of service and the photographs, which the petitioner produced by supplying the same has no commercial value and are not marketable. So, there is no question of a works contract. It is the consistent stand of the petitioner that the present photographs which are produced by the petitioner have no utility or value to any other person than the customer. By developing such photographs, the petitioner only renders service to his customers. The customer pays for the service rendered by the petitioner. It is the contention of the petitioner that his activity is similar to that of consulting firm preparing plan and sketches pursuant to client's specification or professional giving opinion on papers. All those activities are done to serve the client. Therefore, this does not come within the purview of the definition of 'goods', 'sale', 'dealer' or 'works contract'. It is the petitioner's case that he purchased the goods, namely, papers on payment of sales tax. Further levy of tax on the personal service rendered to the client of the petitioner will amount to double taxation. It is also the contention of the petitioner that the paper which is used in the photography are incidental and insignificant.</p><p>9. In support of its contention, learned Counsel for the petitioner has relied on several judgments. First reliance was place on the judgment of the Supreme Court in the case of Sales Tax Officer v. B.C. Kame reported in 39 STC 237(SC). At page 241 of the report, learned Judges of the Supreme Court held that a photographer takes the photograph and develops the negatives and does other photographic work and thereafter supplies the prints to his client. By doing so he cannot be said to enter into a contract for sale of goods. On the other hand, the contract is for use of skill and labour by the photographer to bring about the desired result. Learned Judges held that the job of a photographer is a contract for work and labour and it is not a contract of sale.</p><p>10. Reliance was also placed on a judgment of this High Court in the case of Photo Emporium v. Addl. District Magistrate reported in 77 STC 199 in which this High Court followed the ratio of the judgment of the Supreme Court in the case of B.C. Kame. In that case, the stand of the Revenue was disapproved by the Orissa High Court.</p><p>11. Similar view was taken in 110 STC 145 in the case of Foto Colour Labs Pvt. Ltd. v. Commercial Taxes Officer where the Tribunal held that the transfer of paper in the photograph is purely incidental and payment is only taken to give positive prints and not to get the photo papers. Therefore, the contract in between the petitioner and his client is not a contract of sale, and neither directly or indirectly works contract is involved in the supply of photo papers. Similar view was taken by the West Bengal Taxation Tribunal in the case of Studio Kamalalaya v. Commercial Tax Officer reported in 89 STC 307.</p><p>12. In the case of Bavens v. Onion of India report in 97 STC 161, learned Judges held that when a photographer takes a photograph of his customer, he develops the negative and supplies positive prints in the desired size to the customer. In doing so the photographer uses his own camera and his own film. The negative belongs to the photographer and not to the customer. No basic goods are provided by the customer which are subjected to processing by the photographer so as to make the contract a works contract. There is no accretion to goods or property or the nucleus of a property which belongs to the customer. It is the skill of the photographer which is most important to get the desired result.</p><p>13. Hon'ble Karnataka High Court followed the same principle in the case of Keshoram Surlndranath Photo-mag Pvt. Ltd. v. Assistant Commissioner of Commercial Taxes reported in 121 STC 175. In that judgment, learned Judges of the Karnataka High Court relied on the judgment of the Supreme Court in B.C. Kame's case and came to the conclusion that in the job of the photographer in supplying positive prints to his customer, no works contract is involved and photographs are not marketable or saleable commodity and as such no tax can be levied on it.</p><p>14. Against the said judgment of the Karnataka High Court, the State of Karnataka High Court filed a S.L.P. before the Hon'ble Supreme Court bearing SLP Nos. 6136-6163 of 2000 and the Hon'ble Supreme Court dismissed the SLP on 20th April, 2000.</p><p>15. In the case of Rainbow Colour Lab v. State of M.P. learned Judges of the Hon'ble Supreme Court reiterated its judgment in B.C. Kame's case and came to the following conclusion:</p><p>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.</p><p>Hon'ble Supreme Court in Bharat Sanchar Nigam Ltd. v. Union of India reported in 145 STC 91 again reiterated the principle in B.C. Kame's case and held that the work done by the photographer is only in the nature of a service contract not involving any sale of goods and held that the stand taken by the State cannot be sustained.</p><p>16. Learned Counsel for the petitioner submitted that the photographs taken by the petitioner are not goods which can be sold and is not a marketable commodity like any other goods. When the copies of photographs are made out, they have no utility or value to any other person than the customer. It is already admitted that the papers utilized for photographs are tax paid goods. Therefore, it is contended by the learned Counsel for the petitioner that the work of photography does not come within the purview of works contract as defined in Section 2(jj) of the Orissa Sales Tax Act.</p><p>17. Learned Counsel for the Revenue in this case virtually did not contest the submission made by the learned Counsel for the petitioner and in support of his contention, learned Counsel for the Revenue relied on a decision of the Supreme Court in the case of Imagic Creative Pvt. Ltd. v. Commissioner of Commercial Taxes and Ors. reported in (2008) 10 RC 236. In that judgment, learned Judges held that since the contract in question is a service contract, it is difficult to hold that in a case of this nature, sales tax would be payable on the value of the entire contract irrespective of the element of service provided.</p><p>For the reasons discussed above, we answer the first question in the negative and the second question, in the affirmative. We thus answer both the questions in favour of the assessee and against the Revenue.</p><p>The three revision applications are thus disposed of.</p><p>No costs.</p><p>B.N. Mahapatra, J.</p><p>18. I agree.<p></p><p>',
		'observations' => null,
		'overruledby' => null,
		'prhistory' => '',
		'pubs' => '106(2008)CLT317; 2008(I)OLR953; (2008)17VST289(Orissa)',
		'ratiodecidendi' => '',
		'respondent' => 'Commissioner of Sales Tax',
		'sub' => 'Sales Tax/VAT',
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$ctype = ' High Court'
$caseref = 'Imagic Creative Pvt. Ltd. v. Commissioner of Commercial Taxes and Ors.<br>'
$content = array(
	(int) 0 => '<p>A.K. Ganguly, C.J.',
	(int) 1 => '<p>1. Initially three S.J.Cs. being S.J.C. Nos. 10 of 1997, 8 of 1997 and 9 of 1997 were filed and subsequently renumbered as STREV Nos. 212, 214 and 216 of 2007 respectively. In view of the common questions of facts and law, all the three Revision Applications are heard and disposed of together.',
	(int) 2 => '<p>2. The following questions of law arising out of the order passed by the Orissa Sales Tax Tribunal on 8.12.1993 in Second Appeal Nos. 3345 to 3350 of 1991-92 have been referred to this Hon'ble High Court in terms of the order of this Hon'ble Court dated 24.2.1997. The questions are:',
	(int) 3 => '<p>(i) Whether on the facts and in the circumstances of the case, the Tribunal is right to held that tax is exigible for photographs as execution of works contract ?',
	(int) 4 => '<p>(ii) Whether on the facts and in the circumstances of the case, the conclusion of the Tribunal is perverse due to non-consideration and mis-consideration of facts and law and, therefore, it is liable to be set aside for re-hearing ?',
	(int) 5 => '<p>3. The materials facts out of which those questions arise are that the petitioner carries on the business of processing and developing photography. In the usual course of business, the petitioner takes photographs of persons or of family and then develops the negative by employing his skill and labour and then supplies the photographs to the clients. These photographs which are prepared by the petitioner are not commercial items because they are neither purchased nor sold. However, to develop these photographs employment of skill and labour is essential. It may be mentioned that petitioner does not carry on any sale of photographs of national leaders, God and Goddess.',
	(int) 6 => '<p>4. After the passing of 46th amendment of the Constitution of India and consequent amendments thereto in Orissa Sales Tax Act (OST Act), the Sales Tax Officer, Bhubaneswar-II Circle, Bhubaneswar sent notices to assess the petitioner as an unregistered dealer under Section 12 (5) of the OST Act, inter alia, contending that the petitioner's activities can be called 'works contract'. Pursuant to said notice, the petitioner gave its reply and appeared before the Sales Tax Officer and produced the books of account and documents including Receipts, Purchase Memos, Vouchers, Ledger and thereby denied its liability under the OST Act. The petitioner also submitted objection petitions on various dates i.e. 28.12.1985, 10.1.1986, 20.2.1986 and 29.2.1988 contending, inter alia, that the petitioner has no sales tax liability under OST Act and the notices, which were issued, are without jurisdiction.',
	(int) 7 => '<p>5. Ignoring the said objections of the petitioner, the Sales Tax Officer, Bhubaneswar-II Circle, Bhubaneswar assessed the petitioner as an unregistered dealer, inter alia, holding that the petitioner is liable to pay sales tax as petitioner has been alleged to carry activities of 'works contract'. Therefore, orders of assessment being dated 29.2.1988 for the years 1984-85 (9/84 to 3/85), 1985-86 and 1986- 87 under Section 12(5) of OST Act and under Rule 5 of the Orissa Additional Sales Tax Rules, 1975 were passed and a tax of Rs. 20,765.00 and penalty of Rs. 5,000.00 totalling to Rs. 25,765.00 was imposed on the petitioner. The petitioner then filed the First Appeal before the learned Assistant Commissioner of Sales Tax. The First Appellate Authority by an order dated 27.9.1991 confirmed the levy of tax under the OST Act, but reduced the penalty to Rs. 1250.00. Thereupon, the petitioner filed the Second Appeal before the Orissa Sales Tax Tribunal, Cuttack. The said Tribunal heard the Second Appeal and in course of hearing, the petitioner raised various contentions. Ultimately, the Tribunal upheld the levy of tax but deleted the penalty.',
	(int) 8 => '<p>6. Thereafter the petitioner came up with a reference application under Section 24(1) of the Orissa Sales Tax Act framing certain questions for being referred to the Hon'ble High Court. The said prayer of the petitioner was rejected by the Tribunal. Then the petitioner moved Hon'ble High Court under Section 24(2)(b) of the Orissa Sales Tax Act, 1947 whereupon the High Court directed the Tribunal to state to case and refer the questions under Section 24(3) of the OST Act for a decision of the High Court.',
	(int) 9 => '<p>7. Accordingly, the Tribunal stated the case and referred the aforesaid questions for a decision of the High Court.',
	(int) 10 => '<p>8. Learned Counsel for the petitioner before the High Court submitted that in the transaction in question, there is no contract of sale between the petitioner and the client. It is only a contract of service and the photographs, which the petitioner produced by supplying the same has no commercial value and are not marketable. So, there is no question of a works contract. It is the consistent stand of the petitioner that the present photographs which are produced by the petitioner have no utility or value to any other person than the customer. By developing such photographs, the petitioner only renders service to his customers. The customer pays for the service rendered by the petitioner. It is the contention of the petitioner that his activity is similar to that of consulting firm preparing plan and sketches pursuant to client's specification or professional giving opinion on papers. All those activities are done to serve the client. Therefore, this does not come within the purview of the definition of 'goods', 'sale', 'dealer' or 'works contract'. It is the petitioner's case that he purchased the goods, namely, papers on payment of sales tax. Further levy of tax on the personal service rendered to the client of the petitioner will amount to double taxation. It is also the contention of the petitioner that the paper which is used in the photography are incidental and insignificant.',
	(int) 11 => '<p>9. In support of its contention, learned Counsel for the petitioner has relied on several judgments. First reliance was place on the judgment of the Supreme Court in the case of Sales Tax Officer v. B.C. Kame reported in 39 STC 237(SC). At page 241 of the report, learned Judges of the Supreme Court held that a photographer takes the photograph and develops the negatives and does other photographic work and thereafter supplies the prints to his client. By doing so he cannot be said to enter into a contract for sale of goods. On the other hand, the contract is for use of skill and labour by the photographer to bring about the desired result. Learned Judges held that the job of a photographer is a contract for work and labour and it is not a contract of sale.',
	(int) 12 => '<p>10. Reliance was also placed on a judgment of this High Court in the case of Photo Emporium v. Addl. District Magistrate reported in 77 STC 199 in which this High Court followed the ratio of the judgment of the Supreme Court in the case of B.C. Kame. In that case, the stand of the Revenue was disapproved by the Orissa High Court.',
	(int) 13 => '<p>11. Similar view was taken in 110 STC 145 in the case of Foto Colour Labs Pvt. Ltd. v. Commercial Taxes Officer where the Tribunal held that the transfer of paper in the photograph is purely incidental and payment is only taken to give positive prints and not to get the photo papers. Therefore, the contract in between the petitioner and his client is not a contract of sale, and neither directly or indirectly works contract is involved in the supply of photo papers. Similar view was taken by the West Bengal Taxation Tribunal in the case of Studio Kamalalaya v. Commercial Tax Officer reported in 89 STC 307.',
	(int) 14 => '<p>12. In the case of Bavens v. Onion of India report in 97 STC 161, learned Judges held that when a photographer takes a photograph of his customer, he develops the negative and supplies positive prints in the desired size to the customer. In doing so the photographer uses his own camera and his own film. The negative belongs to the photographer and not to the customer. No basic goods are provided by the customer which are subjected to processing by the photographer so as to make the contract a works contract. There is no accretion to goods or property or the nucleus of a property which belongs to the customer. It is the skill of the photographer which is most important to get the desired result.',
	(int) 15 => '<p>13. Hon'ble Karnataka High Court followed the same principle in the case of Keshoram Surlndranath Photo-mag Pvt. Ltd. v. Assistant Commissioner of Commercial Taxes reported in 121 STC 175. In that judgment, learned Judges of the Karnataka High Court relied on the judgment of the Supreme Court in B.C. Kame's case and came to the conclusion that in the job of the photographer in supplying positive prints to his customer, no works contract is involved and photographs are not marketable or saleable commodity and as such no tax can be levied on it.',
	(int) 16 => '<p>14. Against the said judgment of the Karnataka High Court, the State of Karnataka High Court filed a S.L.P. before the Hon'ble Supreme Court bearing SLP Nos. 6136-6163 of 2000 and the Hon'ble Supreme Court dismissed the SLP on 20th April, 2000.',
	(int) 17 => '<p>15. In the case of Rainbow Colour Lab v. State of M.P. learned Judges of the Hon'ble Supreme Court reiterated its judgment in B.C. Kame's case and came to the following conclusion:',
	(int) 18 => '<p>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.',
	(int) 19 => '<p>Hon'ble Supreme Court in Bharat Sanchar Nigam Ltd. v. Union of India reported in 145 STC 91 again reiterated the principle in B.C. Kame's case and held that the work done by the photographer is only in the nature of a service contract not involving any sale of goods and held that the stand taken by the State cannot be sustained.',
	(int) 20 => '<p>16. Learned Counsel for the petitioner submitted that the photographs taken by the petitioner are not goods which can be sold and is not a marketable commodity like any other goods. When the copies of photographs are made out, they have no utility or value to any other person than the customer. It is already admitted that the papers utilized for photographs are tax paid goods. Therefore, it is contended by the learned Counsel for the petitioner that the work of photography does not come within the purview of works contract as defined in Section 2(jj) of the Orissa Sales Tax Act.',
	(int) 21 => '<p>17. Learned Counsel for the Revenue in this case virtually did not contest the submission made by the learned Counsel for the petitioner and in support of his contention, learned Counsel for the Revenue relied on a decision of the Supreme Court in the case of Imagic Creative Pvt. Ltd. v. Commissioner of Commercial Taxes and Ors. reported in (2008) 10 RC 236. In that judgment, learned Judges held that since the contract in question is a service contract, it is difficult to hold that in a case of this nature, sales tax would be payable on the value of the entire contract irrespective of the element of service provided.',
	(int) 22 => '<p>For the reasons discussed above, we answer the first question in the negative and the second question, in the affirmative. We thus answer both the questions in favour of the assessee and against the Revenue.',
	(int) 23 => '<p>The three revision applications are thus disposed of.',
	(int) 24 => '<p>No costs.',
	(int) 25 => '<p>B.N. Mahapatra, J.',
	(int) 26 => '<p>18. I agree.<p>',
	(int) 27 => '<p>'
)
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10. Reliance was also placed on a judgment of this High Court in the case of Photo Emporium v. Addl. District Magistrate reported in 77 STC 199 in which this High Court followed the ratio of the judgment of the Supreme Court in the case of B.C. Kame. In that case, the stand of the Revenue was disapproved by the Orissa High Court.

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			'appellant' => 'Studio Sujata',
			'authreffered' => '',
			'casename' => 'Studio Sujata Vs. Commissioner of Sales Tax',
			'casenote' => 'Sales Tax - Assessment - Contract of Sale - Section 12 (5) of Orissa Sales Tax 1947 - Petitioner carries on business of processing and developing photography - Revenue assessed petitioner under Section 12(5) of Act on ground that activities of petitioner can be called works contract - Petitioner approached to Assistant of Sales Tax on ground that there is no contract of sale between the petitioner and the client, it is only service - Dismissed and affirmed by Tribunal - Hence present petition - Whether Tribunal is right to held that tax is exigible for photographs as execution of works contract or not? - Held, as per precedent laid down by Supreme Court in case of Sales Tax Officer v. B.C. Kame that photographer takes photograph and develops negatives and does other photographic work and thereafter supplies prints to his client - By doing so he cannot be said to enter into contract for sale of goods - Therefore, job of photographer is contract for work and labour and it is not contract of sale - Revenue committed mistake in assessing petitioner under Section 12(5) of Act on basis of contract of sale - Petition disposed of accordingly  - STATE FINANCIAL CORPORATIONS ACT, 1951 [63/1951]. Section 29; [P.K. Tripathy, A.K. Parichha & N.Prusty, JJ] Discharge of loan  Orissa Forest Act (14 of 1972), Section 56  Confiscation of vehicle - Held, The Authorities under Section 56 of the Orissa Forest Act, 1972 are not obliged to release the vehicle from the confiscation proceeding or to pay the sale proceeds of the vehicle after the order of confiscation in favour of Orissa State Financial Corporation when such vehicles were purchased on being financed by the Orissa State Financial Corporation and the loan had not been liquidated by the date of the seizure/confiscation of the vehicle. Concept of first charge or second charge has no applicability when the vehicle is not otherwise disposed of to determine the liabilities of the loanee. On the other hand the vehicle having been found indulged in forest offences was made subject matter of a confiscation proceedings, and therefore, the procedure followed for confiscation of the vehicle and for its sale is punitive in nature and not with a view to give benefit to anybody including the Department which initiated the confiscation proceeding. Apart from that, the claim of the Orissa State Financial Corporation as against its loanee (who had taken the vehicle on hire- purchase agreement) brings the loanee and the sureties within the default clause under the State Financial Corporation Act, 1951 or the heirs and successors of such persons. Procedure is provided in the Act, 1951 and the Rules thereof about the manner in which such loan is to be recovered, and in that context only the vehicle under the hire-purchase agreement is placed as the first charge. If such property is not available for any reason, then the loan is not automatically waived or the loanee and his sureties are not automatically redeemed of the liabilities to repay. The Financial Corporation is concerned with repayment of loan either from the property or persons offered as surety. Thus, a vehicle, which is subject matter of confiscation proceeding under the Act, 1872, being not available to the Orissa State Financial Corporation for adjustment of the unpaid loan, that does not at all bring out an anomalous situation so as to defeat the right of the Orissa State Financial Corporation. Agreement between the Orissa State Financial Corporation and the loanee is a pure and simple contract governed by the provisions of the Contract Act, 1872 read with the provisions in the Act, 1951 and its Rules. On the other hand, a confiscation proceeding under the Act, 1972 is punitive in nature for commission of a forest offence. Thus, by virtue of the provision in Section 56 read with Section 64 (2) of the Act, 1972, the action taken for confiscation of the vehicle cannot be extended to grant protection of the loan advanced by Orissa State Financial Corporation. By doing that it amounts to grant premium to the pick-pockets in as much as, by making payment of the confiscation amount in favour of the Orissa State Financial Corporation the loan burden of the accused of the forest offence is reduced to the extent of the sale proceeds of the vehicle. In other words, on payment of the sale proceeds of the confiscation proceeding to the Orissa State Financial Corporation towards discharge of the loan account of the accused of a forest offence, it would lead to a system to reward him by repayment of his loan. Then it does not become a penalty nor the action become punitive, but it remains as a reward to the accused of forest offence. Such a concept is totally not conceivable from any provision in the Act, 1972 or the Act, 1951. [AIR 2002 Orissa 130 Overruled]. -- STATE FINANCIAL CORPORATIONS ACT, 1951. 
Section 29; Discharge of loan  Orissa Forest Act (14 of 1972), Section 56  Confiscation of vehicle - Held, The Authorities under Section 56 of the Orissa Forest Act, 1972 are not obliged to release the vehicle from the confiscation proceeding or to pay the sale proceeds of the vehicle after the order of confiscation in favour of Orissa State Financial Corporation when such vehicles were purchased on being financed by the Orissa State Financial Corporation and the loan had not been liquidated by the date of the seizure/confiscation of the vehicle. Concept of first charge or second charge has no applicability when the vehicle is not otherwise disposed of to determine the liabilities of the loanee. On the other hand the vehicle having been found indulged in forest offences was made subject matter of a confiscation proceedings, and therefore, the procedure followed for confiscation of the vehicle and for its sale is punitive in nature and not with a view to give benefit to anybody including the Department which initiated the confiscation proceeding. Apart from that, the claim of the Orissa State Financial Corporation as against its loanee (who had taken the vehicle on hire- purchase agreement) brings the loanee and the sureties within the default clause under the State Financial Corporation Act, 1951 or the heirs and successors of such persons. Procedure is provided in the Act, 1951 and the Rules thereof about the manner in which such loan is to be recovered, and in that context only the vehicle under the hire-purchase agreement is placed as the first charge. If such property is not available for any reason, then the loan is not automatically waived or the loanee and his sureties are not automatically redeemed of the liabilities to repay. The Financial Corporation is concerned with repayment of loan either from the property or persons offered as surety. Thus, a vehicle, which is subject matter of confiscation proceeding under the Act, 1872, being not available to the Orissa State Financial Corporation for adjustment of the unpaid loan, that does not at all bring out an anomalous situation so as to defeat the right of the Orissa State Financial Corporation. Agreement between the Orissa State Financial Corporation and the loanee is a pure and simple contract governed by the provisions of the Contract Act, 1872 read with the provisions in the Act, 1951 and its Rules. On the other hand, a confiscation proceeding under the Act, 1972 is punitive in nature for commission of a forest offence. Thus, by virtue of the provision in Section 56 read with Section 64 (2) of the Act, 1972, the action taken for confiscation of the vehicle cannot be extended to grant protection of the loan advanced by Orissa State Financial Corporation. By doing that it amounts to grant premium to the pick-pockets in as much as, by making payment of the confiscation amount in favour of the Orissa State Financial Corporation the loan burden of the accused of the forest offence is reduced to the extent of the sale proceeds of the vehicle. In other words, on payment of the sale proceeds of the confiscation proceeding to the Orissa State Financial Corporation towards discharge of the loan account of the accused of a forest offence, it would lead to a system to reward him by repayment of his loan. Then it does not become a penalty nor the action become punitive, but it remains as a reward to the accused of forest offence. Such a concept is totally not conceivable from any provision in the Act, 1972 or the Act, 1951. [AIR 2002 Orissa 130 Overruled].  -  In that case, the stand of the Revenue was disapproved by the Orissa High Court. 16. Learned Counsel for the petitioner submitted that the photographs taken by the petitioner are not goods which can be sold and is not a marketable commodity like any other goods.',
			'caseanalysis' => null,
			'casesref' => 'Imagic Creative Pvt. Ltd. v. Commissioner of Commercial Taxes and Ors.;',
			'citingcases' => '',
			'counselplain' => '',
			'counseldef' => '',
			'court' => 'Orissa',
			'court_type' => 'HC',
			'decidedon' => '2008-04-02',
			'deposition' => '',
			'favorof' => null,
			'findings' => null,
			'judge' => ' A.K. Ganguly, C.J. and; B.N. Mahapatra, J.',
			'judgement' => '<p style="text-align: justify;">A.K. Ganguly, C.J.</p><p style="text-align: justify;">1. Initially three S.J.Cs. being S.J.C. Nos. 10 of 1997, 8 of 1997 and 9 of 1997 were filed and subsequently renumbered as STREV Nos. 212, 214 and 216 of 2007 respectively. In view of the common questions of facts and law, all the three Revision Applications are heard and disposed of together.</p><p style="text-align: justify;">2. The following questions of law arising out of the order passed by the Orissa Sales Tax Tribunal on 8.12.1993 in Second Appeal Nos. 3345 to 3350 of 1991-92 have been referred to this Hon'ble High Court in terms of the order of this Hon'ble Court dated 24.2.1997. The questions are:</p><p style="text-align: justify;">(i) Whether on the facts and in the circumstances of the case, the Tribunal is right to held that tax is exigible for photographs as execution of works contract ?</p><p style="text-align: justify;">(ii) Whether on the facts and in the circumstances of the case, the conclusion of the Tribunal is perverse due to non-consideration and mis-consideration of facts and law and, therefore, it is liable to be set aside for re-hearing ?</p><p style="text-align: justify;">3. The materials facts out of which those questions arise are that the petitioner carries on the business of processing and developing photography. In the usual course of business, the petitioner takes photographs of persons or of family and then develops the negative by employing his skill and labour and then supplies the photographs to the clients. These photographs which are prepared by the petitioner are not commercial items because they are neither purchased nor sold. However, to develop these photographs employment of skill and labour is essential. It may be mentioned that petitioner does not carry on any sale of photographs of national leaders, God and Goddess.</p><p style="text-align: justify;">4. After the passing of 46th amendment of the Constitution of India and consequent amendments thereto in Orissa Sales Tax Act (OST Act), the Sales Tax Officer, Bhubaneswar-II Circle, Bhubaneswar sent notices to assess the petitioner as an unregistered dealer under Section 12 (5) of the OST Act, inter alia, contending that the petitioner's activities can be called 'works contract'. Pursuant to said notice, the petitioner gave its reply and appeared before the Sales Tax Officer and produced the books of account and documents including Receipts, Purchase Memos, Vouchers, Ledger and thereby denied its liability under the OST Act. The petitioner also submitted objection petitions on various dates i.e. 28.12.1985, 10.1.1986, 20.2.1986 and 29.2.1988 contending, inter alia, that the petitioner has no sales tax liability under OST Act and the notices, which were issued, are without jurisdiction.</p><p style="text-align: justify;">5. Ignoring the said objections of the petitioner, the Sales Tax Officer, Bhubaneswar-II Circle, Bhubaneswar assessed the petitioner as an unregistered dealer, inter alia, holding that the petitioner is liable to pay sales tax as petitioner has been alleged to carry activities of 'works contract'. Therefore, orders of assessment being dated 29.2.1988 for the years 1984-85 (9/84 to 3/85), 1985-86 and 1986- 87 under Section 12(5) of OST Act and under Rule 5 of the Orissa Additional Sales Tax Rules, 1975 were passed and a tax of Rs. 20,765.00 and penalty of Rs. 5,000.00 totalling to Rs. 25,765.00 was imposed on the petitioner. The petitioner then filed the First Appeal before the learned Assistant Commissioner of Sales Tax. The First Appellate Authority by an order dated 27.9.1991 confirmed the levy of tax under the OST Act, but reduced the penalty to Rs. 1250.00. Thereupon, the petitioner filed the Second Appeal before the Orissa Sales Tax Tribunal, Cuttack. The said Tribunal heard the Second Appeal and in course of hearing, the petitioner raised various contentions. Ultimately, the Tribunal upheld the levy of tax but deleted the penalty.</p><p style="text-align: justify;">6. Thereafter the petitioner came up with a reference application under Section 24(1) of the Orissa Sales Tax Act framing certain questions for being referred to the Hon'ble High Court. The said prayer of the petitioner was rejected by the Tribunal. Then the petitioner moved Hon'ble High Court under Section 24(2)(b) of the Orissa Sales Tax Act, 1947 whereupon the High Court directed the Tribunal to state to case and refer the questions under Section 24(3) of the OST Act for a decision of the High Court.</p><p style="text-align: justify;">7. Accordingly, the Tribunal stated the case and referred the aforesaid questions for a decision of the High Court.</p><p style="text-align: justify;">8. Learned Counsel for the petitioner before the High Court submitted that in the transaction in question, there is no contract of sale between the petitioner and the client. It is only a contract of service and the photographs, which the petitioner produced by supplying the same has no commercial value and are not marketable. So, there is no question of a works contract. It is the consistent stand of the petitioner that the present photographs which are produced by the petitioner have no utility or value to any other person than the customer. By developing such photographs, the petitioner only renders service to his customers. The customer pays for the service rendered by the petitioner. It is the contention of the petitioner that his activity is similar to that of consulting firm preparing plan and sketches pursuant to client's specification or professional giving opinion on papers. All those activities are done to serve the client. Therefore, this does not come within the purview of the definition of 'goods', 'sale', 'dealer' or 'works contract'. It is the petitioner's case that he purchased the goods, namely, papers on payment of sales tax. Further levy of tax on the personal service rendered to the client of the petitioner will amount to double taxation. It is also the contention of the petitioner that the paper which is used in the photography are incidental and insignificant.</p><p style="text-align: justify;">9. In support of its contention, learned Counsel for the petitioner has relied on several judgments. First reliance was place on the judgment of the Supreme Court in the case of Sales Tax Officer v. B.C. Kame reported in 39 STC 237(SC). At page 241 of the report, learned Judges of the Supreme Court held that a photographer takes the photograph and develops the negatives and does other photographic work and thereafter supplies the prints to his client. By doing so he cannot be said to enter into a contract for sale of goods. On the other hand, the contract is for use of skill and labour by the photographer to bring about the desired result. Learned Judges held that the job of a photographer is a contract for work and labour and it is not a contract of sale.</p><p style="text-align: justify;">10. Reliance was also placed on a judgment of this High Court in the case of Photo Emporium v. Addl. District Magistrate reported in 77 STC 199 in which this High Court followed the ratio of the judgment of the Supreme Court in the case of B.C. Kame. In that case, the stand of the Revenue was disapproved by the Orissa High Court.</p><p style="text-align: justify;">11. Similar view was taken in 110 STC 145 in the case of Foto Colour Labs Pvt. Ltd. v. Commercial Taxes Officer where the Tribunal held that the transfer of paper in the photograph is purely incidental and payment is only taken to give positive prints and not to get the photo papers. Therefore, the contract in between the petitioner and his client is not a contract of sale, and neither directly or indirectly works contract is involved in the supply of photo papers. Similar view was taken by the West Bengal Taxation Tribunal in the case of Studio Kamalalaya v. Commercial Tax Officer reported in 89 STC 307.</p><p style="text-align: justify;">12. In the case of Bavens v. Onion of India report in 97 STC 161, learned Judges held that when a photographer takes a photograph of his customer, he develops the negative and supplies positive prints in the desired size to the customer. In doing so the photographer uses his own camera and his own film. The negative belongs to the photographer and not to the customer. No basic goods are provided by the customer which are subjected to processing by the photographer so as to make the contract a works contract. There is no accretion to goods or property or the nucleus of a property which belongs to the customer. It is the skill of the photographer which is most important to get the desired result.</p><p style="text-align: justify;">13. Hon'ble Karnataka High Court followed the same principle in the case of Keshoram Surlndranath Photo-mag Pvt. Ltd. v. Assistant Commissioner of Commercial Taxes reported in 121 STC 175. In that judgment, learned Judges of the Karnataka High Court relied on the judgment of the Supreme Court in B.C. Kame's case and came to the conclusion that in the job of the photographer in supplying positive prints to his customer, no works contract is involved and photographs are not marketable or saleable commodity and as such no tax can be levied on it.</p><p style="text-align: justify;">14. Against the said judgment of the Karnataka High Court, the State of Karnataka High Court filed a S.L.P. before the Hon'ble Supreme Court bearing SLP Nos. 6136-6163 of 2000 and the Hon'ble Supreme Court dismissed the SLP on 20th April, 2000.</p><p style="text-align: justify;">15. In the case of Rainbow Colour Lab v. State of M.P. learned Judges of the Hon'ble Supreme Court reiterated its judgment in B.C. Kame's case and came to the following conclusion:</p><p style="text-align: justify;">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.</p><p style="text-align: justify;">Hon'ble Supreme Court in Bharat Sanchar Nigam Ltd. v. Union of India reported in 145 STC 91 again reiterated the principle in B.C. Kame's case and held that the work done by the photographer is only in the nature of a service contract not involving any sale of goods and held that the stand taken by the State cannot be sustained.</p><p style="text-align: justify;">16. Learned Counsel for the petitioner submitted that the photographs taken by the petitioner are not goods which can be sold and is not a marketable commodity like any other goods. When the copies of photographs are made out, they have no utility or value to any other person than the customer. It is already admitted that the papers utilized for photographs are tax paid goods. Therefore, it is contended by the learned Counsel for the petitioner that the work of photography does not come within the purview of works contract as defined in Section 2(jj) of the Orissa Sales Tax Act.</p><p style="text-align: justify;">17. Learned Counsel for the Revenue in this case virtually did not contest the submission made by the learned Counsel for the petitioner and in support of his contention, learned Counsel for the Revenue relied on a decision of the Supreme Court in the case of Imagic Creative Pvt. Ltd. v. Commissioner of Commercial Taxes and Ors. reported in (2008) 10 RC 236. In that judgment, learned Judges held that since the contract in question is a service contract, it is difficult to hold that in a case of this nature, sales tax would be payable on the value of the entire contract irrespective of the element of service provided.</p><p style="text-align: justify;">For the reasons discussed above, we answer the first question in the negative and the second question, in the affirmative. We thus answer both the questions in favour of the assessee and against the Revenue.</p><p style="text-align: justify;">The three revision applications are thus disposed of.</p><p style="text-align: justify;">No costs.</p><p style="text-align: justify;">B.N. Mahapatra, J.</p><p style="text-align: justify;">18. I agree.<p style="text-align: justify;"></p><p style="text-align: justify;">',
			'observations' => null,
			'overruledby' => null,
			'prhistory' => '',
			'pubs' => '106(2008)CLT317; 2008(I)OLR953; (2008)17VST289(Orissa)',
			'ratiodecidendi' => '',
			'respondent' => 'Commissioner of Sales Tax',
			'sub' => 'Sales Tax/VAT',
			'link' => null,
			'circuit' => null
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$title_for_layout = 'Studio Sujata Vs Commissioner of Sales Tax - Citation 531271 - Court Judgment | '
$desc = array(
	'Judgement' => array(
		'id' => '531271',
		'acts' => '',
		'appealno' => '',
		'appellant' => 'Studio Sujata',
		'authreffered' => '',
		'casename' => 'Studio Sujata Vs. Commissioner of Sales Tax',
		'casenote' => 'Sales Tax - Assessment - Contract of Sale - Section 12 (5) of Orissa Sales Tax 1947 - Petitioner carries on business of processing and developing photography - Revenue assessed petitioner under Section 12(5) of Act on ground that activities of petitioner can be called works contract - Petitioner approached to Assistant of Sales Tax on ground that there is no contract of sale between the petitioner and the client, it is only service - Dismissed and affirmed by Tribunal - Hence present petition - Whether Tribunal is right to held that tax is exigible for photographs as execution of works contract or not? - Held, as per precedent laid down by Supreme Court in case of Sales Tax Officer v. B.C. Kame that photographer takes photograph and develops negatives and does other photographic work and thereafter supplies prints to his client - By doing so he cannot be said to enter into contract for sale of goods - Therefore, job of photographer is contract for work and labour and it is not contract of sale - Revenue committed mistake in assessing petitioner under Section 12(5) of Act on basis of contract of sale - Petition disposed of accordingly  - STATE FINANCIAL CORPORATIONS ACT, 1951 [63/1951]. Section 29; [P.K. Tripathy, A.K. Parichha & N.Prusty, JJ] Discharge of loan  Orissa Forest Act (14 of 1972), Section 56  Confiscation of vehicle - Held, The Authorities under Section 56 of the Orissa Forest Act, 1972 are not obliged to release the vehicle from the confiscation proceeding or to pay the sale proceeds of the vehicle after the order of confiscation in favour of Orissa State Financial Corporation when such vehicles were purchased on being financed by the Orissa State Financial Corporation and the loan had not been liquidated by the date of the seizure/confiscation of the vehicle. Concept of first charge or second charge has no applicability when the vehicle is not otherwise disposed of to determine the liabilities of the loanee. On the other hand the vehicle having been found indulged in forest offences was made subject matter of a confiscation proceedings, and therefore, the procedure followed for confiscation of the vehicle and for its sale is punitive in nature and not with a view to give benefit to anybody including the Department which initiated the confiscation proceeding. Apart from that, the claim of the Orissa State Financial Corporation as against its loanee (who had taken the vehicle on hire- purchase agreement) brings the loanee and the sureties within the default clause under the State Financial Corporation Act, 1951 or the heirs and successors of such persons. Procedure is provided in the Act, 1951 and the Rules thereof about the manner in which such loan is to be recovered, and in that context only the vehicle under the hire-purchase agreement is placed as the first charge. If such property is not available for any reason, then the loan is not automatically waived or the loanee and his sureties are not automatically redeemed of the liabilities to repay. The Financial Corporation is concerned with repayment of loan either from the property or persons offered as surety. Thus, a vehicle, which is subject matter of confiscation proceeding under the Act, 1872, being not available to the Orissa State Financial Corporation for adjustment of the unpaid loan, that does not at all bring out an anomalous situation so as to defeat the right of the Orissa State Financial Corporation. Agreement between the Orissa State Financial Corporation and the loanee is a pure and simple contract governed by the provisions of the Contract Act, 1872 read with the provisions in the Act, 1951 and its Rules. On the other hand, a confiscation proceeding under the Act, 1972 is punitive in nature for commission of a forest offence. Thus, by virtue of the provision in Section 56 read with Section 64 (2) of the Act, 1972, the action taken for confiscation of the vehicle cannot be extended to grant protection of the loan advanced by Orissa State Financial Corporation. By doing that it amounts to grant premium to the pick-pockets in as much as, by making payment of the confiscation amount in favour of the Orissa State Financial Corporation the loan burden of the accused of the forest offence is reduced to the extent of the sale proceeds of the vehicle. In other words, on payment of the sale proceeds of the confiscation proceeding to the Orissa State Financial Corporation towards discharge of the loan account of the accused of a forest offence, it would lead to a system to reward him by repayment of his loan. Then it does not become a penalty nor the action become punitive, but it remains as a reward to the accused of forest offence. Such a concept is totally not conceivable from any provision in the Act, 1972 or the Act, 1951. [AIR 2002 Orissa 130 Overruled]. -- STATE FINANCIAL CORPORATIONS ACT, 1951. 
Section 29; Discharge of loan  Orissa Forest Act (14 of 1972), Section 56  Confiscation of vehicle - Held, The Authorities under Section 56 of the Orissa Forest Act, 1972 are not obliged to release the vehicle from the confiscation proceeding or to pay the sale proceeds of the vehicle after the order of confiscation in favour of Orissa State Financial Corporation when such vehicles were purchased on being financed by the Orissa State Financial Corporation and the loan had not been liquidated by the date of the seizure/confiscation of the vehicle. Concept of first charge or second charge has no applicability when the vehicle is not otherwise disposed of to determine the liabilities of the loanee. On the other hand the vehicle having been found indulged in forest offences was made subject matter of a confiscation proceedings, and therefore, the procedure followed for confiscation of the vehicle and for its sale is punitive in nature and not with a view to give benefit to anybody including the Department which initiated the confiscation proceeding. Apart from that, the claim of the Orissa State Financial Corporation as against its loanee (who had taken the vehicle on hire- purchase agreement) brings the loanee and the sureties within the default clause under the State Financial Corporation Act, 1951 or the heirs and successors of such persons. Procedure is provided in the Act, 1951 and the Rules thereof about the manner in which such loan is to be recovered, and in that context only the vehicle under the hire-purchase agreement is placed as the first charge. If such property is not available for any reason, then the loan is not automatically waived or the loanee and his sureties are not automatically redeemed of the liabilities to repay. The Financial Corporation is concerned with repayment of loan either from the property or persons offered as surety. Thus, a vehicle, which is subject matter of confiscation proceeding under the Act, 1872, being not available to the Orissa State Financial Corporation for adjustment of the unpaid loan, that does not at all bring out an anomalous situation so as to defeat the right of the Orissa State Financial Corporation. Agreement between the Orissa State Financial Corporation and the loanee is a pure and simple contract governed by the provisions of the Contract Act, 1872 read with the provisions in the Act, 1951 and its Rules. On the other hand, a confiscation proceeding under the Act, 1972 is punitive in nature for commission of a forest offence. Thus, by virtue of the provision in Section 56 read with Section 64 (2) of the Act, 1972, the action taken for confiscation of the vehicle cannot be extended to grant protection of the loan advanced by Orissa State Financial Corporation. By doing that it amounts to grant premium to the pick-pockets in as much as, by making payment of the confiscation amount in favour of the Orissa State Financial Corporation the loan burden of the accused of the forest offence is reduced to the extent of the sale proceeds of the vehicle. In other words, on payment of the sale proceeds of the confiscation proceeding to the Orissa State Financial Corporation towards discharge of the loan account of the accused of a forest offence, it would lead to a system to reward him by repayment of his loan. Then it does not become a penalty nor the action become punitive, but it remains as a reward to the accused of forest offence. Such a concept is totally not conceivable from any provision in the Act, 1972 or the Act, 1951. [AIR 2002 Orissa 130 Overruled].  -  In that case, the stand of the Revenue was disapproved by the Orissa High Court. 16. Learned Counsel for the petitioner submitted that the photographs taken by the petitioner are not goods which can be sold and is not a marketable commodity like any other goods.',
		'caseanalysis' => null,
		'casesref' => 'Imagic Creative Pvt. Ltd. v. Commissioner of Commercial Taxes and Ors.;',
		'citingcases' => '',
		'counselplain' => '',
		'counseldef' => '',
		'court' => 'Orissa',
		'court_type' => 'HC',
		'decidedon' => '2008-04-02',
		'deposition' => '',
		'favorof' => null,
		'findings' => null,
		'judge' => ' A.K. Ganguly, C.J. and; B.N. Mahapatra, J.',
		'judgement' => '<p>A.K. Ganguly, C.J.</p><p>1. Initially three S.J.Cs. being S.J.C. Nos. 10 of 1997, 8 of 1997 and 9 of 1997 were filed and subsequently renumbered as STREV Nos. 212, 214 and 216 of 2007 respectively. In view of the common questions of facts and law, all the three Revision Applications are heard and disposed of together.</p><p>2. The following questions of law arising out of the order passed by the Orissa Sales Tax Tribunal on 8.12.1993 in Second Appeal Nos. 3345 to 3350 of 1991-92 have been referred to this Hon'ble High Court in terms of the order of this Hon'ble Court dated 24.2.1997. The questions are:</p><p>(i) Whether on the facts and in the circumstances of the case, the Tribunal is right to held that tax is exigible for photographs as execution of works contract ?</p><p>(ii) Whether on the facts and in the circumstances of the case, the conclusion of the Tribunal is perverse due to non-consideration and mis-consideration of facts and law and, therefore, it is liable to be set aside for re-hearing ?</p><p>3. The materials facts out of which those questions arise are that the petitioner carries on the business of processing and developing photography. In the usual course of business, the petitioner takes photographs of persons or of family and then develops the negative by employing his skill and labour and then supplies the photographs to the clients. These photographs which are prepared by the petitioner are not commercial items because they are neither purchased nor sold. However, to develop these photographs employment of skill and labour is essential. It may be mentioned that petitioner does not carry on any sale of photographs of national leaders, God and Goddess.</p><p>4. After the passing of 46th amendment of the Constitution of India and consequent amendments thereto in Orissa Sales Tax Act (OST Act), the Sales Tax Officer, Bhubaneswar-II Circle, Bhubaneswar sent notices to assess the petitioner as an unregistered dealer under Section 12 (5) of the OST Act, inter alia, contending that the petitioner's activities can be called 'works contract'. Pursuant to said notice, the petitioner gave its reply and appeared before the Sales Tax Officer and produced the books of account and documents including Receipts, Purchase Memos, Vouchers, Ledger and thereby denied its liability under the OST Act. The petitioner also submitted objection petitions on various dates i.e. 28.12.1985, 10.1.1986, 20.2.1986 and 29.2.1988 contending, inter alia, that the petitioner has no sales tax liability under OST Act and the notices, which were issued, are without jurisdiction.</p><p>5. Ignoring the said objections of the petitioner, the Sales Tax Officer, Bhubaneswar-II Circle, Bhubaneswar assessed the petitioner as an unregistered dealer, inter alia, holding that the petitioner is liable to pay sales tax as petitioner has been alleged to carry activities of 'works contract'. Therefore, orders of assessment being dated 29.2.1988 for the years 1984-85 (9/84 to 3/85), 1985-86 and 1986- 87 under Section 12(5) of OST Act and under Rule 5 of the Orissa Additional Sales Tax Rules, 1975 were passed and a tax of Rs. 20,765.00 and penalty of Rs. 5,000.00 totalling to Rs. 25,765.00 was imposed on the petitioner. The petitioner then filed the First Appeal before the learned Assistant Commissioner of Sales Tax. The First Appellate Authority by an order dated 27.9.1991 confirmed the levy of tax under the OST Act, but reduced the penalty to Rs. 1250.00. Thereupon, the petitioner filed the Second Appeal before the Orissa Sales Tax Tribunal, Cuttack. The said Tribunal heard the Second Appeal and in course of hearing, the petitioner raised various contentions. Ultimately, the Tribunal upheld the levy of tax but deleted the penalty.</p><p>6. Thereafter the petitioner came up with a reference application under Section 24(1) of the Orissa Sales Tax Act framing certain questions for being referred to the Hon'ble High Court. The said prayer of the petitioner was rejected by the Tribunal. Then the petitioner moved Hon'ble High Court under Section 24(2)(b) of the Orissa Sales Tax Act, 1947 whereupon the High Court directed the Tribunal to state to case and refer the questions under Section 24(3) of the OST Act for a decision of the High Court.</p><p>7. Accordingly, the Tribunal stated the case and referred the aforesaid questions for a decision of the High Court.</p><p>8. Learned Counsel for the petitioner before the High Court submitted that in the transaction in question, there is no contract of sale between the petitioner and the client. It is only a contract of service and the photographs, which the petitioner produced by supplying the same has no commercial value and are not marketable. So, there is no question of a works contract. It is the consistent stand of the petitioner that the present photographs which are produced by the petitioner have no utility or value to any other person than the customer. By developing such photographs, the petitioner only renders service to his customers. The customer pays for the service rendered by the petitioner. It is the contention of the petitioner that his activity is similar to that of consulting firm preparing plan and sketches pursuant to client's specification or professional giving opinion on papers. All those activities are done to serve the client. Therefore, this does not come within the purview of the definition of 'goods', 'sale', 'dealer' or 'works contract'. It is the petitioner's case that he purchased the goods, namely, papers on payment of sales tax. Further levy of tax on the personal service rendered to the client of the petitioner will amount to double taxation. It is also the contention of the petitioner that the paper which is used in the photography are incidental and insignificant.</p><p>9. In support of its contention, learned Counsel for the petitioner has relied on several judgments. First reliance was place on the judgment of the Supreme Court in the case of Sales Tax Officer v. B.C. Kame reported in 39 STC 237(SC). At page 241 of the report, learned Judges of the Supreme Court held that a photographer takes the photograph and develops the negatives and does other photographic work and thereafter supplies the prints to his client. By doing so he cannot be said to enter into a contract for sale of goods. On the other hand, the contract is for use of skill and labour by the photographer to bring about the desired result. Learned Judges held that the job of a photographer is a contract for work and labour and it is not a contract of sale.</p><p>10. Reliance was also placed on a judgment of this High Court in the case of Photo Emporium v. Addl. District Magistrate reported in 77 STC 199 in which this High Court followed the ratio of the judgment of the Supreme Court in the case of B.C. Kame. In that case, the stand of the Revenue was disapproved by the Orissa High Court.</p><p>11. Similar view was taken in 110 STC 145 in the case of Foto Colour Labs Pvt. Ltd. v. Commercial Taxes Officer where the Tribunal held that the transfer of paper in the photograph is purely incidental and payment is only taken to give positive prints and not to get the photo papers. Therefore, the contract in between the petitioner and his client is not a contract of sale, and neither directly or indirectly works contract is involved in the supply of photo papers. Similar view was taken by the West Bengal Taxation Tribunal in the case of Studio Kamalalaya v. Commercial Tax Officer reported in 89 STC 307.</p><p>12. In the case of Bavens v. Onion of India report in 97 STC 161, learned Judges held that when a photographer takes a photograph of his customer, he develops the negative and supplies positive prints in the desired size to the customer. In doing so the photographer uses his own camera and his own film. The negative belongs to the photographer and not to the customer. No basic goods are provided by the customer which are subjected to processing by the photographer so as to make the contract a works contract. There is no accretion to goods or property or the nucleus of a property which belongs to the customer. It is the skill of the photographer which is most important to get the desired result.</p><p>13. Hon'ble Karnataka High Court followed the same principle in the case of Keshoram Surlndranath Photo-mag Pvt. Ltd. v. Assistant Commissioner of Commercial Taxes reported in 121 STC 175. In that judgment, learned Judges of the Karnataka High Court relied on the judgment of the Supreme Court in B.C. Kame's case and came to the conclusion that in the job of the photographer in supplying positive prints to his customer, no works contract is involved and photographs are not marketable or saleable commodity and as such no tax can be levied on it.</p><p>14. Against the said judgment of the Karnataka High Court, the State of Karnataka High Court filed a S.L.P. before the Hon'ble Supreme Court bearing SLP Nos. 6136-6163 of 2000 and the Hon'ble Supreme Court dismissed the SLP on 20th April, 2000.</p><p>15. In the case of Rainbow Colour Lab v. State of M.P. learned Judges of the Hon'ble Supreme Court reiterated its judgment in B.C. Kame's case and came to the following conclusion:</p><p>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.</p><p>Hon'ble Supreme Court in Bharat Sanchar Nigam Ltd. v. Union of India reported in 145 STC 91 again reiterated the principle in B.C. Kame's case and held that the work done by the photographer is only in the nature of a service contract not involving any sale of goods and held that the stand taken by the State cannot be sustained.</p><p>16. Learned Counsel for the petitioner submitted that the photographs taken by the petitioner are not goods which can be sold and is not a marketable commodity like any other goods. When the copies of photographs are made out, they have no utility or value to any other person than the customer. It is already admitted that the papers utilized for photographs are tax paid goods. Therefore, it is contended by the learned Counsel for the petitioner that the work of photography does not come within the purview of works contract as defined in Section 2(jj) of the Orissa Sales Tax Act.</p><p>17. Learned Counsel for the Revenue in this case virtually did not contest the submission made by the learned Counsel for the petitioner and in support of his contention, learned Counsel for the Revenue relied on a decision of the Supreme Court in the case of Imagic Creative Pvt. Ltd. v. Commissioner of Commercial Taxes and Ors. reported in (2008) 10 RC 236. In that judgment, learned Judges held that since the contract in question is a service contract, it is difficult to hold that in a case of this nature, sales tax would be payable on the value of the entire contract irrespective of the element of service provided.</p><p>For the reasons discussed above, we answer the first question in the negative and the second question, in the affirmative. We thus answer both the questions in favour of the assessee and against the Revenue.</p><p>The three revision applications are thus disposed of.</p><p>No costs.</p><p>B.N. Mahapatra, J.</p><p>18. I agree.<p></p><p>',
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	(int) 0 => '<p>A.K. Ganguly, C.J.',
	(int) 1 => '<p>1. Initially three S.J.Cs. being S.J.C. Nos. 10 of 1997, 8 of 1997 and 9 of 1997 were filed and subsequently renumbered as STREV Nos. 212, 214 and 216 of 2007 respectively. In view of the common questions of facts and law, all the three Revision Applications are heard and disposed of together.',
	(int) 2 => '<p>2. The following questions of law arising out of the order passed by the Orissa Sales Tax Tribunal on 8.12.1993 in Second Appeal Nos. 3345 to 3350 of 1991-92 have been referred to this Hon'ble High Court in terms of the order of this Hon'ble Court dated 24.2.1997. The questions are:',
	(int) 3 => '<p>(i) Whether on the facts and in the circumstances of the case, the Tribunal is right to held that tax is exigible for photographs as execution of works contract ?',
	(int) 4 => '<p>(ii) Whether on the facts and in the circumstances of the case, the conclusion of the Tribunal is perverse due to non-consideration and mis-consideration of facts and law and, therefore, it is liable to be set aside for re-hearing ?',
	(int) 5 => '<p>3. The materials facts out of which those questions arise are that the petitioner carries on the business of processing and developing photography. In the usual course of business, the petitioner takes photographs of persons or of family and then develops the negative by employing his skill and labour and then supplies the photographs to the clients. These photographs which are prepared by the petitioner are not commercial items because they are neither purchased nor sold. However, to develop these photographs employment of skill and labour is essential. It may be mentioned that petitioner does not carry on any sale of photographs of national leaders, God and Goddess.',
	(int) 6 => '<p>4. After the passing of 46th amendment of the Constitution of India and consequent amendments thereto in Orissa Sales Tax Act (OST Act), the Sales Tax Officer, Bhubaneswar-II Circle, Bhubaneswar sent notices to assess the petitioner as an unregistered dealer under Section 12 (5) of the OST Act, inter alia, contending that the petitioner's activities can be called 'works contract'. Pursuant to said notice, the petitioner gave its reply and appeared before the Sales Tax Officer and produced the books of account and documents including Receipts, Purchase Memos, Vouchers, Ledger and thereby denied its liability under the OST Act. The petitioner also submitted objection petitions on various dates i.e. 28.12.1985, 10.1.1986, 20.2.1986 and 29.2.1988 contending, inter alia, that the petitioner has no sales tax liability under OST Act and the notices, which were issued, are without jurisdiction.',
	(int) 7 => '<p>5. Ignoring the said objections of the petitioner, the Sales Tax Officer, Bhubaneswar-II Circle, Bhubaneswar assessed the petitioner as an unregistered dealer, inter alia, holding that the petitioner is liable to pay sales tax as petitioner has been alleged to carry activities of 'works contract'. Therefore, orders of assessment being dated 29.2.1988 for the years 1984-85 (9/84 to 3/85), 1985-86 and 1986- 87 under Section 12(5) of OST Act and under Rule 5 of the Orissa Additional Sales Tax Rules, 1975 were passed and a tax of Rs. 20,765.00 and penalty of Rs. 5,000.00 totalling to Rs. 25,765.00 was imposed on the petitioner. The petitioner then filed the First Appeal before the learned Assistant Commissioner of Sales Tax. The First Appellate Authority by an order dated 27.9.1991 confirmed the levy of tax under the OST Act, but reduced the penalty to Rs. 1250.00. Thereupon, the petitioner filed the Second Appeal before the Orissa Sales Tax Tribunal, Cuttack. The said Tribunal heard the Second Appeal and in course of hearing, the petitioner raised various contentions. Ultimately, the Tribunal upheld the levy of tax but deleted the penalty.',
	(int) 8 => '<p>6. Thereafter the petitioner came up with a reference application under Section 24(1) of the Orissa Sales Tax Act framing certain questions for being referred to the Hon'ble High Court. The said prayer of the petitioner was rejected by the Tribunal. Then the petitioner moved Hon'ble High Court under Section 24(2)(b) of the Orissa Sales Tax Act, 1947 whereupon the High Court directed the Tribunal to state to case and refer the questions under Section 24(3) of the OST Act for a decision of the High Court.',
	(int) 9 => '<p>7. Accordingly, the Tribunal stated the case and referred the aforesaid questions for a decision of the High Court.',
	(int) 10 => '<p>8. Learned Counsel for the petitioner before the High Court submitted that in the transaction in question, there is no contract of sale between the petitioner and the client. It is only a contract of service and the photographs, which the petitioner produced by supplying the same has no commercial value and are not marketable. So, there is no question of a works contract. It is the consistent stand of the petitioner that the present photographs which are produced by the petitioner have no utility or value to any other person than the customer. By developing such photographs, the petitioner only renders service to his customers. The customer pays for the service rendered by the petitioner. It is the contention of the petitioner that his activity is similar to that of consulting firm preparing plan and sketches pursuant to client's specification or professional giving opinion on papers. All those activities are done to serve the client. Therefore, this does not come within the purview of the definition of 'goods', 'sale', 'dealer' or 'works contract'. It is the petitioner's case that he purchased the goods, namely, papers on payment of sales tax. Further levy of tax on the personal service rendered to the client of the petitioner will amount to double taxation. It is also the contention of the petitioner that the paper which is used in the photography are incidental and insignificant.',
	(int) 11 => '<p>9. In support of its contention, learned Counsel for the petitioner has relied on several judgments. First reliance was place on the judgment of the Supreme Court in the case of Sales Tax Officer v. B.C. Kame reported in 39 STC 237(SC). At page 241 of the report, learned Judges of the Supreme Court held that a photographer takes the photograph and develops the negatives and does other photographic work and thereafter supplies the prints to his client. By doing so he cannot be said to enter into a contract for sale of goods. On the other hand, the contract is for use of skill and labour by the photographer to bring about the desired result. Learned Judges held that the job of a photographer is a contract for work and labour and it is not a contract of sale.',
	(int) 12 => '<p>10. Reliance was also placed on a judgment of this High Court in the case of Photo Emporium v. Addl. District Magistrate reported in 77 STC 199 in which this High Court followed the ratio of the judgment of the Supreme Court in the case of B.C. Kame. In that case, the stand of the Revenue was disapproved by the Orissa High Court.',
	(int) 13 => '<p>11. Similar view was taken in 110 STC 145 in the case of Foto Colour Labs Pvt. Ltd. v. Commercial Taxes Officer where the Tribunal held that the transfer of paper in the photograph is purely incidental and payment is only taken to give positive prints and not to get the photo papers. Therefore, the contract in between the petitioner and his client is not a contract of sale, and neither directly or indirectly works contract is involved in the supply of photo papers. Similar view was taken by the West Bengal Taxation Tribunal in the case of Studio Kamalalaya v. Commercial Tax Officer reported in 89 STC 307.',
	(int) 14 => '<p>12. In the case of Bavens v. Onion of India report in 97 STC 161, learned Judges held that when a photographer takes a photograph of his customer, he develops the negative and supplies positive prints in the desired size to the customer. In doing so the photographer uses his own camera and his own film. The negative belongs to the photographer and not to the customer. No basic goods are provided by the customer which are subjected to processing by the photographer so as to make the contract a works contract. There is no accretion to goods or property or the nucleus of a property which belongs to the customer. It is the skill of the photographer which is most important to get the desired result.',
	(int) 15 => '<p>13. Hon'ble Karnataka High Court followed the same principle in the case of Keshoram Surlndranath Photo-mag Pvt. Ltd. v. Assistant Commissioner of Commercial Taxes reported in 121 STC 175. In that judgment, learned Judges of the Karnataka High Court relied on the judgment of the Supreme Court in B.C. Kame's case and came to the conclusion that in the job of the photographer in supplying positive prints to his customer, no works contract is involved and photographs are not marketable or saleable commodity and as such no tax can be levied on it.',
	(int) 16 => '<p>14. Against the said judgment of the Karnataka High Court, the State of Karnataka High Court filed a S.L.P. before the Hon'ble Supreme Court bearing SLP Nos. 6136-6163 of 2000 and the Hon'ble Supreme Court dismissed the SLP on 20th April, 2000.',
	(int) 17 => '<p>15. In the case of Rainbow Colour Lab v. State of M.P. learned Judges of the Hon'ble Supreme Court reiterated its judgment in B.C. Kame's case and came to the following conclusion:',
	(int) 18 => '<p>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.',
	(int) 19 => '<p>Hon'ble Supreme Court in Bharat Sanchar Nigam Ltd. v. Union of India reported in 145 STC 91 again reiterated the principle in B.C. Kame's case and held that the work done by the photographer is only in the nature of a service contract not involving any sale of goods and held that the stand taken by the State cannot be sustained.',
	(int) 20 => '<p>16. Learned Counsel for the petitioner submitted that the photographs taken by the petitioner are not goods which can be sold and is not a marketable commodity like any other goods. When the copies of photographs are made out, they have no utility or value to any other person than the customer. It is already admitted that the papers utilized for photographs are tax paid goods. Therefore, it is contended by the learned Counsel for the petitioner that the work of photography does not come within the purview of works contract as defined in Section 2(jj) of the Orissa Sales Tax Act.',
	(int) 21 => '<p>17. Learned Counsel for the Revenue in this case virtually did not contest the submission made by the learned Counsel for the petitioner and in support of his contention, learned Counsel for the Revenue relied on a decision of the Supreme Court in the case of Imagic Creative Pvt. Ltd. v. Commissioner of Commercial Taxes and Ors. reported in (2008) 10 RC 236. In that judgment, learned Judges held that since the contract in question is a service contract, it is difficult to hold that in a case of this nature, sales tax would be payable on the value of the entire contract irrespective of the element of service provided.',
	(int) 22 => '<p>For the reasons discussed above, we answer the first question in the negative and the second question, in the affirmative. We thus answer both the questions in favour of the assessee and against the Revenue.',
	(int) 23 => '<p>The three revision applications are thus disposed of.',
	(int) 24 => '<p>No costs.',
	(int) 25 => '<p>B.N. Mahapatra, J.',
	(int) 26 => '<p>18. I agree.<p>',
	(int) 27 => '<p>'
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11. Similar view was taken in 110 STC 145 in the case of Foto Colour Labs Pvt. Ltd. v. Commercial Taxes Officer where the Tribunal held that the transfer of paper in the photograph is purely incidental and payment is only taken to give positive prints and not to get the photo papers. Therefore, the contract in between the petitioner and his client is not a contract of sale, and neither directly or indirectly works contract is involved in the supply of photo papers. Similar view was taken by the West Bengal Taxation Tribunal in the case of Studio Kamalalaya v. Commercial Tax Officer reported in 89 STC 307.

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	'title_for_layout' => 'Studio Sujata Vs Commissioner of Sales Tax - Citation 531271 - Court Judgment | ',
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		'Judgement' => array(
			'id' => '531271',
			'acts' => '',
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			'appellant' => 'Studio Sujata',
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			'casename' => 'Studio Sujata Vs. Commissioner of Sales Tax',
			'casenote' => 'Sales Tax - Assessment - Contract of Sale - Section 12 (5) of Orissa Sales Tax 1947 - Petitioner carries on business of processing and developing photography - Revenue assessed petitioner under Section 12(5) of Act on ground that activities of petitioner can be called works contract - Petitioner approached to Assistant of Sales Tax on ground that there is no contract of sale between the petitioner and the client, it is only service - Dismissed and affirmed by Tribunal - Hence present petition - Whether Tribunal is right to held that tax is exigible for photographs as execution of works contract or not? - Held, as per precedent laid down by Supreme Court in case of Sales Tax Officer v. B.C. Kame that photographer takes photograph and develops negatives and does other photographic work and thereafter supplies prints to his client - By doing so he cannot be said to enter into contract for sale of goods - Therefore, job of photographer is contract for work and labour and it is not contract of sale - Revenue committed mistake in assessing petitioner under Section 12(5) of Act on basis of contract of sale - Petition disposed of accordingly  - STATE FINANCIAL CORPORATIONS ACT, 1951 [63/1951]. Section 29; [P.K. Tripathy, A.K. Parichha & N.Prusty, JJ] Discharge of loan  Orissa Forest Act (14 of 1972), Section 56  Confiscation of vehicle - Held, The Authorities under Section 56 of the Orissa Forest Act, 1972 are not obliged to release the vehicle from the confiscation proceeding or to pay the sale proceeds of the vehicle after the order of confiscation in favour of Orissa State Financial Corporation when such vehicles were purchased on being financed by the Orissa State Financial Corporation and the loan had not been liquidated by the date of the seizure/confiscation of the vehicle. Concept of first charge or second charge has no applicability when the vehicle is not otherwise disposed of to determine the liabilities of the loanee. On the other hand the vehicle having been found indulged in forest offences was made subject matter of a confiscation proceedings, and therefore, the procedure followed for confiscation of the vehicle and for its sale is punitive in nature and not with a view to give benefit to anybody including the Department which initiated the confiscation proceeding. Apart from that, the claim of the Orissa State Financial Corporation as against its loanee (who had taken the vehicle on hire- purchase agreement) brings the loanee and the sureties within the default clause under the State Financial Corporation Act, 1951 or the heirs and successors of such persons. Procedure is provided in the Act, 1951 and the Rules thereof about the manner in which such loan is to be recovered, and in that context only the vehicle under the hire-purchase agreement is placed as the first charge. If such property is not available for any reason, then the loan is not automatically waived or the loanee and his sureties are not automatically redeemed of the liabilities to repay. The Financial Corporation is concerned with repayment of loan either from the property or persons offered as surety. Thus, a vehicle, which is subject matter of confiscation proceeding under the Act, 1872, being not available to the Orissa State Financial Corporation for adjustment of the unpaid loan, that does not at all bring out an anomalous situation so as to defeat the right of the Orissa State Financial Corporation. Agreement between the Orissa State Financial Corporation and the loanee is a pure and simple contract governed by the provisions of the Contract Act, 1872 read with the provisions in the Act, 1951 and its Rules. On the other hand, a confiscation proceeding under the Act, 1972 is punitive in nature for commission of a forest offence. Thus, by virtue of the provision in Section 56 read with Section 64 (2) of the Act, 1972, the action taken for confiscation of the vehicle cannot be extended to grant protection of the loan advanced by Orissa State Financial Corporation. By doing that it amounts to grant premium to the pick-pockets in as much as, by making payment of the confiscation amount in favour of the Orissa State Financial Corporation the loan burden of the accused of the forest offence is reduced to the extent of the sale proceeds of the vehicle. In other words, on payment of the sale proceeds of the confiscation proceeding to the Orissa State Financial Corporation towards discharge of the loan account of the accused of a forest offence, it would lead to a system to reward him by repayment of his loan. Then it does not become a penalty nor the action become punitive, but it remains as a reward to the accused of forest offence. Such a concept is totally not conceivable from any provision in the Act, 1972 or the Act, 1951. [AIR 2002 Orissa 130 Overruled]. -- STATE FINANCIAL CORPORATIONS ACT, 1951. 
Section 29; Discharge of loan  Orissa Forest Act (14 of 1972), Section 56  Confiscation of vehicle - Held, The Authorities under Section 56 of the Orissa Forest Act, 1972 are not obliged to release the vehicle from the confiscation proceeding or to pay the sale proceeds of the vehicle after the order of confiscation in favour of Orissa State Financial Corporation when such vehicles were purchased on being financed by the Orissa State Financial Corporation and the loan had not been liquidated by the date of the seizure/confiscation of the vehicle. Concept of first charge or second charge has no applicability when the vehicle is not otherwise disposed of to determine the liabilities of the loanee. On the other hand the vehicle having been found indulged in forest offences was made subject matter of a confiscation proceedings, and therefore, the procedure followed for confiscation of the vehicle and for its sale is punitive in nature and not with a view to give benefit to anybody including the Department which initiated the confiscation proceeding. Apart from that, the claim of the Orissa State Financial Corporation as against its loanee (who had taken the vehicle on hire- purchase agreement) brings the loanee and the sureties within the default clause under the State Financial Corporation Act, 1951 or the heirs and successors of such persons. Procedure is provided in the Act, 1951 and the Rules thereof about the manner in which such loan is to be recovered, and in that context only the vehicle under the hire-purchase agreement is placed as the first charge. If such property is not available for any reason, then the loan is not automatically waived or the loanee and his sureties are not automatically redeemed of the liabilities to repay. The Financial Corporation is concerned with repayment of loan either from the property or persons offered as surety. Thus, a vehicle, which is subject matter of confiscation proceeding under the Act, 1872, being not available to the Orissa State Financial Corporation for adjustment of the unpaid loan, that does not at all bring out an anomalous situation so as to defeat the right of the Orissa State Financial Corporation. Agreement between the Orissa State Financial Corporation and the loanee is a pure and simple contract governed by the provisions of the Contract Act, 1872 read with the provisions in the Act, 1951 and its Rules. On the other hand, a confiscation proceeding under the Act, 1972 is punitive in nature for commission of a forest offence. Thus, by virtue of the provision in Section 56 read with Section 64 (2) of the Act, 1972, the action taken for confiscation of the vehicle cannot be extended to grant protection of the loan advanced by Orissa State Financial Corporation. By doing that it amounts to grant premium to the pick-pockets in as much as, by making payment of the confiscation amount in favour of the Orissa State Financial Corporation the loan burden of the accused of the forest offence is reduced to the extent of the sale proceeds of the vehicle. In other words, on payment of the sale proceeds of the confiscation proceeding to the Orissa State Financial Corporation towards discharge of the loan account of the accused of a forest offence, it would lead to a system to reward him by repayment of his loan. Then it does not become a penalty nor the action become punitive, but it remains as a reward to the accused of forest offence. Such a concept is totally not conceivable from any provision in the Act, 1972 or the Act, 1951. [AIR 2002 Orissa 130 Overruled].  -  In that case, the stand of the Revenue was disapproved by the Orissa High Court. 16. Learned Counsel for the petitioner submitted that the photographs taken by the petitioner are not goods which can be sold and is not a marketable commodity like any other goods.',
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			'judge' => ' A.K. Ganguly, C.J. and; B.N. Mahapatra, J.',
			'judgement' => '<p style="text-align: justify;">A.K. Ganguly, C.J.</p><p style="text-align: justify;">1. Initially three S.J.Cs. being S.J.C. Nos. 10 of 1997, 8 of 1997 and 9 of 1997 were filed and subsequently renumbered as STREV Nos. 212, 214 and 216 of 2007 respectively. In view of the common questions of facts and law, all the three Revision Applications are heard and disposed of together.</p><p style="text-align: justify;">2. The following questions of law arising out of the order passed by the Orissa Sales Tax Tribunal on 8.12.1993 in Second Appeal Nos. 3345 to 3350 of 1991-92 have been referred to this Hon'ble High Court in terms of the order of this Hon'ble Court dated 24.2.1997. The questions are:</p><p style="text-align: justify;">(i) Whether on the facts and in the circumstances of the case, the Tribunal is right to held that tax is exigible for photographs as execution of works contract ?</p><p style="text-align: justify;">(ii) Whether on the facts and in the circumstances of the case, the conclusion of the Tribunal is perverse due to non-consideration and mis-consideration of facts and law and, therefore, it is liable to be set aside for re-hearing ?</p><p style="text-align: justify;">3. The materials facts out of which those questions arise are that the petitioner carries on the business of processing and developing photography. In the usual course of business, the petitioner takes photographs of persons or of family and then develops the negative by employing his skill and labour and then supplies the photographs to the clients. These photographs which are prepared by the petitioner are not commercial items because they are neither purchased nor sold. However, to develop these photographs employment of skill and labour is essential. It may be mentioned that petitioner does not carry on any sale of photographs of national leaders, God and Goddess.</p><p style="text-align: justify;">4. After the passing of 46th amendment of the Constitution of India and consequent amendments thereto in Orissa Sales Tax Act (OST Act), the Sales Tax Officer, Bhubaneswar-II Circle, Bhubaneswar sent notices to assess the petitioner as an unregistered dealer under Section 12 (5) of the OST Act, inter alia, contending that the petitioner's activities can be called 'works contract'. Pursuant to said notice, the petitioner gave its reply and appeared before the Sales Tax Officer and produced the books of account and documents including Receipts, Purchase Memos, Vouchers, Ledger and thereby denied its liability under the OST Act. The petitioner also submitted objection petitions on various dates i.e. 28.12.1985, 10.1.1986, 20.2.1986 and 29.2.1988 contending, inter alia, that the petitioner has no sales tax liability under OST Act and the notices, which were issued, are without jurisdiction.</p><p style="text-align: justify;">5. Ignoring the said objections of the petitioner, the Sales Tax Officer, Bhubaneswar-II Circle, Bhubaneswar assessed the petitioner as an unregistered dealer, inter alia, holding that the petitioner is liable to pay sales tax as petitioner has been alleged to carry activities of 'works contract'. Therefore, orders of assessment being dated 29.2.1988 for the years 1984-85 (9/84 to 3/85), 1985-86 and 1986- 87 under Section 12(5) of OST Act and under Rule 5 of the Orissa Additional Sales Tax Rules, 1975 were passed and a tax of Rs. 20,765.00 and penalty of Rs. 5,000.00 totalling to Rs. 25,765.00 was imposed on the petitioner. The petitioner then filed the First Appeal before the learned Assistant Commissioner of Sales Tax. The First Appellate Authority by an order dated 27.9.1991 confirmed the levy of tax under the OST Act, but reduced the penalty to Rs. 1250.00. Thereupon, the petitioner filed the Second Appeal before the Orissa Sales Tax Tribunal, Cuttack. The said Tribunal heard the Second Appeal and in course of hearing, the petitioner raised various contentions. Ultimately, the Tribunal upheld the levy of tax but deleted the penalty.</p><p style="text-align: justify;">6. Thereafter the petitioner came up with a reference application under Section 24(1) of the Orissa Sales Tax Act framing certain questions for being referred to the Hon'ble High Court. The said prayer of the petitioner was rejected by the Tribunal. Then the petitioner moved Hon'ble High Court under Section 24(2)(b) of the Orissa Sales Tax Act, 1947 whereupon the High Court directed the Tribunal to state to case and refer the questions under Section 24(3) of the OST Act for a decision of the High Court.</p><p style="text-align: justify;">7. Accordingly, the Tribunal stated the case and referred the aforesaid questions for a decision of the High Court.</p><p style="text-align: justify;">8. Learned Counsel for the petitioner before the High Court submitted that in the transaction in question, there is no contract of sale between the petitioner and the client. It is only a contract of service and the photographs, which the petitioner produced by supplying the same has no commercial value and are not marketable. So, there is no question of a works contract. It is the consistent stand of the petitioner that the present photographs which are produced by the petitioner have no utility or value to any other person than the customer. By developing such photographs, the petitioner only renders service to his customers. The customer pays for the service rendered by the petitioner. It is the contention of the petitioner that his activity is similar to that of consulting firm preparing plan and sketches pursuant to client's specification or professional giving opinion on papers. All those activities are done to serve the client. Therefore, this does not come within the purview of the definition of 'goods', 'sale', 'dealer' or 'works contract'. It is the petitioner's case that he purchased the goods, namely, papers on payment of sales tax. Further levy of tax on the personal service rendered to the client of the petitioner will amount to double taxation. It is also the contention of the petitioner that the paper which is used in the photography are incidental and insignificant.</p><p style="text-align: justify;">9. In support of its contention, learned Counsel for the petitioner has relied on several judgments. First reliance was place on the judgment of the Supreme Court in the case of Sales Tax Officer v. B.C. Kame reported in 39 STC 237(SC). At page 241 of the report, learned Judges of the Supreme Court held that a photographer takes the photograph and develops the negatives and does other photographic work and thereafter supplies the prints to his client. By doing so he cannot be said to enter into a contract for sale of goods. On the other hand, the contract is for use of skill and labour by the photographer to bring about the desired result. Learned Judges held that the job of a photographer is a contract for work and labour and it is not a contract of sale.</p><p style="text-align: justify;">10. Reliance was also placed on a judgment of this High Court in the case of Photo Emporium v. Addl. District Magistrate reported in 77 STC 199 in which this High Court followed the ratio of the judgment of the Supreme Court in the case of B.C. Kame. In that case, the stand of the Revenue was disapproved by the Orissa High Court.</p><p style="text-align: justify;">11. Similar view was taken in 110 STC 145 in the case of Foto Colour Labs Pvt. Ltd. v. Commercial Taxes Officer where the Tribunal held that the transfer of paper in the photograph is purely incidental and payment is only taken to give positive prints and not to get the photo papers. Therefore, the contract in between the petitioner and his client is not a contract of sale, and neither directly or indirectly works contract is involved in the supply of photo papers. Similar view was taken by the West Bengal Taxation Tribunal in the case of Studio Kamalalaya v. Commercial Tax Officer reported in 89 STC 307.</p><p style="text-align: justify;">12. In the case of Bavens v. Onion of India report in 97 STC 161, learned Judges held that when a photographer takes a photograph of his customer, he develops the negative and supplies positive prints in the desired size to the customer. In doing so the photographer uses his own camera and his own film. The negative belongs to the photographer and not to the customer. No basic goods are provided by the customer which are subjected to processing by the photographer so as to make the contract a works contract. There is no accretion to goods or property or the nucleus of a property which belongs to the customer. It is the skill of the photographer which is most important to get the desired result.</p><p style="text-align: justify;">13. Hon'ble Karnataka High Court followed the same principle in the case of Keshoram Surlndranath Photo-mag Pvt. Ltd. v. Assistant Commissioner of Commercial Taxes reported in 121 STC 175. In that judgment, learned Judges of the Karnataka High Court relied on the judgment of the Supreme Court in B.C. Kame's case and came to the conclusion that in the job of the photographer in supplying positive prints to his customer, no works contract is involved and photographs are not marketable or saleable commodity and as such no tax can be levied on it.</p><p style="text-align: justify;">14. Against the said judgment of the Karnataka High Court, the State of Karnataka High Court filed a S.L.P. before the Hon'ble Supreme Court bearing SLP Nos. 6136-6163 of 2000 and the Hon'ble Supreme Court dismissed the SLP on 20th April, 2000.</p><p style="text-align: justify;">15. In the case of Rainbow Colour Lab v. State of M.P. learned Judges of the Hon'ble Supreme Court reiterated its judgment in B.C. Kame's case and came to the following conclusion:</p><p style="text-align: justify;">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.</p><p style="text-align: justify;">Hon'ble Supreme Court in Bharat Sanchar Nigam Ltd. v. Union of India reported in 145 STC 91 again reiterated the principle in B.C. Kame's case and held that the work done by the photographer is only in the nature of a service contract not involving any sale of goods and held that the stand taken by the State cannot be sustained.</p><p style="text-align: justify;">16. Learned Counsel for the petitioner submitted that the photographs taken by the petitioner are not goods which can be sold and is not a marketable commodity like any other goods. When the copies of photographs are made out, they have no utility or value to any other person than the customer. It is already admitted that the papers utilized for photographs are tax paid goods. Therefore, it is contended by the learned Counsel for the petitioner that the work of photography does not come within the purview of works contract as defined in Section 2(jj) of the Orissa Sales Tax Act.</p><p style="text-align: justify;">17. Learned Counsel for the Revenue in this case virtually did not contest the submission made by the learned Counsel for the petitioner and in support of his contention, learned Counsel for the Revenue relied on a decision of the Supreme Court in the case of Imagic Creative Pvt. Ltd. v. Commissioner of Commercial Taxes and Ors. reported in (2008) 10 RC 236. In that judgment, learned Judges held that since the contract in question is a service contract, it is difficult to hold that in a case of this nature, sales tax would be payable on the value of the entire contract irrespective of the element of service provided.</p><p style="text-align: justify;">For the reasons discussed above, we answer the first question in the negative and the second question, in the affirmative. We thus answer both the questions in favour of the assessee and against the Revenue.</p><p style="text-align: justify;">The three revision applications are thus disposed of.</p><p style="text-align: justify;">No costs.</p><p style="text-align: justify;">B.N. Mahapatra, J.</p><p style="text-align: justify;">18. I agree.<p style="text-align: justify;"></p><p style="text-align: justify;">',
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$title_for_layout = 'Studio Sujata Vs Commissioner of Sales Tax - Citation 531271 - Court Judgment | '
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	'Judgement' => array(
		'id' => '531271',
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		'appellant' => 'Studio Sujata',
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		'casename' => 'Studio Sujata Vs. Commissioner of Sales Tax',
		'casenote' => 'Sales Tax - Assessment - Contract of Sale - Section 12 (5) of Orissa Sales Tax 1947 - Petitioner carries on business of processing and developing photography - Revenue assessed petitioner under Section 12(5) of Act on ground that activities of petitioner can be called works contract - Petitioner approached to Assistant of Sales Tax on ground that there is no contract of sale between the petitioner and the client, it is only service - Dismissed and affirmed by Tribunal - Hence present petition - Whether Tribunal is right to held that tax is exigible for photographs as execution of works contract or not? - Held, as per precedent laid down by Supreme Court in case of Sales Tax Officer v. B.C. Kame that photographer takes photograph and develops negatives and does other photographic work and thereafter supplies prints to his client - By doing so he cannot be said to enter into contract for sale of goods - Therefore, job of photographer is contract for work and labour and it is not contract of sale - Revenue committed mistake in assessing petitioner under Section 12(5) of Act on basis of contract of sale - Petition disposed of accordingly  - STATE FINANCIAL CORPORATIONS ACT, 1951 [63/1951]. Section 29; [P.K. Tripathy, A.K. Parichha & N.Prusty, JJ] Discharge of loan  Orissa Forest Act (14 of 1972), Section 56  Confiscation of vehicle - Held, The Authorities under Section 56 of the Orissa Forest Act, 1972 are not obliged to release the vehicle from the confiscation proceeding or to pay the sale proceeds of the vehicle after the order of confiscation in favour of Orissa State Financial Corporation when such vehicles were purchased on being financed by the Orissa State Financial Corporation and the loan had not been liquidated by the date of the seizure/confiscation of the vehicle. Concept of first charge or second charge has no applicability when the vehicle is not otherwise disposed of to determine the liabilities of the loanee. On the other hand the vehicle having been found indulged in forest offences was made subject matter of a confiscation proceedings, and therefore, the procedure followed for confiscation of the vehicle and for its sale is punitive in nature and not with a view to give benefit to anybody including the Department which initiated the confiscation proceeding. Apart from that, the claim of the Orissa State Financial Corporation as against its loanee (who had taken the vehicle on hire- purchase agreement) brings the loanee and the sureties within the default clause under the State Financial Corporation Act, 1951 or the heirs and successors of such persons. Procedure is provided in the Act, 1951 and the Rules thereof about the manner in which such loan is to be recovered, and in that context only the vehicle under the hire-purchase agreement is placed as the first charge. If such property is not available for any reason, then the loan is not automatically waived or the loanee and his sureties are not automatically redeemed of the liabilities to repay. The Financial Corporation is concerned with repayment of loan either from the property or persons offered as surety. Thus, a vehicle, which is subject matter of confiscation proceeding under the Act, 1872, being not available to the Orissa State Financial Corporation for adjustment of the unpaid loan, that does not at all bring out an anomalous situation so as to defeat the right of the Orissa State Financial Corporation. Agreement between the Orissa State Financial Corporation and the loanee is a pure and simple contract governed by the provisions of the Contract Act, 1872 read with the provisions in the Act, 1951 and its Rules. On the other hand, a confiscation proceeding under the Act, 1972 is punitive in nature for commission of a forest offence. Thus, by virtue of the provision in Section 56 read with Section 64 (2) of the Act, 1972, the action taken for confiscation of the vehicle cannot be extended to grant protection of the loan advanced by Orissa State Financial Corporation. By doing that it amounts to grant premium to the pick-pockets in as much as, by making payment of the confiscation amount in favour of the Orissa State Financial Corporation the loan burden of the accused of the forest offence is reduced to the extent of the sale proceeds of the vehicle. In other words, on payment of the sale proceeds of the confiscation proceeding to the Orissa State Financial Corporation towards discharge of the loan account of the accused of a forest offence, it would lead to a system to reward him by repayment of his loan. Then it does not become a penalty nor the action become punitive, but it remains as a reward to the accused of forest offence. Such a concept is totally not conceivable from any provision in the Act, 1972 or the Act, 1951. [AIR 2002 Orissa 130 Overruled]. -- STATE FINANCIAL CORPORATIONS ACT, 1951. 
Section 29; Discharge of loan  Orissa Forest Act (14 of 1972), Section 56  Confiscation of vehicle - Held, The Authorities under Section 56 of the Orissa Forest Act, 1972 are not obliged to release the vehicle from the confiscation proceeding or to pay the sale proceeds of the vehicle after the order of confiscation in favour of Orissa State Financial Corporation when such vehicles were purchased on being financed by the Orissa State Financial Corporation and the loan had not been liquidated by the date of the seizure/confiscation of the vehicle. Concept of first charge or second charge has no applicability when the vehicle is not otherwise disposed of to determine the liabilities of the loanee. On the other hand the vehicle having been found indulged in forest offences was made subject matter of a confiscation proceedings, and therefore, the procedure followed for confiscation of the vehicle and for its sale is punitive in nature and not with a view to give benefit to anybody including the Department which initiated the confiscation proceeding. Apart from that, the claim of the Orissa State Financial Corporation as against its loanee (who had taken the vehicle on hire- purchase agreement) brings the loanee and the sureties within the default clause under the State Financial Corporation Act, 1951 or the heirs and successors of such persons. Procedure is provided in the Act, 1951 and the Rules thereof about the manner in which such loan is to be recovered, and in that context only the vehicle under the hire-purchase agreement is placed as the first charge. If such property is not available for any reason, then the loan is not automatically waived or the loanee and his sureties are not automatically redeemed of the liabilities to repay. The Financial Corporation is concerned with repayment of loan either from the property or persons offered as surety. Thus, a vehicle, which is subject matter of confiscation proceeding under the Act, 1872, being not available to the Orissa State Financial Corporation for adjustment of the unpaid loan, that does not at all bring out an anomalous situation so as to defeat the right of the Orissa State Financial Corporation. Agreement between the Orissa State Financial Corporation and the loanee is a pure and simple contract governed by the provisions of the Contract Act, 1872 read with the provisions in the Act, 1951 and its Rules. On the other hand, a confiscation proceeding under the Act, 1972 is punitive in nature for commission of a forest offence. Thus, by virtue of the provision in Section 56 read with Section 64 (2) of the Act, 1972, the action taken for confiscation of the vehicle cannot be extended to grant protection of the loan advanced by Orissa State Financial Corporation. By doing that it amounts to grant premium to the pick-pockets in as much as, by making payment of the confiscation amount in favour of the Orissa State Financial Corporation the loan burden of the accused of the forest offence is reduced to the extent of the sale proceeds of the vehicle. In other words, on payment of the sale proceeds of the confiscation proceeding to the Orissa State Financial Corporation towards discharge of the loan account of the accused of a forest offence, it would lead to a system to reward him by repayment of his loan. Then it does not become a penalty nor the action become punitive, but it remains as a reward to the accused of forest offence. Such a concept is totally not conceivable from any provision in the Act, 1972 or the Act, 1951. [AIR 2002 Orissa 130 Overruled].  -  In that case, the stand of the Revenue was disapproved by the Orissa High Court. 16. Learned Counsel for the petitioner submitted that the photographs taken by the petitioner are not goods which can be sold and is not a marketable commodity like any other goods.',
		'caseanalysis' => null,
		'casesref' => 'Imagic Creative Pvt. Ltd. v. Commissioner of Commercial Taxes and Ors.;',
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		'court' => 'Orissa',
		'court_type' => 'HC',
		'decidedon' => '2008-04-02',
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		'judge' => ' A.K. Ganguly, C.J. and; B.N. Mahapatra, J.',
		'judgement' => '<p>A.K. Ganguly, C.J.</p><p>1. Initially three S.J.Cs. being S.J.C. Nos. 10 of 1997, 8 of 1997 and 9 of 1997 were filed and subsequently renumbered as STREV Nos. 212, 214 and 216 of 2007 respectively. In view of the common questions of facts and law, all the three Revision Applications are heard and disposed of together.</p><p>2. The following questions of law arising out of the order passed by the Orissa Sales Tax Tribunal on 8.12.1993 in Second Appeal Nos. 3345 to 3350 of 1991-92 have been referred to this Hon'ble High Court in terms of the order of this Hon'ble Court dated 24.2.1997. The questions are:</p><p>(i) Whether on the facts and in the circumstances of the case, the Tribunal is right to held that tax is exigible for photographs as execution of works contract ?</p><p>(ii) Whether on the facts and in the circumstances of the case, the conclusion of the Tribunal is perverse due to non-consideration and mis-consideration of facts and law and, therefore, it is liable to be set aside for re-hearing ?</p><p>3. The materials facts out of which those questions arise are that the petitioner carries on the business of processing and developing photography. In the usual course of business, the petitioner takes photographs of persons or of family and then develops the negative by employing his skill and labour and then supplies the photographs to the clients. These photographs which are prepared by the petitioner are not commercial items because they are neither purchased nor sold. However, to develop these photographs employment of skill and labour is essential. It may be mentioned that petitioner does not carry on any sale of photographs of national leaders, God and Goddess.</p><p>4. After the passing of 46th amendment of the Constitution of India and consequent amendments thereto in Orissa Sales Tax Act (OST Act), the Sales Tax Officer, Bhubaneswar-II Circle, Bhubaneswar sent notices to assess the petitioner as an unregistered dealer under Section 12 (5) of the OST Act, inter alia, contending that the petitioner's activities can be called 'works contract'. Pursuant to said notice, the petitioner gave its reply and appeared before the Sales Tax Officer and produced the books of account and documents including Receipts, Purchase Memos, Vouchers, Ledger and thereby denied its liability under the OST Act. The petitioner also submitted objection petitions on various dates i.e. 28.12.1985, 10.1.1986, 20.2.1986 and 29.2.1988 contending, inter alia, that the petitioner has no sales tax liability under OST Act and the notices, which were issued, are without jurisdiction.</p><p>5. Ignoring the said objections of the petitioner, the Sales Tax Officer, Bhubaneswar-II Circle, Bhubaneswar assessed the petitioner as an unregistered dealer, inter alia, holding that the petitioner is liable to pay sales tax as petitioner has been alleged to carry activities of 'works contract'. Therefore, orders of assessment being dated 29.2.1988 for the years 1984-85 (9/84 to 3/85), 1985-86 and 1986- 87 under Section 12(5) of OST Act and under Rule 5 of the Orissa Additional Sales Tax Rules, 1975 were passed and a tax of Rs. 20,765.00 and penalty of Rs. 5,000.00 totalling to Rs. 25,765.00 was imposed on the petitioner. The petitioner then filed the First Appeal before the learned Assistant Commissioner of Sales Tax. The First Appellate Authority by an order dated 27.9.1991 confirmed the levy of tax under the OST Act, but reduced the penalty to Rs. 1250.00. Thereupon, the petitioner filed the Second Appeal before the Orissa Sales Tax Tribunal, Cuttack. The said Tribunal heard the Second Appeal and in course of hearing, the petitioner raised various contentions. Ultimately, the Tribunal upheld the levy of tax but deleted the penalty.</p><p>6. Thereafter the petitioner came up with a reference application under Section 24(1) of the Orissa Sales Tax Act framing certain questions for being referred to the Hon'ble High Court. The said prayer of the petitioner was rejected by the Tribunal. Then the petitioner moved Hon'ble High Court under Section 24(2)(b) of the Orissa Sales Tax Act, 1947 whereupon the High Court directed the Tribunal to state to case and refer the questions under Section 24(3) of the OST Act for a decision of the High Court.</p><p>7. Accordingly, the Tribunal stated the case and referred the aforesaid questions for a decision of the High Court.</p><p>8. Learned Counsel for the petitioner before the High Court submitted that in the transaction in question, there is no contract of sale between the petitioner and the client. It is only a contract of service and the photographs, which the petitioner produced by supplying the same has no commercial value and are not marketable. So, there is no question of a works contract. It is the consistent stand of the petitioner that the present photographs which are produced by the petitioner have no utility or value to any other person than the customer. By developing such photographs, the petitioner only renders service to his customers. The customer pays for the service rendered by the petitioner. It is the contention of the petitioner that his activity is similar to that of consulting firm preparing plan and sketches pursuant to client's specification or professional giving opinion on papers. All those activities are done to serve the client. Therefore, this does not come within the purview of the definition of 'goods', 'sale', 'dealer' or 'works contract'. It is the petitioner's case that he purchased the goods, namely, papers on payment of sales tax. Further levy of tax on the personal service rendered to the client of the petitioner will amount to double taxation. It is also the contention of the petitioner that the paper which is used in the photography are incidental and insignificant.</p><p>9. In support of its contention, learned Counsel for the petitioner has relied on several judgments. First reliance was place on the judgment of the Supreme Court in the case of Sales Tax Officer v. B.C. Kame reported in 39 STC 237(SC). At page 241 of the report, learned Judges of the Supreme Court held that a photographer takes the photograph and develops the negatives and does other photographic work and thereafter supplies the prints to his client. By doing so he cannot be said to enter into a contract for sale of goods. On the other hand, the contract is for use of skill and labour by the photographer to bring about the desired result. Learned Judges held that the job of a photographer is a contract for work and labour and it is not a contract of sale.</p><p>10. Reliance was also placed on a judgment of this High Court in the case of Photo Emporium v. Addl. District Magistrate reported in 77 STC 199 in which this High Court followed the ratio of the judgment of the Supreme Court in the case of B.C. Kame. In that case, the stand of the Revenue was disapproved by the Orissa High Court.</p><p>11. Similar view was taken in 110 STC 145 in the case of Foto Colour Labs Pvt. Ltd. v. Commercial Taxes Officer where the Tribunal held that the transfer of paper in the photograph is purely incidental and payment is only taken to give positive prints and not to get the photo papers. Therefore, the contract in between the petitioner and his client is not a contract of sale, and neither directly or indirectly works contract is involved in the supply of photo papers. Similar view was taken by the West Bengal Taxation Tribunal in the case of Studio Kamalalaya v. Commercial Tax Officer reported in 89 STC 307.</p><p>12. In the case of Bavens v. Onion of India report in 97 STC 161, learned Judges held that when a photographer takes a photograph of his customer, he develops the negative and supplies positive prints in the desired size to the customer. In doing so the photographer uses his own camera and his own film. The negative belongs to the photographer and not to the customer. No basic goods are provided by the customer which are subjected to processing by the photographer so as to make the contract a works contract. There is no accretion to goods or property or the nucleus of a property which belongs to the customer. It is the skill of the photographer which is most important to get the desired result.</p><p>13. Hon'ble Karnataka High Court followed the same principle in the case of Keshoram Surlndranath Photo-mag Pvt. Ltd. v. Assistant Commissioner of Commercial Taxes reported in 121 STC 175. In that judgment, learned Judges of the Karnataka High Court relied on the judgment of the Supreme Court in B.C. Kame's case and came to the conclusion that in the job of the photographer in supplying positive prints to his customer, no works contract is involved and photographs are not marketable or saleable commodity and as such no tax can be levied on it.</p><p>14. Against the said judgment of the Karnataka High Court, the State of Karnataka High Court filed a S.L.P. before the Hon'ble Supreme Court bearing SLP Nos. 6136-6163 of 2000 and the Hon'ble Supreme Court dismissed the SLP on 20th April, 2000.</p><p>15. In the case of Rainbow Colour Lab v. State of M.P. learned Judges of the Hon'ble Supreme Court reiterated its judgment in B.C. Kame's case and came to the following conclusion:</p><p>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.</p><p>Hon'ble Supreme Court in Bharat Sanchar Nigam Ltd. v. Union of India reported in 145 STC 91 again reiterated the principle in B.C. Kame's case and held that the work done by the photographer is only in the nature of a service contract not involving any sale of goods and held that the stand taken by the State cannot be sustained.</p><p>16. Learned Counsel for the petitioner submitted that the photographs taken by the petitioner are not goods which can be sold and is not a marketable commodity like any other goods. When the copies of photographs are made out, they have no utility or value to any other person than the customer. It is already admitted that the papers utilized for photographs are tax paid goods. Therefore, it is contended by the learned Counsel for the petitioner that the work of photography does not come within the purview of works contract as defined in Section 2(jj) of the Orissa Sales Tax Act.</p><p>17. Learned Counsel for the Revenue in this case virtually did not contest the submission made by the learned Counsel for the petitioner and in support of his contention, learned Counsel for the Revenue relied on a decision of the Supreme Court in the case of Imagic Creative Pvt. Ltd. v. Commissioner of Commercial Taxes and Ors. reported in (2008) 10 RC 236. In that judgment, learned Judges held that since the contract in question is a service contract, it is difficult to hold that in a case of this nature, sales tax would be payable on the value of the entire contract irrespective of the element of service provided.</p><p>For the reasons discussed above, we answer the first question in the negative and the second question, in the affirmative. We thus answer both the questions in favour of the assessee and against the Revenue.</p><p>The three revision applications are thus disposed of.</p><p>No costs.</p><p>B.N. Mahapatra, J.</p><p>18. I agree.<p></p><p>',
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	(int) 0 => '<p>A.K. Ganguly, C.J.',
	(int) 1 => '<p>1. Initially three S.J.Cs. being S.J.C. Nos. 10 of 1997, 8 of 1997 and 9 of 1997 were filed and subsequently renumbered as STREV Nos. 212, 214 and 216 of 2007 respectively. In view of the common questions of facts and law, all the three Revision Applications are heard and disposed of together.',
	(int) 2 => '<p>2. The following questions of law arising out of the order passed by the Orissa Sales Tax Tribunal on 8.12.1993 in Second Appeal Nos. 3345 to 3350 of 1991-92 have been referred to this Hon'ble High Court in terms of the order of this Hon'ble Court dated 24.2.1997. The questions are:',
	(int) 3 => '<p>(i) Whether on the facts and in the circumstances of the case, the Tribunal is right to held that tax is exigible for photographs as execution of works contract ?',
	(int) 4 => '<p>(ii) Whether on the facts and in the circumstances of the case, the conclusion of the Tribunal is perverse due to non-consideration and mis-consideration of facts and law and, therefore, it is liable to be set aside for re-hearing ?',
	(int) 5 => '<p>3. The materials facts out of which those questions arise are that the petitioner carries on the business of processing and developing photography. In the usual course of business, the petitioner takes photographs of persons or of family and then develops the negative by employing his skill and labour and then supplies the photographs to the clients. These photographs which are prepared by the petitioner are not commercial items because they are neither purchased nor sold. However, to develop these photographs employment of skill and labour is essential. It may be mentioned that petitioner does not carry on any sale of photographs of national leaders, God and Goddess.',
	(int) 6 => '<p>4. After the passing of 46th amendment of the Constitution of India and consequent amendments thereto in Orissa Sales Tax Act (OST Act), the Sales Tax Officer, Bhubaneswar-II Circle, Bhubaneswar sent notices to assess the petitioner as an unregistered dealer under Section 12 (5) of the OST Act, inter alia, contending that the petitioner's activities can be called 'works contract'. Pursuant to said notice, the petitioner gave its reply and appeared before the Sales Tax Officer and produced the books of account and documents including Receipts, Purchase Memos, Vouchers, Ledger and thereby denied its liability under the OST Act. The petitioner also submitted objection petitions on various dates i.e. 28.12.1985, 10.1.1986, 20.2.1986 and 29.2.1988 contending, inter alia, that the petitioner has no sales tax liability under OST Act and the notices, which were issued, are without jurisdiction.',
	(int) 7 => '<p>5. Ignoring the said objections of the petitioner, the Sales Tax Officer, Bhubaneswar-II Circle, Bhubaneswar assessed the petitioner as an unregistered dealer, inter alia, holding that the petitioner is liable to pay sales tax as petitioner has been alleged to carry activities of 'works contract'. Therefore, orders of assessment being dated 29.2.1988 for the years 1984-85 (9/84 to 3/85), 1985-86 and 1986- 87 under Section 12(5) of OST Act and under Rule 5 of the Orissa Additional Sales Tax Rules, 1975 were passed and a tax of Rs. 20,765.00 and penalty of Rs. 5,000.00 totalling to Rs. 25,765.00 was imposed on the petitioner. The petitioner then filed the First Appeal before the learned Assistant Commissioner of Sales Tax. The First Appellate Authority by an order dated 27.9.1991 confirmed the levy of tax under the OST Act, but reduced the penalty to Rs. 1250.00. Thereupon, the petitioner filed the Second Appeal before the Orissa Sales Tax Tribunal, Cuttack. The said Tribunal heard the Second Appeal and in course of hearing, the petitioner raised various contentions. Ultimately, the Tribunal upheld the levy of tax but deleted the penalty.',
	(int) 8 => '<p>6. Thereafter the petitioner came up with a reference application under Section 24(1) of the Orissa Sales Tax Act framing certain questions for being referred to the Hon'ble High Court. The said prayer of the petitioner was rejected by the Tribunal. Then the petitioner moved Hon'ble High Court under Section 24(2)(b) of the Orissa Sales Tax Act, 1947 whereupon the High Court directed the Tribunal to state to case and refer the questions under Section 24(3) of the OST Act for a decision of the High Court.',
	(int) 9 => '<p>7. Accordingly, the Tribunal stated the case and referred the aforesaid questions for a decision of the High Court.',
	(int) 10 => '<p>8. Learned Counsel for the petitioner before the High Court submitted that in the transaction in question, there is no contract of sale between the petitioner and the client. It is only a contract of service and the photographs, which the petitioner produced by supplying the same has no commercial value and are not marketable. So, there is no question of a works contract. It is the consistent stand of the petitioner that the present photographs which are produced by the petitioner have no utility or value to any other person than the customer. By developing such photographs, the petitioner only renders service to his customers. The customer pays for the service rendered by the petitioner. It is the contention of the petitioner that his activity is similar to that of consulting firm preparing plan and sketches pursuant to client's specification or professional giving opinion on papers. All those activities are done to serve the client. Therefore, this does not come within the purview of the definition of 'goods', 'sale', 'dealer' or 'works contract'. It is the petitioner's case that he purchased the goods, namely, papers on payment of sales tax. Further levy of tax on the personal service rendered to the client of the petitioner will amount to double taxation. It is also the contention of the petitioner that the paper which is used in the photography are incidental and insignificant.',
	(int) 11 => '<p>9. In support of its contention, learned Counsel for the petitioner has relied on several judgments. First reliance was place on the judgment of the Supreme Court in the case of Sales Tax Officer v. B.C. Kame reported in 39 STC 237(SC). At page 241 of the report, learned Judges of the Supreme Court held that a photographer takes the photograph and develops the negatives and does other photographic work and thereafter supplies the prints to his client. By doing so he cannot be said to enter into a contract for sale of goods. On the other hand, the contract is for use of skill and labour by the photographer to bring about the desired result. Learned Judges held that the job of a photographer is a contract for work and labour and it is not a contract of sale.',
	(int) 12 => '<p>10. Reliance was also placed on a judgment of this High Court in the case of Photo Emporium v. Addl. District Magistrate reported in 77 STC 199 in which this High Court followed the ratio of the judgment of the Supreme Court in the case of B.C. Kame. In that case, the stand of the Revenue was disapproved by the Orissa High Court.',
	(int) 13 => '<p>11. Similar view was taken in 110 STC 145 in the case of Foto Colour Labs Pvt. Ltd. v. Commercial Taxes Officer where the Tribunal held that the transfer of paper in the photograph is purely incidental and payment is only taken to give positive prints and not to get the photo papers. Therefore, the contract in between the petitioner and his client is not a contract of sale, and neither directly or indirectly works contract is involved in the supply of photo papers. Similar view was taken by the West Bengal Taxation Tribunal in the case of Studio Kamalalaya v. Commercial Tax Officer reported in 89 STC 307.',
	(int) 14 => '<p>12. In the case of Bavens v. Onion of India report in 97 STC 161, learned Judges held that when a photographer takes a photograph of his customer, he develops the negative and supplies positive prints in the desired size to the customer. In doing so the photographer uses his own camera and his own film. The negative belongs to the photographer and not to the customer. No basic goods are provided by the customer which are subjected to processing by the photographer so as to make the contract a works contract. There is no accretion to goods or property or the nucleus of a property which belongs to the customer. It is the skill of the photographer which is most important to get the desired result.',
	(int) 15 => '<p>13. Hon'ble Karnataka High Court followed the same principle in the case of Keshoram Surlndranath Photo-mag Pvt. Ltd. v. Assistant Commissioner of Commercial Taxes reported in 121 STC 175. In that judgment, learned Judges of the Karnataka High Court relied on the judgment of the Supreme Court in B.C. Kame's case and came to the conclusion that in the job of the photographer in supplying positive prints to his customer, no works contract is involved and photographs are not marketable or saleable commodity and as such no tax can be levied on it.',
	(int) 16 => '<p>14. Against the said judgment of the Karnataka High Court, the State of Karnataka High Court filed a S.L.P. before the Hon'ble Supreme Court bearing SLP Nos. 6136-6163 of 2000 and the Hon'ble Supreme Court dismissed the SLP on 20th April, 2000.',
	(int) 17 => '<p>15. In the case of Rainbow Colour Lab v. State of M.P. learned Judges of the Hon'ble Supreme Court reiterated its judgment in B.C. Kame's case and came to the following conclusion:',
	(int) 18 => '<p>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.',
	(int) 19 => '<p>Hon'ble Supreme Court in Bharat Sanchar Nigam Ltd. v. Union of India reported in 145 STC 91 again reiterated the principle in B.C. Kame's case and held that the work done by the photographer is only in the nature of a service contract not involving any sale of goods and held that the stand taken by the State cannot be sustained.',
	(int) 20 => '<p>16. Learned Counsel for the petitioner submitted that the photographs taken by the petitioner are not goods which can be sold and is not a marketable commodity like any other goods. When the copies of photographs are made out, they have no utility or value to any other person than the customer. It is already admitted that the papers utilized for photographs are tax paid goods. Therefore, it is contended by the learned Counsel for the petitioner that the work of photography does not come within the purview of works contract as defined in Section 2(jj) of the Orissa Sales Tax Act.',
	(int) 21 => '<p>17. Learned Counsel for the Revenue in this case virtually did not contest the submission made by the learned Counsel for the petitioner and in support of his contention, learned Counsel for the Revenue relied on a decision of the Supreme Court in the case of Imagic Creative Pvt. Ltd. v. Commissioner of Commercial Taxes and Ors. reported in (2008) 10 RC 236. In that judgment, learned Judges held that since the contract in question is a service contract, it is difficult to hold that in a case of this nature, sales tax would be payable on the value of the entire contract irrespective of the element of service provided.',
	(int) 22 => '<p>For the reasons discussed above, we answer the first question in the negative and the second question, in the affirmative. We thus answer both the questions in favour of the assessee and against the Revenue.',
	(int) 23 => '<p>The three revision applications are thus disposed of.',
	(int) 24 => '<p>No costs.',
	(int) 25 => '<p>B.N. Mahapatra, J.',
	(int) 26 => '<p>18. I agree.<p>',
	(int) 27 => '<p>'
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12. In the case of Bavens v. Onion of India report in 97 STC 161, learned Judges held that when a photographer takes a photograph of his customer, he develops the negative and supplies positive prints in the desired size to the customer. In doing so the photographer uses his own camera and his own film. The negative belongs to the photographer and not to the customer. No basic goods are provided by the customer which are subjected to processing by the photographer so as to make the contract a works contract. There is no accretion to goods or property or the nucleus of a property which belongs to the customer. It is the skill of the photographer which is most important to get the desired result.

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	'title_for_layout' => 'Studio Sujata Vs Commissioner of Sales Tax - Citation 531271 - Court Judgment | ',
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		'Judgement' => array(
			'id' => '531271',
			'acts' => '',
			'appealno' => '',
			'appellant' => 'Studio Sujata',
			'authreffered' => '',
			'casename' => 'Studio Sujata Vs. Commissioner of Sales Tax',
			'casenote' => 'Sales Tax - Assessment - Contract of Sale - Section 12 (5) of Orissa Sales Tax 1947 - Petitioner carries on business of processing and developing photography - Revenue assessed petitioner under Section 12(5) of Act on ground that activities of petitioner can be called works contract - Petitioner approached to Assistant of Sales Tax on ground that there is no contract of sale between the petitioner and the client, it is only service - Dismissed and affirmed by Tribunal - Hence present petition - Whether Tribunal is right to held that tax is exigible for photographs as execution of works contract or not? - Held, as per precedent laid down by Supreme Court in case of Sales Tax Officer v. B.C. Kame that photographer takes photograph and develops negatives and does other photographic work and thereafter supplies prints to his client - By doing so he cannot be said to enter into contract for sale of goods - Therefore, job of photographer is contract for work and labour and it is not contract of sale - Revenue committed mistake in assessing petitioner under Section 12(5) of Act on basis of contract of sale - Petition disposed of accordingly  - STATE FINANCIAL CORPORATIONS ACT, 1951 [63/1951]. Section 29; [P.K. Tripathy, A.K. Parichha & N.Prusty, JJ] Discharge of loan  Orissa Forest Act (14 of 1972), Section 56  Confiscation of vehicle - Held, The Authorities under Section 56 of the Orissa Forest Act, 1972 are not obliged to release the vehicle from the confiscation proceeding or to pay the sale proceeds of the vehicle after the order of confiscation in favour of Orissa State Financial Corporation when such vehicles were purchased on being financed by the Orissa State Financial Corporation and the loan had not been liquidated by the date of the seizure/confiscation of the vehicle. Concept of first charge or second charge has no applicability when the vehicle is not otherwise disposed of to determine the liabilities of the loanee. On the other hand the vehicle having been found indulged in forest offences was made subject matter of a confiscation proceedings, and therefore, the procedure followed for confiscation of the vehicle and for its sale is punitive in nature and not with a view to give benefit to anybody including the Department which initiated the confiscation proceeding. Apart from that, the claim of the Orissa State Financial Corporation as against its loanee (who had taken the vehicle on hire- purchase agreement) brings the loanee and the sureties within the default clause under the State Financial Corporation Act, 1951 or the heirs and successors of such persons. Procedure is provided in the Act, 1951 and the Rules thereof about the manner in which such loan is to be recovered, and in that context only the vehicle under the hire-purchase agreement is placed as the first charge. If such property is not available for any reason, then the loan is not automatically waived or the loanee and his sureties are not automatically redeemed of the liabilities to repay. The Financial Corporation is concerned with repayment of loan either from the property or persons offered as surety. Thus, a vehicle, which is subject matter of confiscation proceeding under the Act, 1872, being not available to the Orissa State Financial Corporation for adjustment of the unpaid loan, that does not at all bring out an anomalous situation so as to defeat the right of the Orissa State Financial Corporation. Agreement between the Orissa State Financial Corporation and the loanee is a pure and simple contract governed by the provisions of the Contract Act, 1872 read with the provisions in the Act, 1951 and its Rules. On the other hand, a confiscation proceeding under the Act, 1972 is punitive in nature for commission of a forest offence. Thus, by virtue of the provision in Section 56 read with Section 64 (2) of the Act, 1972, the action taken for confiscation of the vehicle cannot be extended to grant protection of the loan advanced by Orissa State Financial Corporation. By doing that it amounts to grant premium to the pick-pockets in as much as, by making payment of the confiscation amount in favour of the Orissa State Financial Corporation the loan burden of the accused of the forest offence is reduced to the extent of the sale proceeds of the vehicle. In other words, on payment of the sale proceeds of the confiscation proceeding to the Orissa State Financial Corporation towards discharge of the loan account of the accused of a forest offence, it would lead to a system to reward him by repayment of his loan. Then it does not become a penalty nor the action become punitive, but it remains as a reward to the accused of forest offence. Such a concept is totally not conceivable from any provision in the Act, 1972 or the Act, 1951. [AIR 2002 Orissa 130 Overruled]. -- STATE FINANCIAL CORPORATIONS ACT, 1951. 
Section 29; Discharge of loan  Orissa Forest Act (14 of 1972), Section 56  Confiscation of vehicle - Held, The Authorities under Section 56 of the Orissa Forest Act, 1972 are not obliged to release the vehicle from the confiscation proceeding or to pay the sale proceeds of the vehicle after the order of confiscation in favour of Orissa State Financial Corporation when such vehicles were purchased on being financed by the Orissa State Financial Corporation and the loan had not been liquidated by the date of the seizure/confiscation of the vehicle. Concept of first charge or second charge has no applicability when the vehicle is not otherwise disposed of to determine the liabilities of the loanee. On the other hand the vehicle having been found indulged in forest offences was made subject matter of a confiscation proceedings, and therefore, the procedure followed for confiscation of the vehicle and for its sale is punitive in nature and not with a view to give benefit to anybody including the Department which initiated the confiscation proceeding. Apart from that, the claim of the Orissa State Financial Corporation as against its loanee (who had taken the vehicle on hire- purchase agreement) brings the loanee and the sureties within the default clause under the State Financial Corporation Act, 1951 or the heirs and successors of such persons. Procedure is provided in the Act, 1951 and the Rules thereof about the manner in which such loan is to be recovered, and in that context only the vehicle under the hire-purchase agreement is placed as the first charge. If such property is not available for any reason, then the loan is not automatically waived or the loanee and his sureties are not automatically redeemed of the liabilities to repay. The Financial Corporation is concerned with repayment of loan either from the property or persons offered as surety. Thus, a vehicle, which is subject matter of confiscation proceeding under the Act, 1872, being not available to the Orissa State Financial Corporation for adjustment of the unpaid loan, that does not at all bring out an anomalous situation so as to defeat the right of the Orissa State Financial Corporation. Agreement between the Orissa State Financial Corporation and the loanee is a pure and simple contract governed by the provisions of the Contract Act, 1872 read with the provisions in the Act, 1951 and its Rules. On the other hand, a confiscation proceeding under the Act, 1972 is punitive in nature for commission of a forest offence. Thus, by virtue of the provision in Section 56 read with Section 64 (2) of the Act, 1972, the action taken for confiscation of the vehicle cannot be extended to grant protection of the loan advanced by Orissa State Financial Corporation. By doing that it amounts to grant premium to the pick-pockets in as much as, by making payment of the confiscation amount in favour of the Orissa State Financial Corporation the loan burden of the accused of the forest offence is reduced to the extent of the sale proceeds of the vehicle. In other words, on payment of the sale proceeds of the confiscation proceeding to the Orissa State Financial Corporation towards discharge of the loan account of the accused of a forest offence, it would lead to a system to reward him by repayment of his loan. Then it does not become a penalty nor the action become punitive, but it remains as a reward to the accused of forest offence. Such a concept is totally not conceivable from any provision in the Act, 1972 or the Act, 1951. [AIR 2002 Orissa 130 Overruled].  -  In that case, the stand of the Revenue was disapproved by the Orissa High Court. 16. Learned Counsel for the petitioner submitted that the photographs taken by the petitioner are not goods which can be sold and is not a marketable commodity like any other goods.',
			'caseanalysis' => null,
			'casesref' => 'Imagic Creative Pvt. Ltd. v. Commissioner of Commercial Taxes and Ors.;',
			'citingcases' => '',
			'counselplain' => '',
			'counseldef' => '',
			'court' => 'Orissa',
			'court_type' => 'HC',
			'decidedon' => '2008-04-02',
			'deposition' => '',
			'favorof' => null,
			'findings' => null,
			'judge' => ' A.K. Ganguly, C.J. and; B.N. Mahapatra, J.',
			'judgement' => '<p style="text-align: justify;">A.K. Ganguly, C.J.</p><p style="text-align: justify;">1. Initially three S.J.Cs. being S.J.C. Nos. 10 of 1997, 8 of 1997 and 9 of 1997 were filed and subsequently renumbered as STREV Nos. 212, 214 and 216 of 2007 respectively. In view of the common questions of facts and law, all the three Revision Applications are heard and disposed of together.</p><p style="text-align: justify;">2. The following questions of law arising out of the order passed by the Orissa Sales Tax Tribunal on 8.12.1993 in Second Appeal Nos. 3345 to 3350 of 1991-92 have been referred to this Hon'ble High Court in terms of the order of this Hon'ble Court dated 24.2.1997. The questions are:</p><p style="text-align: justify;">(i) Whether on the facts and in the circumstances of the case, the Tribunal is right to held that tax is exigible for photographs as execution of works contract ?</p><p style="text-align: justify;">(ii) Whether on the facts and in the circumstances of the case, the conclusion of the Tribunal is perverse due to non-consideration and mis-consideration of facts and law and, therefore, it is liable to be set aside for re-hearing ?</p><p style="text-align: justify;">3. The materials facts out of which those questions arise are that the petitioner carries on the business of processing and developing photography. In the usual course of business, the petitioner takes photographs of persons or of family and then develops the negative by employing his skill and labour and then supplies the photographs to the clients. These photographs which are prepared by the petitioner are not commercial items because they are neither purchased nor sold. However, to develop these photographs employment of skill and labour is essential. It may be mentioned that petitioner does not carry on any sale of photographs of national leaders, God and Goddess.</p><p style="text-align: justify;">4. After the passing of 46th amendment of the Constitution of India and consequent amendments thereto in Orissa Sales Tax Act (OST Act), the Sales Tax Officer, Bhubaneswar-II Circle, Bhubaneswar sent notices to assess the petitioner as an unregistered dealer under Section 12 (5) of the OST Act, inter alia, contending that the petitioner's activities can be called 'works contract'. Pursuant to said notice, the petitioner gave its reply and appeared before the Sales Tax Officer and produced the books of account and documents including Receipts, Purchase Memos, Vouchers, Ledger and thereby denied its liability under the OST Act. The petitioner also submitted objection petitions on various dates i.e. 28.12.1985, 10.1.1986, 20.2.1986 and 29.2.1988 contending, inter alia, that the petitioner has no sales tax liability under OST Act and the notices, which were issued, are without jurisdiction.</p><p style="text-align: justify;">5. Ignoring the said objections of the petitioner, the Sales Tax Officer, Bhubaneswar-II Circle, Bhubaneswar assessed the petitioner as an unregistered dealer, inter alia, holding that the petitioner is liable to pay sales tax as petitioner has been alleged to carry activities of 'works contract'. Therefore, orders of assessment being dated 29.2.1988 for the years 1984-85 (9/84 to 3/85), 1985-86 and 1986- 87 under Section 12(5) of OST Act and under Rule 5 of the Orissa Additional Sales Tax Rules, 1975 were passed and a tax of Rs. 20,765.00 and penalty of Rs. 5,000.00 totalling to Rs. 25,765.00 was imposed on the petitioner. The petitioner then filed the First Appeal before the learned Assistant Commissioner of Sales Tax. The First Appellate Authority by an order dated 27.9.1991 confirmed the levy of tax under the OST Act, but reduced the penalty to Rs. 1250.00. Thereupon, the petitioner filed the Second Appeal before the Orissa Sales Tax Tribunal, Cuttack. The said Tribunal heard the Second Appeal and in course of hearing, the petitioner raised various contentions. Ultimately, the Tribunal upheld the levy of tax but deleted the penalty.</p><p style="text-align: justify;">6. Thereafter the petitioner came up with a reference application under Section 24(1) of the Orissa Sales Tax Act framing certain questions for being referred to the Hon'ble High Court. The said prayer of the petitioner was rejected by the Tribunal. Then the petitioner moved Hon'ble High Court under Section 24(2)(b) of the Orissa Sales Tax Act, 1947 whereupon the High Court directed the Tribunal to state to case and refer the questions under Section 24(3) of the OST Act for a decision of the High Court.</p><p style="text-align: justify;">7. Accordingly, the Tribunal stated the case and referred the aforesaid questions for a decision of the High Court.</p><p style="text-align: justify;">8. Learned Counsel for the petitioner before the High Court submitted that in the transaction in question, there is no contract of sale between the petitioner and the client. It is only a contract of service and the photographs, which the petitioner produced by supplying the same has no commercial value and are not marketable. So, there is no question of a works contract. It is the consistent stand of the petitioner that the present photographs which are produced by the petitioner have no utility or value to any other person than the customer. By developing such photographs, the petitioner only renders service to his customers. The customer pays for the service rendered by the petitioner. It is the contention of the petitioner that his activity is similar to that of consulting firm preparing plan and sketches pursuant to client's specification or professional giving opinion on papers. All those activities are done to serve the client. Therefore, this does not come within the purview of the definition of 'goods', 'sale', 'dealer' or 'works contract'. It is the petitioner's case that he purchased the goods, namely, papers on payment of sales tax. Further levy of tax on the personal service rendered to the client of the petitioner will amount to double taxation. It is also the contention of the petitioner that the paper which is used in the photography are incidental and insignificant.</p><p style="text-align: justify;">9. In support of its contention, learned Counsel for the petitioner has relied on several judgments. First reliance was place on the judgment of the Supreme Court in the case of Sales Tax Officer v. B.C. Kame reported in 39 STC 237(SC). At page 241 of the report, learned Judges of the Supreme Court held that a photographer takes the photograph and develops the negatives and does other photographic work and thereafter supplies the prints to his client. By doing so he cannot be said to enter into a contract for sale of goods. On the other hand, the contract is for use of skill and labour by the photographer to bring about the desired result. Learned Judges held that the job of a photographer is a contract for work and labour and it is not a contract of sale.</p><p style="text-align: justify;">10. Reliance was also placed on a judgment of this High Court in the case of Photo Emporium v. Addl. District Magistrate reported in 77 STC 199 in which this High Court followed the ratio of the judgment of the Supreme Court in the case of B.C. Kame. In that case, the stand of the Revenue was disapproved by the Orissa High Court.</p><p style="text-align: justify;">11. Similar view was taken in 110 STC 145 in the case of Foto Colour Labs Pvt. Ltd. v. Commercial Taxes Officer where the Tribunal held that the transfer of paper in the photograph is purely incidental and payment is only taken to give positive prints and not to get the photo papers. Therefore, the contract in between the petitioner and his client is not a contract of sale, and neither directly or indirectly works contract is involved in the supply of photo papers. Similar view was taken by the West Bengal Taxation Tribunal in the case of Studio Kamalalaya v. Commercial Tax Officer reported in 89 STC 307.</p><p style="text-align: justify;">12. In the case of Bavens v. Onion of India report in 97 STC 161, learned Judges held that when a photographer takes a photograph of his customer, he develops the negative and supplies positive prints in the desired size to the customer. In doing so the photographer uses his own camera and his own film. The negative belongs to the photographer and not to the customer. No basic goods are provided by the customer which are subjected to processing by the photographer so as to make the contract a works contract. There is no accretion to goods or property or the nucleus of a property which belongs to the customer. It is the skill of the photographer which is most important to get the desired result.</p><p style="text-align: justify;">13. Hon'ble Karnataka High Court followed the same principle in the case of Keshoram Surlndranath Photo-mag Pvt. Ltd. v. Assistant Commissioner of Commercial Taxes reported in 121 STC 175. In that judgment, learned Judges of the Karnataka High Court relied on the judgment of the Supreme Court in B.C. Kame's case and came to the conclusion that in the job of the photographer in supplying positive prints to his customer, no works contract is involved and photographs are not marketable or saleable commodity and as such no tax can be levied on it.</p><p style="text-align: justify;">14. Against the said judgment of the Karnataka High Court, the State of Karnataka High Court filed a S.L.P. before the Hon'ble Supreme Court bearing SLP Nos. 6136-6163 of 2000 and the Hon'ble Supreme Court dismissed the SLP on 20th April, 2000.</p><p style="text-align: justify;">15. In the case of Rainbow Colour Lab v. State of M.P. learned Judges of the Hon'ble Supreme Court reiterated its judgment in B.C. Kame's case and came to the following conclusion:</p><p style="text-align: justify;">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.</p><p style="text-align: justify;">Hon'ble Supreme Court in Bharat Sanchar Nigam Ltd. v. Union of India reported in 145 STC 91 again reiterated the principle in B.C. Kame's case and held that the work done by the photographer is only in the nature of a service contract not involving any sale of goods and held that the stand taken by the State cannot be sustained.</p><p style="text-align: justify;">16. Learned Counsel for the petitioner submitted that the photographs taken by the petitioner are not goods which can be sold and is not a marketable commodity like any other goods. When the copies of photographs are made out, they have no utility or value to any other person than the customer. It is already admitted that the papers utilized for photographs are tax paid goods. Therefore, it is contended by the learned Counsel for the petitioner that the work of photography does not come within the purview of works contract as defined in Section 2(jj) of the Orissa Sales Tax Act.</p><p style="text-align: justify;">17. Learned Counsel for the Revenue in this case virtually did not contest the submission made by the learned Counsel for the petitioner and in support of his contention, learned Counsel for the Revenue relied on a decision of the Supreme Court in the case of Imagic Creative Pvt. Ltd. v. Commissioner of Commercial Taxes and Ors. reported in (2008) 10 RC 236. In that judgment, learned Judges held that since the contract in question is a service contract, it is difficult to hold that in a case of this nature, sales tax would be payable on the value of the entire contract irrespective of the element of service provided.</p><p style="text-align: justify;">For the reasons discussed above, we answer the first question in the negative and the second question, in the affirmative. We thus answer both the questions in favour of the assessee and against the Revenue.</p><p style="text-align: justify;">The three revision applications are thus disposed of.</p><p style="text-align: justify;">No costs.</p><p style="text-align: justify;">B.N. Mahapatra, J.</p><p style="text-align: justify;">18. I agree.<p style="text-align: justify;"></p><p style="text-align: justify;">',
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			'pubs' => '106(2008)CLT317; 2008(I)OLR953; (2008)17VST289(Orissa)',
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			'respondent' => 'Commissioner of Sales Tax',
			'sub' => 'Sales Tax/VAT',
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		'casename' => 'Studio Sujata Vs. Commissioner of Sales Tax',
		'casenote' => 'Sales Tax - Assessment - Contract of Sale - Section 12 (5) of Orissa Sales Tax 1947 - Petitioner carries on business of processing and developing photography - Revenue assessed petitioner under Section 12(5) of Act on ground that activities of petitioner can be called works contract - Petitioner approached to Assistant of Sales Tax on ground that there is no contract of sale between the petitioner and the client, it is only service - Dismissed and affirmed by Tribunal - Hence present petition - Whether Tribunal is right to held that tax is exigible for photographs as execution of works contract or not? - Held, as per precedent laid down by Supreme Court in case of Sales Tax Officer v. B.C. Kame that photographer takes photograph and develops negatives and does other photographic work and thereafter supplies prints to his client - By doing so he cannot be said to enter into contract for sale of goods - Therefore, job of photographer is contract for work and labour and it is not contract of sale - Revenue committed mistake in assessing petitioner under Section 12(5) of Act on basis of contract of sale - Petition disposed of accordingly  - STATE FINANCIAL CORPORATIONS ACT, 1951 [63/1951]. Section 29; [P.K. Tripathy, A.K. Parichha & N.Prusty, JJ] Discharge of loan  Orissa Forest Act (14 of 1972), Section 56  Confiscation of vehicle - Held, The Authorities under Section 56 of the Orissa Forest Act, 1972 are not obliged to release the vehicle from the confiscation proceeding or to pay the sale proceeds of the vehicle after the order of confiscation in favour of Orissa State Financial Corporation when such vehicles were purchased on being financed by the Orissa State Financial Corporation and the loan had not been liquidated by the date of the seizure/confiscation of the vehicle. Concept of first charge or second charge has no applicability when the vehicle is not otherwise disposed of to determine the liabilities of the loanee. On the other hand the vehicle having been found indulged in forest offences was made subject matter of a confiscation proceedings, and therefore, the procedure followed for confiscation of the vehicle and for its sale is punitive in nature and not with a view to give benefit to anybody including the Department which initiated the confiscation proceeding. Apart from that, the claim of the Orissa State Financial Corporation as against its loanee (who had taken the vehicle on hire- purchase agreement) brings the loanee and the sureties within the default clause under the State Financial Corporation Act, 1951 or the heirs and successors of such persons. Procedure is provided in the Act, 1951 and the Rules thereof about the manner in which such loan is to be recovered, and in that context only the vehicle under the hire-purchase agreement is placed as the first charge. If such property is not available for any reason, then the loan is not automatically waived or the loanee and his sureties are not automatically redeemed of the liabilities to repay. The Financial Corporation is concerned with repayment of loan either from the property or persons offered as surety. Thus, a vehicle, which is subject matter of confiscation proceeding under the Act, 1872, being not available to the Orissa State Financial Corporation for adjustment of the unpaid loan, that does not at all bring out an anomalous situation so as to defeat the right of the Orissa State Financial Corporation. Agreement between the Orissa State Financial Corporation and the loanee is a pure and simple contract governed by the provisions of the Contract Act, 1872 read with the provisions in the Act, 1951 and its Rules. On the other hand, a confiscation proceeding under the Act, 1972 is punitive in nature for commission of a forest offence. Thus, by virtue of the provision in Section 56 read with Section 64 (2) of the Act, 1972, the action taken for confiscation of the vehicle cannot be extended to grant protection of the loan advanced by Orissa State Financial Corporation. By doing that it amounts to grant premium to the pick-pockets in as much as, by making payment of the confiscation amount in favour of the Orissa State Financial Corporation the loan burden of the accused of the forest offence is reduced to the extent of the sale proceeds of the vehicle. In other words, on payment of the sale proceeds of the confiscation proceeding to the Orissa State Financial Corporation towards discharge of the loan account of the accused of a forest offence, it would lead to a system to reward him by repayment of his loan. Then it does not become a penalty nor the action become punitive, but it remains as a reward to the accused of forest offence. Such a concept is totally not conceivable from any provision in the Act, 1972 or the Act, 1951. [AIR 2002 Orissa 130 Overruled]. -- STATE FINANCIAL CORPORATIONS ACT, 1951. 
Section 29; Discharge of loan  Orissa Forest Act (14 of 1972), Section 56  Confiscation of vehicle - Held, The Authorities under Section 56 of the Orissa Forest Act, 1972 are not obliged to release the vehicle from the confiscation proceeding or to pay the sale proceeds of the vehicle after the order of confiscation in favour of Orissa State Financial Corporation when such vehicles were purchased on being financed by the Orissa State Financial Corporation and the loan had not been liquidated by the date of the seizure/confiscation of the vehicle. Concept of first charge or second charge has no applicability when the vehicle is not otherwise disposed of to determine the liabilities of the loanee. On the other hand the vehicle having been found indulged in forest offences was made subject matter of a confiscation proceedings, and therefore, the procedure followed for confiscation of the vehicle and for its sale is punitive in nature and not with a view to give benefit to anybody including the Department which initiated the confiscation proceeding. Apart from that, the claim of the Orissa State Financial Corporation as against its loanee (who had taken the vehicle on hire- purchase agreement) brings the loanee and the sureties within the default clause under the State Financial Corporation Act, 1951 or the heirs and successors of such persons. Procedure is provided in the Act, 1951 and the Rules thereof about the manner in which such loan is to be recovered, and in that context only the vehicle under the hire-purchase agreement is placed as the first charge. If such property is not available for any reason, then the loan is not automatically waived or the loanee and his sureties are not automatically redeemed of the liabilities to repay. The Financial Corporation is concerned with repayment of loan either from the property or persons offered as surety. Thus, a vehicle, which is subject matter of confiscation proceeding under the Act, 1872, being not available to the Orissa State Financial Corporation for adjustment of the unpaid loan, that does not at all bring out an anomalous situation so as to defeat the right of the Orissa State Financial Corporation. Agreement between the Orissa State Financial Corporation and the loanee is a pure and simple contract governed by the provisions of the Contract Act, 1872 read with the provisions in the Act, 1951 and its Rules. On the other hand, a confiscation proceeding under the Act, 1972 is punitive in nature for commission of a forest offence. Thus, by virtue of the provision in Section 56 read with Section 64 (2) of the Act, 1972, the action taken for confiscation of the vehicle cannot be extended to grant protection of the loan advanced by Orissa State Financial Corporation. By doing that it amounts to grant premium to the pick-pockets in as much as, by making payment of the confiscation amount in favour of the Orissa State Financial Corporation the loan burden of the accused of the forest offence is reduced to the extent of the sale proceeds of the vehicle. In other words, on payment of the sale proceeds of the confiscation proceeding to the Orissa State Financial Corporation towards discharge of the loan account of the accused of a forest offence, it would lead to a system to reward him by repayment of his loan. Then it does not become a penalty nor the action become punitive, but it remains as a reward to the accused of forest offence. Such a concept is totally not conceivable from any provision in the Act, 1972 or the Act, 1951. [AIR 2002 Orissa 130 Overruled].  -  In that case, the stand of the Revenue was disapproved by the Orissa High Court. 16. Learned Counsel for the petitioner submitted that the photographs taken by the petitioner are not goods which can be sold and is not a marketable commodity like any other goods.',
		'caseanalysis' => null,
		'casesref' => 'Imagic Creative Pvt. Ltd. v. Commissioner of Commercial Taxes and Ors.;',
		'citingcases' => '',
		'counselplain' => '',
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		'court_type' => 'HC',
		'decidedon' => '2008-04-02',
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		'judge' => ' A.K. Ganguly, C.J. and; B.N. Mahapatra, J.',
		'judgement' => '<p>A.K. Ganguly, C.J.</p><p>1. Initially three S.J.Cs. being S.J.C. Nos. 10 of 1997, 8 of 1997 and 9 of 1997 were filed and subsequently renumbered as STREV Nos. 212, 214 and 216 of 2007 respectively. In view of the common questions of facts and law, all the three Revision Applications are heard and disposed of together.</p><p>2. The following questions of law arising out of the order passed by the Orissa Sales Tax Tribunal on 8.12.1993 in Second Appeal Nos. 3345 to 3350 of 1991-92 have been referred to this Hon'ble High Court in terms of the order of this Hon'ble Court dated 24.2.1997. The questions are:</p><p>(i) Whether on the facts and in the circumstances of the case, the Tribunal is right to held that tax is exigible for photographs as execution of works contract ?</p><p>(ii) Whether on the facts and in the circumstances of the case, the conclusion of the Tribunal is perverse due to non-consideration and mis-consideration of facts and law and, therefore, it is liable to be set aside for re-hearing ?</p><p>3. The materials facts out of which those questions arise are that the petitioner carries on the business of processing and developing photography. In the usual course of business, the petitioner takes photographs of persons or of family and then develops the negative by employing his skill and labour and then supplies the photographs to the clients. These photographs which are prepared by the petitioner are not commercial items because they are neither purchased nor sold. However, to develop these photographs employment of skill and labour is essential. It may be mentioned that petitioner does not carry on any sale of photographs of national leaders, God and Goddess.</p><p>4. After the passing of 46th amendment of the Constitution of India and consequent amendments thereto in Orissa Sales Tax Act (OST Act), the Sales Tax Officer, Bhubaneswar-II Circle, Bhubaneswar sent notices to assess the petitioner as an unregistered dealer under Section 12 (5) of the OST Act, inter alia, contending that the petitioner's activities can be called 'works contract'. Pursuant to said notice, the petitioner gave its reply and appeared before the Sales Tax Officer and produced the books of account and documents including Receipts, Purchase Memos, Vouchers, Ledger and thereby denied its liability under the OST Act. The petitioner also submitted objection petitions on various dates i.e. 28.12.1985, 10.1.1986, 20.2.1986 and 29.2.1988 contending, inter alia, that the petitioner has no sales tax liability under OST Act and the notices, which were issued, are without jurisdiction.</p><p>5. Ignoring the said objections of the petitioner, the Sales Tax Officer, Bhubaneswar-II Circle, Bhubaneswar assessed the petitioner as an unregistered dealer, inter alia, holding that the petitioner is liable to pay sales tax as petitioner has been alleged to carry activities of 'works contract'. Therefore, orders of assessment being dated 29.2.1988 for the years 1984-85 (9/84 to 3/85), 1985-86 and 1986- 87 under Section 12(5) of OST Act and under Rule 5 of the Orissa Additional Sales Tax Rules, 1975 were passed and a tax of Rs. 20,765.00 and penalty of Rs. 5,000.00 totalling to Rs. 25,765.00 was imposed on the petitioner. The petitioner then filed the First Appeal before the learned Assistant Commissioner of Sales Tax. The First Appellate Authority by an order dated 27.9.1991 confirmed the levy of tax under the OST Act, but reduced the penalty to Rs. 1250.00. Thereupon, the petitioner filed the Second Appeal before the Orissa Sales Tax Tribunal, Cuttack. The said Tribunal heard the Second Appeal and in course of hearing, the petitioner raised various contentions. Ultimately, the Tribunal upheld the levy of tax but deleted the penalty.</p><p>6. Thereafter the petitioner came up with a reference application under Section 24(1) of the Orissa Sales Tax Act framing certain questions for being referred to the Hon'ble High Court. The said prayer of the petitioner was rejected by the Tribunal. Then the petitioner moved Hon'ble High Court under Section 24(2)(b) of the Orissa Sales Tax Act, 1947 whereupon the High Court directed the Tribunal to state to case and refer the questions under Section 24(3) of the OST Act for a decision of the High Court.</p><p>7. Accordingly, the Tribunal stated the case and referred the aforesaid questions for a decision of the High Court.</p><p>8. Learned Counsel for the petitioner before the High Court submitted that in the transaction in question, there is no contract of sale between the petitioner and the client. It is only a contract of service and the photographs, which the petitioner produced by supplying the same has no commercial value and are not marketable. So, there is no question of a works contract. It is the consistent stand of the petitioner that the present photographs which are produced by the petitioner have no utility or value to any other person than the customer. By developing such photographs, the petitioner only renders service to his customers. The customer pays for the service rendered by the petitioner. It is the contention of the petitioner that his activity is similar to that of consulting firm preparing plan and sketches pursuant to client's specification or professional giving opinion on papers. All those activities are done to serve the client. Therefore, this does not come within the purview of the definition of 'goods', 'sale', 'dealer' or 'works contract'. It is the petitioner's case that he purchased the goods, namely, papers on payment of sales tax. Further levy of tax on the personal service rendered to the client of the petitioner will amount to double taxation. It is also the contention of the petitioner that the paper which is used in the photography are incidental and insignificant.</p><p>9. In support of its contention, learned Counsel for the petitioner has relied on several judgments. First reliance was place on the judgment of the Supreme Court in the case of Sales Tax Officer v. B.C. Kame reported in 39 STC 237(SC). At page 241 of the report, learned Judges of the Supreme Court held that a photographer takes the photograph and develops the negatives and does other photographic work and thereafter supplies the prints to his client. By doing so he cannot be said to enter into a contract for sale of goods. On the other hand, the contract is for use of skill and labour by the photographer to bring about the desired result. Learned Judges held that the job of a photographer is a contract for work and labour and it is not a contract of sale.</p><p>10. Reliance was also placed on a judgment of this High Court in the case of Photo Emporium v. Addl. District Magistrate reported in 77 STC 199 in which this High Court followed the ratio of the judgment of the Supreme Court in the case of B.C. Kame. In that case, the stand of the Revenue was disapproved by the Orissa High Court.</p><p>11. Similar view was taken in 110 STC 145 in the case of Foto Colour Labs Pvt. Ltd. v. Commercial Taxes Officer where the Tribunal held that the transfer of paper in the photograph is purely incidental and payment is only taken to give positive prints and not to get the photo papers. Therefore, the contract in between the petitioner and his client is not a contract of sale, and neither directly or indirectly works contract is involved in the supply of photo papers. Similar view was taken by the West Bengal Taxation Tribunal in the case of Studio Kamalalaya v. Commercial Tax Officer reported in 89 STC 307.</p><p>12. In the case of Bavens v. Onion of India report in 97 STC 161, learned Judges held that when a photographer takes a photograph of his customer, he develops the negative and supplies positive prints in the desired size to the customer. In doing so the photographer uses his own camera and his own film. The negative belongs to the photographer and not to the customer. No basic goods are provided by the customer which are subjected to processing by the photographer so as to make the contract a works contract. There is no accretion to goods or property or the nucleus of a property which belongs to the customer. It is the skill of the photographer which is most important to get the desired result.</p><p>13. Hon'ble Karnataka High Court followed the same principle in the case of Keshoram Surlndranath Photo-mag Pvt. Ltd. v. Assistant Commissioner of Commercial Taxes reported in 121 STC 175. In that judgment, learned Judges of the Karnataka High Court relied on the judgment of the Supreme Court in B.C. Kame's case and came to the conclusion that in the job of the photographer in supplying positive prints to his customer, no works contract is involved and photographs are not marketable or saleable commodity and as such no tax can be levied on it.</p><p>14. Against the said judgment of the Karnataka High Court, the State of Karnataka High Court filed a S.L.P. before the Hon'ble Supreme Court bearing SLP Nos. 6136-6163 of 2000 and the Hon'ble Supreme Court dismissed the SLP on 20th April, 2000.</p><p>15. In the case of Rainbow Colour Lab v. State of M.P. learned Judges of the Hon'ble Supreme Court reiterated its judgment in B.C. Kame's case and came to the following conclusion:</p><p>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.</p><p>Hon'ble Supreme Court in Bharat Sanchar Nigam Ltd. v. Union of India reported in 145 STC 91 again reiterated the principle in B.C. Kame's case and held that the work done by the photographer is only in the nature of a service contract not involving any sale of goods and held that the stand taken by the State cannot be sustained.</p><p>16. Learned Counsel for the petitioner submitted that the photographs taken by the petitioner are not goods which can be sold and is not a marketable commodity like any other goods. When the copies of photographs are made out, they have no utility or value to any other person than the customer. It is already admitted that the papers utilized for photographs are tax paid goods. Therefore, it is contended by the learned Counsel for the petitioner that the work of photography does not come within the purview of works contract as defined in Section 2(jj) of the Orissa Sales Tax Act.</p><p>17. Learned Counsel for the Revenue in this case virtually did not contest the submission made by the learned Counsel for the petitioner and in support of his contention, learned Counsel for the Revenue relied on a decision of the Supreme Court in the case of Imagic Creative Pvt. Ltd. v. Commissioner of Commercial Taxes and Ors. reported in (2008) 10 RC 236. In that judgment, learned Judges held that since the contract in question is a service contract, it is difficult to hold that in a case of this nature, sales tax would be payable on the value of the entire contract irrespective of the element of service provided.</p><p>For the reasons discussed above, we answer the first question in the negative and the second question, in the affirmative. We thus answer both the questions in favour of the assessee and against the Revenue.</p><p>The three revision applications are thus disposed of.</p><p>No costs.</p><p>B.N. Mahapatra, J.</p><p>18. I agree.<p></p><p>',
		'observations' => null,
		'overruledby' => null,
		'prhistory' => '',
		'pubs' => '106(2008)CLT317; 2008(I)OLR953; (2008)17VST289(Orissa)',
		'ratiodecidendi' => '',
		'respondent' => 'Commissioner of Sales Tax',
		'sub' => 'Sales Tax/VAT',
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$content = array(
	(int) 0 => '<p>A.K. Ganguly, C.J.',
	(int) 1 => '<p>1. Initially three S.J.Cs. being S.J.C. Nos. 10 of 1997, 8 of 1997 and 9 of 1997 were filed and subsequently renumbered as STREV Nos. 212, 214 and 216 of 2007 respectively. In view of the common questions of facts and law, all the three Revision Applications are heard and disposed of together.',
	(int) 2 => '<p>2. The following questions of law arising out of the order passed by the Orissa Sales Tax Tribunal on 8.12.1993 in Second Appeal Nos. 3345 to 3350 of 1991-92 have been referred to this Hon'ble High Court in terms of the order of this Hon'ble Court dated 24.2.1997. The questions are:',
	(int) 3 => '<p>(i) Whether on the facts and in the circumstances of the case, the Tribunal is right to held that tax is exigible for photographs as execution of works contract ?',
	(int) 4 => '<p>(ii) Whether on the facts and in the circumstances of the case, the conclusion of the Tribunal is perverse due to non-consideration and mis-consideration of facts and law and, therefore, it is liable to be set aside for re-hearing ?',
	(int) 5 => '<p>3. The materials facts out of which those questions arise are that the petitioner carries on the business of processing and developing photography. In the usual course of business, the petitioner takes photographs of persons or of family and then develops the negative by employing his skill and labour and then supplies the photographs to the clients. These photographs which are prepared by the petitioner are not commercial items because they are neither purchased nor sold. However, to develop these photographs employment of skill and labour is essential. It may be mentioned that petitioner does not carry on any sale of photographs of national leaders, God and Goddess.',
	(int) 6 => '<p>4. After the passing of 46th amendment of the Constitution of India and consequent amendments thereto in Orissa Sales Tax Act (OST Act), the Sales Tax Officer, Bhubaneswar-II Circle, Bhubaneswar sent notices to assess the petitioner as an unregistered dealer under Section 12 (5) of the OST Act, inter alia, contending that the petitioner's activities can be called 'works contract'. Pursuant to said notice, the petitioner gave its reply and appeared before the Sales Tax Officer and produced the books of account and documents including Receipts, Purchase Memos, Vouchers, Ledger and thereby denied its liability under the OST Act. The petitioner also submitted objection petitions on various dates i.e. 28.12.1985, 10.1.1986, 20.2.1986 and 29.2.1988 contending, inter alia, that the petitioner has no sales tax liability under OST Act and the notices, which were issued, are without jurisdiction.',
	(int) 7 => '<p>5. Ignoring the said objections of the petitioner, the Sales Tax Officer, Bhubaneswar-II Circle, Bhubaneswar assessed the petitioner as an unregistered dealer, inter alia, holding that the petitioner is liable to pay sales tax as petitioner has been alleged to carry activities of 'works contract'. Therefore, orders of assessment being dated 29.2.1988 for the years 1984-85 (9/84 to 3/85), 1985-86 and 1986- 87 under Section 12(5) of OST Act and under Rule 5 of the Orissa Additional Sales Tax Rules, 1975 were passed and a tax of Rs. 20,765.00 and penalty of Rs. 5,000.00 totalling to Rs. 25,765.00 was imposed on the petitioner. The petitioner then filed the First Appeal before the learned Assistant Commissioner of Sales Tax. The First Appellate Authority by an order dated 27.9.1991 confirmed the levy of tax under the OST Act, but reduced the penalty to Rs. 1250.00. Thereupon, the petitioner filed the Second Appeal before the Orissa Sales Tax Tribunal, Cuttack. The said Tribunal heard the Second Appeal and in course of hearing, the petitioner raised various contentions. Ultimately, the Tribunal upheld the levy of tax but deleted the penalty.',
	(int) 8 => '<p>6. Thereafter the petitioner came up with a reference application under Section 24(1) of the Orissa Sales Tax Act framing certain questions for being referred to the Hon'ble High Court. The said prayer of the petitioner was rejected by the Tribunal. Then the petitioner moved Hon'ble High Court under Section 24(2)(b) of the Orissa Sales Tax Act, 1947 whereupon the High Court directed the Tribunal to state to case and refer the questions under Section 24(3) of the OST Act for a decision of the High Court.',
	(int) 9 => '<p>7. Accordingly, the Tribunal stated the case and referred the aforesaid questions for a decision of the High Court.',
	(int) 10 => '<p>8. Learned Counsel for the petitioner before the High Court submitted that in the transaction in question, there is no contract of sale between the petitioner and the client. It is only a contract of service and the photographs, which the petitioner produced by supplying the same has no commercial value and are not marketable. So, there is no question of a works contract. It is the consistent stand of the petitioner that the present photographs which are produced by the petitioner have no utility or value to any other person than the customer. By developing such photographs, the petitioner only renders service to his customers. The customer pays for the service rendered by the petitioner. It is the contention of the petitioner that his activity is similar to that of consulting firm preparing plan and sketches pursuant to client's specification or professional giving opinion on papers. All those activities are done to serve the client. Therefore, this does not come within the purview of the definition of 'goods', 'sale', 'dealer' or 'works contract'. It is the petitioner's case that he purchased the goods, namely, papers on payment of sales tax. Further levy of tax on the personal service rendered to the client of the petitioner will amount to double taxation. It is also the contention of the petitioner that the paper which is used in the photography are incidental and insignificant.',
	(int) 11 => '<p>9. In support of its contention, learned Counsel for the petitioner has relied on several judgments. First reliance was place on the judgment of the Supreme Court in the case of Sales Tax Officer v. B.C. Kame reported in 39 STC 237(SC). At page 241 of the report, learned Judges of the Supreme Court held that a photographer takes the photograph and develops the negatives and does other photographic work and thereafter supplies the prints to his client. By doing so he cannot be said to enter into a contract for sale of goods. On the other hand, the contract is for use of skill and labour by the photographer to bring about the desired result. Learned Judges held that the job of a photographer is a contract for work and labour and it is not a contract of sale.',
	(int) 12 => '<p>10. Reliance was also placed on a judgment of this High Court in the case of Photo Emporium v. Addl. District Magistrate reported in 77 STC 199 in which this High Court followed the ratio of the judgment of the Supreme Court in the case of B.C. Kame. In that case, the stand of the Revenue was disapproved by the Orissa High Court.',
	(int) 13 => '<p>11. Similar view was taken in 110 STC 145 in the case of Foto Colour Labs Pvt. Ltd. v. Commercial Taxes Officer where the Tribunal held that the transfer of paper in the photograph is purely incidental and payment is only taken to give positive prints and not to get the photo papers. Therefore, the contract in between the petitioner and his client is not a contract of sale, and neither directly or indirectly works contract is involved in the supply of photo papers. Similar view was taken by the West Bengal Taxation Tribunal in the case of Studio Kamalalaya v. Commercial Tax Officer reported in 89 STC 307.',
	(int) 14 => '<p>12. In the case of Bavens v. Onion of India report in 97 STC 161, learned Judges held that when a photographer takes a photograph of his customer, he develops the negative and supplies positive prints in the desired size to the customer. In doing so the photographer uses his own camera and his own film. The negative belongs to the photographer and not to the customer. No basic goods are provided by the customer which are subjected to processing by the photographer so as to make the contract a works contract. There is no accretion to goods or property or the nucleus of a property which belongs to the customer. It is the skill of the photographer which is most important to get the desired result.',
	(int) 15 => '<p>13. Hon'ble Karnataka High Court followed the same principle in the case of Keshoram Surlndranath Photo-mag Pvt. Ltd. v. Assistant Commissioner of Commercial Taxes reported in 121 STC 175. In that judgment, learned Judges of the Karnataka High Court relied on the judgment of the Supreme Court in B.C. Kame's case and came to the conclusion that in the job of the photographer in supplying positive prints to his customer, no works contract is involved and photographs are not marketable or saleable commodity and as such no tax can be levied on it.',
	(int) 16 => '<p>14. Against the said judgment of the Karnataka High Court, the State of Karnataka High Court filed a S.L.P. before the Hon'ble Supreme Court bearing SLP Nos. 6136-6163 of 2000 and the Hon'ble Supreme Court dismissed the SLP on 20th April, 2000.',
	(int) 17 => '<p>15. In the case of Rainbow Colour Lab v. State of M.P. learned Judges of the Hon'ble Supreme Court reiterated its judgment in B.C. Kame's case and came to the following conclusion:',
	(int) 18 => '<p>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.',
	(int) 19 => '<p>Hon'ble Supreme Court in Bharat Sanchar Nigam Ltd. v. Union of India reported in 145 STC 91 again reiterated the principle in B.C. Kame's case and held that the work done by the photographer is only in the nature of a service contract not involving any sale of goods and held that the stand taken by the State cannot be sustained.',
	(int) 20 => '<p>16. Learned Counsel for the petitioner submitted that the photographs taken by the petitioner are not goods which can be sold and is not a marketable commodity like any other goods. When the copies of photographs are made out, they have no utility or value to any other person than the customer. It is already admitted that the papers utilized for photographs are tax paid goods. Therefore, it is contended by the learned Counsel for the petitioner that the work of photography does not come within the purview of works contract as defined in Section 2(jj) of the Orissa Sales Tax Act.',
	(int) 21 => '<p>17. Learned Counsel for the Revenue in this case virtually did not contest the submission made by the learned Counsel for the petitioner and in support of his contention, learned Counsel for the Revenue relied on a decision of the Supreme Court in the case of Imagic Creative Pvt. Ltd. v. Commissioner of Commercial Taxes and Ors. reported in (2008) 10 RC 236. In that judgment, learned Judges held that since the contract in question is a service contract, it is difficult to hold that in a case of this nature, sales tax would be payable on the value of the entire contract irrespective of the element of service provided.',
	(int) 22 => '<p>For the reasons discussed above, we answer the first question in the negative and the second question, in the affirmative. We thus answer both the questions in favour of the assessee and against the Revenue.',
	(int) 23 => '<p>The three revision applications are thus disposed of.',
	(int) 24 => '<p>No costs.',
	(int) 25 => '<p>B.N. Mahapatra, J.',
	(int) 26 => '<p>18. I agree.<p>',
	(int) 27 => '<p>'
)
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13. Hon'ble Karnataka High Court followed the same principle in the case of Keshoram Surlndranath Photo-mag Pvt. Ltd. v. Assistant Commissioner of Commercial Taxes reported in 121 STC 175. In that judgment, learned Judges of the Karnataka High Court relied on the judgment of the Supreme Court in B.C. Kame's case and came to the conclusion that in the job of the photographer in supplying positive prints to his customer, no works contract is involved and photographs are not marketable or saleable commodity and as such no tax can be levied on it.

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			'authreffered' => '',
			'casename' => 'Studio Sujata Vs. Commissioner of Sales Tax',
			'casenote' => 'Sales Tax - Assessment - Contract of Sale - Section 12 (5) of Orissa Sales Tax 1947 - Petitioner carries on business of processing and developing photography - Revenue assessed petitioner under Section 12(5) of Act on ground that activities of petitioner can be called works contract - Petitioner approached to Assistant of Sales Tax on ground that there is no contract of sale between the petitioner and the client, it is only service - Dismissed and affirmed by Tribunal - Hence present petition - Whether Tribunal is right to held that tax is exigible for photographs as execution of works contract or not? - Held, as per precedent laid down by Supreme Court in case of Sales Tax Officer v. B.C. Kame that photographer takes photograph and develops negatives and does other photographic work and thereafter supplies prints to his client - By doing so he cannot be said to enter into contract for sale of goods - Therefore, job of photographer is contract for work and labour and it is not contract of sale - Revenue committed mistake in assessing petitioner under Section 12(5) of Act on basis of contract of sale - Petition disposed of accordingly  - STATE FINANCIAL CORPORATIONS ACT, 1951 [63/1951]. Section 29; [P.K. Tripathy, A.K. Parichha & N.Prusty, JJ] Discharge of loan  Orissa Forest Act (14 of 1972), Section 56  Confiscation of vehicle - Held, The Authorities under Section 56 of the Orissa Forest Act, 1972 are not obliged to release the vehicle from the confiscation proceeding or to pay the sale proceeds of the vehicle after the order of confiscation in favour of Orissa State Financial Corporation when such vehicles were purchased on being financed by the Orissa State Financial Corporation and the loan had not been liquidated by the date of the seizure/confiscation of the vehicle. Concept of first charge or second charge has no applicability when the vehicle is not otherwise disposed of to determine the liabilities of the loanee. On the other hand the vehicle having been found indulged in forest offences was made subject matter of a confiscation proceedings, and therefore, the procedure followed for confiscation of the vehicle and for its sale is punitive in nature and not with a view to give benefit to anybody including the Department which initiated the confiscation proceeding. Apart from that, the claim of the Orissa State Financial Corporation as against its loanee (who had taken the vehicle on hire- purchase agreement) brings the loanee and the sureties within the default clause under the State Financial Corporation Act, 1951 or the heirs and successors of such persons. Procedure is provided in the Act, 1951 and the Rules thereof about the manner in which such loan is to be recovered, and in that context only the vehicle under the hire-purchase agreement is placed as the first charge. If such property is not available for any reason, then the loan is not automatically waived or the loanee and his sureties are not automatically redeemed of the liabilities to repay. The Financial Corporation is concerned with repayment of loan either from the property or persons offered as surety. Thus, a vehicle, which is subject matter of confiscation proceeding under the Act, 1872, being not available to the Orissa State Financial Corporation for adjustment of the unpaid loan, that does not at all bring out an anomalous situation so as to defeat the right of the Orissa State Financial Corporation. Agreement between the Orissa State Financial Corporation and the loanee is a pure and simple contract governed by the provisions of the Contract Act, 1872 read with the provisions in the Act, 1951 and its Rules. On the other hand, a confiscation proceeding under the Act, 1972 is punitive in nature for commission of a forest offence. Thus, by virtue of the provision in Section 56 read with Section 64 (2) of the Act, 1972, the action taken for confiscation of the vehicle cannot be extended to grant protection of the loan advanced by Orissa State Financial Corporation. By doing that it amounts to grant premium to the pick-pockets in as much as, by making payment of the confiscation amount in favour of the Orissa State Financial Corporation the loan burden of the accused of the forest offence is reduced to the extent of the sale proceeds of the vehicle. In other words, on payment of the sale proceeds of the confiscation proceeding to the Orissa State Financial Corporation towards discharge of the loan account of the accused of a forest offence, it would lead to a system to reward him by repayment of his loan. Then it does not become a penalty nor the action become punitive, but it remains as a reward to the accused of forest offence. Such a concept is totally not conceivable from any provision in the Act, 1972 or the Act, 1951. [AIR 2002 Orissa 130 Overruled]. -- STATE FINANCIAL CORPORATIONS ACT, 1951. 
Section 29; Discharge of loan  Orissa Forest Act (14 of 1972), Section 56  Confiscation of vehicle - Held, The Authorities under Section 56 of the Orissa Forest Act, 1972 are not obliged to release the vehicle from the confiscation proceeding or to pay the sale proceeds of the vehicle after the order of confiscation in favour of Orissa State Financial Corporation when such vehicles were purchased on being financed by the Orissa State Financial Corporation and the loan had not been liquidated by the date of the seizure/confiscation of the vehicle. Concept of first charge or second charge has no applicability when the vehicle is not otherwise disposed of to determine the liabilities of the loanee. On the other hand the vehicle having been found indulged in forest offences was made subject matter of a confiscation proceedings, and therefore, the procedure followed for confiscation of the vehicle and for its sale is punitive in nature and not with a view to give benefit to anybody including the Department which initiated the confiscation proceeding. Apart from that, the claim of the Orissa State Financial Corporation as against its loanee (who had taken the vehicle on hire- purchase agreement) brings the loanee and the sureties within the default clause under the State Financial Corporation Act, 1951 or the heirs and successors of such persons. Procedure is provided in the Act, 1951 and the Rules thereof about the manner in which such loan is to be recovered, and in that context only the vehicle under the hire-purchase agreement is placed as the first charge. If such property is not available for any reason, then the loan is not automatically waived or the loanee and his sureties are not automatically redeemed of the liabilities to repay. The Financial Corporation is concerned with repayment of loan either from the property or persons offered as surety. Thus, a vehicle, which is subject matter of confiscation proceeding under the Act, 1872, being not available to the Orissa State Financial Corporation for adjustment of the unpaid loan, that does not at all bring out an anomalous situation so as to defeat the right of the Orissa State Financial Corporation. Agreement between the Orissa State Financial Corporation and the loanee is a pure and simple contract governed by the provisions of the Contract Act, 1872 read with the provisions in the Act, 1951 and its Rules. On the other hand, a confiscation proceeding under the Act, 1972 is punitive in nature for commission of a forest offence. Thus, by virtue of the provision in Section 56 read with Section 64 (2) of the Act, 1972, the action taken for confiscation of the vehicle cannot be extended to grant protection of the loan advanced by Orissa State Financial Corporation. By doing that it amounts to grant premium to the pick-pockets in as much as, by making payment of the confiscation amount in favour of the Orissa State Financial Corporation the loan burden of the accused of the forest offence is reduced to the extent of the sale proceeds of the vehicle. In other words, on payment of the sale proceeds of the confiscation proceeding to the Orissa State Financial Corporation towards discharge of the loan account of the accused of a forest offence, it would lead to a system to reward him by repayment of his loan. Then it does not become a penalty nor the action become punitive, but it remains as a reward to the accused of forest offence. Such a concept is totally not conceivable from any provision in the Act, 1972 or the Act, 1951. [AIR 2002 Orissa 130 Overruled].  -  In that case, the stand of the Revenue was disapproved by the Orissa High Court. 16. Learned Counsel for the petitioner submitted that the photographs taken by the petitioner are not goods which can be sold and is not a marketable commodity like any other goods.',
			'caseanalysis' => null,
			'casesref' => 'Imagic Creative Pvt. Ltd. v. Commissioner of Commercial Taxes and Ors.;',
			'citingcases' => '',
			'counselplain' => '',
			'counseldef' => '',
			'court' => 'Orissa',
			'court_type' => 'HC',
			'decidedon' => '2008-04-02',
			'deposition' => '',
			'favorof' => null,
			'findings' => null,
			'judge' => ' A.K. Ganguly, C.J. and; B.N. Mahapatra, J.',
			'judgement' => '<p style="text-align: justify;">A.K. Ganguly, C.J.</p><p style="text-align: justify;">1. Initially three S.J.Cs. being S.J.C. Nos. 10 of 1997, 8 of 1997 and 9 of 1997 were filed and subsequently renumbered as STREV Nos. 212, 214 and 216 of 2007 respectively. In view of the common questions of facts and law, all the three Revision Applications are heard and disposed of together.</p><p style="text-align: justify;">2. The following questions of law arising out of the order passed by the Orissa Sales Tax Tribunal on 8.12.1993 in Second Appeal Nos. 3345 to 3350 of 1991-92 have been referred to this Hon'ble High Court in terms of the order of this Hon'ble Court dated 24.2.1997. The questions are:</p><p style="text-align: justify;">(i) Whether on the facts and in the circumstances of the case, the Tribunal is right to held that tax is exigible for photographs as execution of works contract ?</p><p style="text-align: justify;">(ii) Whether on the facts and in the circumstances of the case, the conclusion of the Tribunal is perverse due to non-consideration and mis-consideration of facts and law and, therefore, it is liable to be set aside for re-hearing ?</p><p style="text-align: justify;">3. The materials facts out of which those questions arise are that the petitioner carries on the business of processing and developing photography. In the usual course of business, the petitioner takes photographs of persons or of family and then develops the negative by employing his skill and labour and then supplies the photographs to the clients. These photographs which are prepared by the petitioner are not commercial items because they are neither purchased nor sold. However, to develop these photographs employment of skill and labour is essential. It may be mentioned that petitioner does not carry on any sale of photographs of national leaders, God and Goddess.</p><p style="text-align: justify;">4. After the passing of 46th amendment of the Constitution of India and consequent amendments thereto in Orissa Sales Tax Act (OST Act), the Sales Tax Officer, Bhubaneswar-II Circle, Bhubaneswar sent notices to assess the petitioner as an unregistered dealer under Section 12 (5) of the OST Act, inter alia, contending that the petitioner's activities can be called 'works contract'. Pursuant to said notice, the petitioner gave its reply and appeared before the Sales Tax Officer and produced the books of account and documents including Receipts, Purchase Memos, Vouchers, Ledger and thereby denied its liability under the OST Act. The petitioner also submitted objection petitions on various dates i.e. 28.12.1985, 10.1.1986, 20.2.1986 and 29.2.1988 contending, inter alia, that the petitioner has no sales tax liability under OST Act and the notices, which were issued, are without jurisdiction.</p><p style="text-align: justify;">5. Ignoring the said objections of the petitioner, the Sales Tax Officer, Bhubaneswar-II Circle, Bhubaneswar assessed the petitioner as an unregistered dealer, inter alia, holding that the petitioner is liable to pay sales tax as petitioner has been alleged to carry activities of 'works contract'. Therefore, orders of assessment being dated 29.2.1988 for the years 1984-85 (9/84 to 3/85), 1985-86 and 1986- 87 under Section 12(5) of OST Act and under Rule 5 of the Orissa Additional Sales Tax Rules, 1975 were passed and a tax of Rs. 20,765.00 and penalty of Rs. 5,000.00 totalling to Rs. 25,765.00 was imposed on the petitioner. The petitioner then filed the First Appeal before the learned Assistant Commissioner of Sales Tax. The First Appellate Authority by an order dated 27.9.1991 confirmed the levy of tax under the OST Act, but reduced the penalty to Rs. 1250.00. Thereupon, the petitioner filed the Second Appeal before the Orissa Sales Tax Tribunal, Cuttack. The said Tribunal heard the Second Appeal and in course of hearing, the petitioner raised various contentions. Ultimately, the Tribunal upheld the levy of tax but deleted the penalty.</p><p style="text-align: justify;">6. Thereafter the petitioner came up with a reference application under Section 24(1) of the Orissa Sales Tax Act framing certain questions for being referred to the Hon'ble High Court. The said prayer of the petitioner was rejected by the Tribunal. Then the petitioner moved Hon'ble High Court under Section 24(2)(b) of the Orissa Sales Tax Act, 1947 whereupon the High Court directed the Tribunal to state to case and refer the questions under Section 24(3) of the OST Act for a decision of the High Court.</p><p style="text-align: justify;">7. Accordingly, the Tribunal stated the case and referred the aforesaid questions for a decision of the High Court.</p><p style="text-align: justify;">8. Learned Counsel for the petitioner before the High Court submitted that in the transaction in question, there is no contract of sale between the petitioner and the client. It is only a contract of service and the photographs, which the petitioner produced by supplying the same has no commercial value and are not marketable. So, there is no question of a works contract. It is the consistent stand of the petitioner that the present photographs which are produced by the petitioner have no utility or value to any other person than the customer. By developing such photographs, the petitioner only renders service to his customers. The customer pays for the service rendered by the petitioner. It is the contention of the petitioner that his activity is similar to that of consulting firm preparing plan and sketches pursuant to client's specification or professional giving opinion on papers. All those activities are done to serve the client. Therefore, this does not come within the purview of the definition of 'goods', 'sale', 'dealer' or 'works contract'. It is the petitioner's case that he purchased the goods, namely, papers on payment of sales tax. Further levy of tax on the personal service rendered to the client of the petitioner will amount to double taxation. It is also the contention of the petitioner that the paper which is used in the photography are incidental and insignificant.</p><p style="text-align: justify;">9. In support of its contention, learned Counsel for the petitioner has relied on several judgments. First reliance was place on the judgment of the Supreme Court in the case of Sales Tax Officer v. B.C. Kame reported in 39 STC 237(SC). At page 241 of the report, learned Judges of the Supreme Court held that a photographer takes the photograph and develops the negatives and does other photographic work and thereafter supplies the prints to his client. By doing so he cannot be said to enter into a contract for sale of goods. On the other hand, the contract is for use of skill and labour by the photographer to bring about the desired result. Learned Judges held that the job of a photographer is a contract for work and labour and it is not a contract of sale.</p><p style="text-align: justify;">10. Reliance was also placed on a judgment of this High Court in the case of Photo Emporium v. Addl. District Magistrate reported in 77 STC 199 in which this High Court followed the ratio of the judgment of the Supreme Court in the case of B.C. Kame. In that case, the stand of the Revenue was disapproved by the Orissa High Court.</p><p style="text-align: justify;">11. Similar view was taken in 110 STC 145 in the case of Foto Colour Labs Pvt. Ltd. v. Commercial Taxes Officer where the Tribunal held that the transfer of paper in the photograph is purely incidental and payment is only taken to give positive prints and not to get the photo papers. Therefore, the contract in between the petitioner and his client is not a contract of sale, and neither directly or indirectly works contract is involved in the supply of photo papers. Similar view was taken by the West Bengal Taxation Tribunal in the case of Studio Kamalalaya v. Commercial Tax Officer reported in 89 STC 307.</p><p style="text-align: justify;">12. In the case of Bavens v. Onion of India report in 97 STC 161, learned Judges held that when a photographer takes a photograph of his customer, he develops the negative and supplies positive prints in the desired size to the customer. In doing so the photographer uses his own camera and his own film. The negative belongs to the photographer and not to the customer. No basic goods are provided by the customer which are subjected to processing by the photographer so as to make the contract a works contract. There is no accretion to goods or property or the nucleus of a property which belongs to the customer. It is the skill of the photographer which is most important to get the desired result.</p><p style="text-align: justify;">13. Hon'ble Karnataka High Court followed the same principle in the case of Keshoram Surlndranath Photo-mag Pvt. Ltd. v. Assistant Commissioner of Commercial Taxes reported in 121 STC 175. In that judgment, learned Judges of the Karnataka High Court relied on the judgment of the Supreme Court in B.C. Kame's case and came to the conclusion that in the job of the photographer in supplying positive prints to his customer, no works contract is involved and photographs are not marketable or saleable commodity and as such no tax can be levied on it.</p><p style="text-align: justify;">14. Against the said judgment of the Karnataka High Court, the State of Karnataka High Court filed a S.L.P. before the Hon'ble Supreme Court bearing SLP Nos. 6136-6163 of 2000 and the Hon'ble Supreme Court dismissed the SLP on 20th April, 2000.</p><p style="text-align: justify;">15. In the case of Rainbow Colour Lab v. State of M.P. learned Judges of the Hon'ble Supreme Court reiterated its judgment in B.C. Kame's case and came to the following conclusion:</p><p style="text-align: justify;">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.</p><p style="text-align: justify;">Hon'ble Supreme Court in Bharat Sanchar Nigam Ltd. v. Union of India reported in 145 STC 91 again reiterated the principle in B.C. Kame's case and held that the work done by the photographer is only in the nature of a service contract not involving any sale of goods and held that the stand taken by the State cannot be sustained.</p><p style="text-align: justify;">16. Learned Counsel for the petitioner submitted that the photographs taken by the petitioner are not goods which can be sold and is not a marketable commodity like any other goods. When the copies of photographs are made out, they have no utility or value to any other person than the customer. It is already admitted that the papers utilized for photographs are tax paid goods. Therefore, it is contended by the learned Counsel for the petitioner that the work of photography does not come within the purview of works contract as defined in Section 2(jj) of the Orissa Sales Tax Act.</p><p style="text-align: justify;">17. Learned Counsel for the Revenue in this case virtually did not contest the submission made by the learned Counsel for the petitioner and in support of his contention, learned Counsel for the Revenue relied on a decision of the Supreme Court in the case of Imagic Creative Pvt. Ltd. v. Commissioner of Commercial Taxes and Ors. reported in (2008) 10 RC 236. In that judgment, learned Judges held that since the contract in question is a service contract, it is difficult to hold that in a case of this nature, sales tax would be payable on the value of the entire contract irrespective of the element of service provided.</p><p style="text-align: justify;">For the reasons discussed above, we answer the first question in the negative and the second question, in the affirmative. We thus answer both the questions in favour of the assessee and against the Revenue.</p><p style="text-align: justify;">The three revision applications are thus disposed of.</p><p style="text-align: justify;">No costs.</p><p style="text-align: justify;">B.N. Mahapatra, J.</p><p style="text-align: justify;">18. I agree.<p style="text-align: justify;"></p><p style="text-align: justify;">',
			'observations' => null,
			'overruledby' => null,
			'prhistory' => '',
			'pubs' => '106(2008)CLT317; 2008(I)OLR953; (2008)17VST289(Orissa)',
			'ratiodecidendi' => '',
			'respondent' => 'Commissioner of Sales Tax',
			'sub' => 'Sales Tax/VAT',
			'link' => null,
			'circuit' => null
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$title_for_layout = 'Studio Sujata Vs Commissioner of Sales Tax - Citation 531271 - Court Judgment | '
$desc = array(
	'Judgement' => array(
		'id' => '531271',
		'acts' => '',
		'appealno' => '',
		'appellant' => 'Studio Sujata',
		'authreffered' => '',
		'casename' => 'Studio Sujata Vs. Commissioner of Sales Tax',
		'casenote' => 'Sales Tax - Assessment - Contract of Sale - Section 12 (5) of Orissa Sales Tax 1947 - Petitioner carries on business of processing and developing photography - Revenue assessed petitioner under Section 12(5) of Act on ground that activities of petitioner can be called works contract - Petitioner approached to Assistant of Sales Tax on ground that there is no contract of sale between the petitioner and the client, it is only service - Dismissed and affirmed by Tribunal - Hence present petition - Whether Tribunal is right to held that tax is exigible for photographs as execution of works contract or not? - Held, as per precedent laid down by Supreme Court in case of Sales Tax Officer v. B.C. Kame that photographer takes photograph and develops negatives and does other photographic work and thereafter supplies prints to his client - By doing so he cannot be said to enter into contract for sale of goods - Therefore, job of photographer is contract for work and labour and it is not contract of sale - Revenue committed mistake in assessing petitioner under Section 12(5) of Act on basis of contract of sale - Petition disposed of accordingly  - STATE FINANCIAL CORPORATIONS ACT, 1951 [63/1951]. Section 29; [P.K. Tripathy, A.K. Parichha & N.Prusty, JJ] Discharge of loan  Orissa Forest Act (14 of 1972), Section 56  Confiscation of vehicle - Held, The Authorities under Section 56 of the Orissa Forest Act, 1972 are not obliged to release the vehicle from the confiscation proceeding or to pay the sale proceeds of the vehicle after the order of confiscation in favour of Orissa State Financial Corporation when such vehicles were purchased on being financed by the Orissa State Financial Corporation and the loan had not been liquidated by the date of the seizure/confiscation of the vehicle. Concept of first charge or second charge has no applicability when the vehicle is not otherwise disposed of to determine the liabilities of the loanee. On the other hand the vehicle having been found indulged in forest offences was made subject matter of a confiscation proceedings, and therefore, the procedure followed for confiscation of the vehicle and for its sale is punitive in nature and not with a view to give benefit to anybody including the Department which initiated the confiscation proceeding. Apart from that, the claim of the Orissa State Financial Corporation as against its loanee (who had taken the vehicle on hire- purchase agreement) brings the loanee and the sureties within the default clause under the State Financial Corporation Act, 1951 or the heirs and successors of such persons. Procedure is provided in the Act, 1951 and the Rules thereof about the manner in which such loan is to be recovered, and in that context only the vehicle under the hire-purchase agreement is placed as the first charge. If such property is not available for any reason, then the loan is not automatically waived or the loanee and his sureties are not automatically redeemed of the liabilities to repay. The Financial Corporation is concerned with repayment of loan either from the property or persons offered as surety. Thus, a vehicle, which is subject matter of confiscation proceeding under the Act, 1872, being not available to the Orissa State Financial Corporation for adjustment of the unpaid loan, that does not at all bring out an anomalous situation so as to defeat the right of the Orissa State Financial Corporation. Agreement between the Orissa State Financial Corporation and the loanee is a pure and simple contract governed by the provisions of the Contract Act, 1872 read with the provisions in the Act, 1951 and its Rules. On the other hand, a confiscation proceeding under the Act, 1972 is punitive in nature for commission of a forest offence. Thus, by virtue of the provision in Section 56 read with Section 64 (2) of the Act, 1972, the action taken for confiscation of the vehicle cannot be extended to grant protection of the loan advanced by Orissa State Financial Corporation. By doing that it amounts to grant premium to the pick-pockets in as much as, by making payment of the confiscation amount in favour of the Orissa State Financial Corporation the loan burden of the accused of the forest offence is reduced to the extent of the sale proceeds of the vehicle. In other words, on payment of the sale proceeds of the confiscation proceeding to the Orissa State Financial Corporation towards discharge of the loan account of the accused of a forest offence, it would lead to a system to reward him by repayment of his loan. Then it does not become a penalty nor the action become punitive, but it remains as a reward to the accused of forest offence. Such a concept is totally not conceivable from any provision in the Act, 1972 or the Act, 1951. [AIR 2002 Orissa 130 Overruled]. -- STATE FINANCIAL CORPORATIONS ACT, 1951. 
Section 29; Discharge of loan  Orissa Forest Act (14 of 1972), Section 56  Confiscation of vehicle - Held, The Authorities under Section 56 of the Orissa Forest Act, 1972 are not obliged to release the vehicle from the confiscation proceeding or to pay the sale proceeds of the vehicle after the order of confiscation in favour of Orissa State Financial Corporation when such vehicles were purchased on being financed by the Orissa State Financial Corporation and the loan had not been liquidated by the date of the seizure/confiscation of the vehicle. Concept of first charge or second charge has no applicability when the vehicle is not otherwise disposed of to determine the liabilities of the loanee. On the other hand the vehicle having been found indulged in forest offences was made subject matter of a confiscation proceedings, and therefore, the procedure followed for confiscation of the vehicle and for its sale is punitive in nature and not with a view to give benefit to anybody including the Department which initiated the confiscation proceeding. Apart from that, the claim of the Orissa State Financial Corporation as against its loanee (who had taken the vehicle on hire- purchase agreement) brings the loanee and the sureties within the default clause under the State Financial Corporation Act, 1951 or the heirs and successors of such persons. Procedure is provided in the Act, 1951 and the Rules thereof about the manner in which such loan is to be recovered, and in that context only the vehicle under the hire-purchase agreement is placed as the first charge. If such property is not available for any reason, then the loan is not automatically waived or the loanee and his sureties are not automatically redeemed of the liabilities to repay. The Financial Corporation is concerned with repayment of loan either from the property or persons offered as surety. Thus, a vehicle, which is subject matter of confiscation proceeding under the Act, 1872, being not available to the Orissa State Financial Corporation for adjustment of the unpaid loan, that does not at all bring out an anomalous situation so as to defeat the right of the Orissa State Financial Corporation. Agreement between the Orissa State Financial Corporation and the loanee is a pure and simple contract governed by the provisions of the Contract Act, 1872 read with the provisions in the Act, 1951 and its Rules. On the other hand, a confiscation proceeding under the Act, 1972 is punitive in nature for commission of a forest offence. Thus, by virtue of the provision in Section 56 read with Section 64 (2) of the Act, 1972, the action taken for confiscation of the vehicle cannot be extended to grant protection of the loan advanced by Orissa State Financial Corporation. By doing that it amounts to grant premium to the pick-pockets in as much as, by making payment of the confiscation amount in favour of the Orissa State Financial Corporation the loan burden of the accused of the forest offence is reduced to the extent of the sale proceeds of the vehicle. In other words, on payment of the sale proceeds of the confiscation proceeding to the Orissa State Financial Corporation towards discharge of the loan account of the accused of a forest offence, it would lead to a system to reward him by repayment of his loan. Then it does not become a penalty nor the action become punitive, but it remains as a reward to the accused of forest offence. Such a concept is totally not conceivable from any provision in the Act, 1972 or the Act, 1951. [AIR 2002 Orissa 130 Overruled].  -  In that case, the stand of the Revenue was disapproved by the Orissa High Court. 16. Learned Counsel for the petitioner submitted that the photographs taken by the petitioner are not goods which can be sold and is not a marketable commodity like any other goods.',
		'caseanalysis' => null,
		'casesref' => 'Imagic Creative Pvt. Ltd. v. Commissioner of Commercial Taxes and Ors.;',
		'citingcases' => '',
		'counselplain' => '',
		'counseldef' => '',
		'court' => 'Orissa',
		'court_type' => 'HC',
		'decidedon' => '2008-04-02',
		'deposition' => '',
		'favorof' => null,
		'findings' => null,
		'judge' => ' A.K. Ganguly, C.J. and; B.N. Mahapatra, J.',
		'judgement' => '<p>A.K. Ganguly, C.J.</p><p>1. Initially three S.J.Cs. being S.J.C. Nos. 10 of 1997, 8 of 1997 and 9 of 1997 were filed and subsequently renumbered as STREV Nos. 212, 214 and 216 of 2007 respectively. In view of the common questions of facts and law, all the three Revision Applications are heard and disposed of together.</p><p>2. The following questions of law arising out of the order passed by the Orissa Sales Tax Tribunal on 8.12.1993 in Second Appeal Nos. 3345 to 3350 of 1991-92 have been referred to this Hon'ble High Court in terms of the order of this Hon'ble Court dated 24.2.1997. The questions are:</p><p>(i) Whether on the facts and in the circumstances of the case, the Tribunal is right to held that tax is exigible for photographs as execution of works contract ?</p><p>(ii) Whether on the facts and in the circumstances of the case, the conclusion of the Tribunal is perverse due to non-consideration and mis-consideration of facts and law and, therefore, it is liable to be set aside for re-hearing ?</p><p>3. The materials facts out of which those questions arise are that the petitioner carries on the business of processing and developing photography. In the usual course of business, the petitioner takes photographs of persons or of family and then develops the negative by employing his skill and labour and then supplies the photographs to the clients. These photographs which are prepared by the petitioner are not commercial items because they are neither purchased nor sold. However, to develop these photographs employment of skill and labour is essential. It may be mentioned that petitioner does not carry on any sale of photographs of national leaders, God and Goddess.</p><p>4. After the passing of 46th amendment of the Constitution of India and consequent amendments thereto in Orissa Sales Tax Act (OST Act), the Sales Tax Officer, Bhubaneswar-II Circle, Bhubaneswar sent notices to assess the petitioner as an unregistered dealer under Section 12 (5) of the OST Act, inter alia, contending that the petitioner's activities can be called 'works contract'. Pursuant to said notice, the petitioner gave its reply and appeared before the Sales Tax Officer and produced the books of account and documents including Receipts, Purchase Memos, Vouchers, Ledger and thereby denied its liability under the OST Act. The petitioner also submitted objection petitions on various dates i.e. 28.12.1985, 10.1.1986, 20.2.1986 and 29.2.1988 contending, inter alia, that the petitioner has no sales tax liability under OST Act and the notices, which were issued, are without jurisdiction.</p><p>5. Ignoring the said objections of the petitioner, the Sales Tax Officer, Bhubaneswar-II Circle, Bhubaneswar assessed the petitioner as an unregistered dealer, inter alia, holding that the petitioner is liable to pay sales tax as petitioner has been alleged to carry activities of 'works contract'. Therefore, orders of assessment being dated 29.2.1988 for the years 1984-85 (9/84 to 3/85), 1985-86 and 1986- 87 under Section 12(5) of OST Act and under Rule 5 of the Orissa Additional Sales Tax Rules, 1975 were passed and a tax of Rs. 20,765.00 and penalty of Rs. 5,000.00 totalling to Rs. 25,765.00 was imposed on the petitioner. The petitioner then filed the First Appeal before the learned Assistant Commissioner of Sales Tax. The First Appellate Authority by an order dated 27.9.1991 confirmed the levy of tax under the OST Act, but reduced the penalty to Rs. 1250.00. Thereupon, the petitioner filed the Second Appeal before the Orissa Sales Tax Tribunal, Cuttack. The said Tribunal heard the Second Appeal and in course of hearing, the petitioner raised various contentions. Ultimately, the Tribunal upheld the levy of tax but deleted the penalty.</p><p>6. Thereafter the petitioner came up with a reference application under Section 24(1) of the Orissa Sales Tax Act framing certain questions for being referred to the Hon'ble High Court. The said prayer of the petitioner was rejected by the Tribunal. Then the petitioner moved Hon'ble High Court under Section 24(2)(b) of the Orissa Sales Tax Act, 1947 whereupon the High Court directed the Tribunal to state to case and refer the questions under Section 24(3) of the OST Act for a decision of the High Court.</p><p>7. Accordingly, the Tribunal stated the case and referred the aforesaid questions for a decision of the High Court.</p><p>8. Learned Counsel for the petitioner before the High Court submitted that in the transaction in question, there is no contract of sale between the petitioner and the client. It is only a contract of service and the photographs, which the petitioner produced by supplying the same has no commercial value and are not marketable. So, there is no question of a works contract. It is the consistent stand of the petitioner that the present photographs which are produced by the petitioner have no utility or value to any other person than the customer. By developing such photographs, the petitioner only renders service to his customers. The customer pays for the service rendered by the petitioner. It is the contention of the petitioner that his activity is similar to that of consulting firm preparing plan and sketches pursuant to client's specification or professional giving opinion on papers. All those activities are done to serve the client. Therefore, this does not come within the purview of the definition of 'goods', 'sale', 'dealer' or 'works contract'. It is the petitioner's case that he purchased the goods, namely, papers on payment of sales tax. Further levy of tax on the personal service rendered to the client of the petitioner will amount to double taxation. It is also the contention of the petitioner that the paper which is used in the photography are incidental and insignificant.</p><p>9. In support of its contention, learned Counsel for the petitioner has relied on several judgments. First reliance was place on the judgment of the Supreme Court in the case of Sales Tax Officer v. B.C. Kame reported in 39 STC 237(SC). At page 241 of the report, learned Judges of the Supreme Court held that a photographer takes the photograph and develops the negatives and does other photographic work and thereafter supplies the prints to his client. By doing so he cannot be said to enter into a contract for sale of goods. On the other hand, the contract is for use of skill and labour by the photographer to bring about the desired result. Learned Judges held that the job of a photographer is a contract for work and labour and it is not a contract of sale.</p><p>10. Reliance was also placed on a judgment of this High Court in the case of Photo Emporium v. Addl. District Magistrate reported in 77 STC 199 in which this High Court followed the ratio of the judgment of the Supreme Court in the case of B.C. Kame. In that case, the stand of the Revenue was disapproved by the Orissa High Court.</p><p>11. Similar view was taken in 110 STC 145 in the case of Foto Colour Labs Pvt. Ltd. v. Commercial Taxes Officer where the Tribunal held that the transfer of paper in the photograph is purely incidental and payment is only taken to give positive prints and not to get the photo papers. Therefore, the contract in between the petitioner and his client is not a contract of sale, and neither directly or indirectly works contract is involved in the supply of photo papers. Similar view was taken by the West Bengal Taxation Tribunal in the case of Studio Kamalalaya v. Commercial Tax Officer reported in 89 STC 307.</p><p>12. In the case of Bavens v. Onion of India report in 97 STC 161, learned Judges held that when a photographer takes a photograph of his customer, he develops the negative and supplies positive prints in the desired size to the customer. In doing so the photographer uses his own camera and his own film. The negative belongs to the photographer and not to the customer. No basic goods are provided by the customer which are subjected to processing by the photographer so as to make the contract a works contract. There is no accretion to goods or property or the nucleus of a property which belongs to the customer. It is the skill of the photographer which is most important to get the desired result.</p><p>13. Hon'ble Karnataka High Court followed the same principle in the case of Keshoram Surlndranath Photo-mag Pvt. Ltd. v. Assistant Commissioner of Commercial Taxes reported in 121 STC 175. In that judgment, learned Judges of the Karnataka High Court relied on the judgment of the Supreme Court in B.C. Kame's case and came to the conclusion that in the job of the photographer in supplying positive prints to his customer, no works contract is involved and photographs are not marketable or saleable commodity and as such no tax can be levied on it.</p><p>14. Against the said judgment of the Karnataka High Court, the State of Karnataka High Court filed a S.L.P. before the Hon'ble Supreme Court bearing SLP Nos. 6136-6163 of 2000 and the Hon'ble Supreme Court dismissed the SLP on 20th April, 2000.</p><p>15. In the case of Rainbow Colour Lab v. State of M.P. learned Judges of the Hon'ble Supreme Court reiterated its judgment in B.C. Kame's case and came to the following conclusion:</p><p>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.</p><p>Hon'ble Supreme Court in Bharat Sanchar Nigam Ltd. v. Union of India reported in 145 STC 91 again reiterated the principle in B.C. Kame's case and held that the work done by the photographer is only in the nature of a service contract not involving any sale of goods and held that the stand taken by the State cannot be sustained.</p><p>16. Learned Counsel for the petitioner submitted that the photographs taken by the petitioner are not goods which can be sold and is not a marketable commodity like any other goods. When the copies of photographs are made out, they have no utility or value to any other person than the customer. It is already admitted that the papers utilized for photographs are tax paid goods. Therefore, it is contended by the learned Counsel for the petitioner that the work of photography does not come within the purview of works contract as defined in Section 2(jj) of the Orissa Sales Tax Act.</p><p>17. Learned Counsel for the Revenue in this case virtually did not contest the submission made by the learned Counsel for the petitioner and in support of his contention, learned Counsel for the Revenue relied on a decision of the Supreme Court in the case of Imagic Creative Pvt. Ltd. v. Commissioner of Commercial Taxes and Ors. reported in (2008) 10 RC 236. In that judgment, learned Judges held that since the contract in question is a service contract, it is difficult to hold that in a case of this nature, sales tax would be payable on the value of the entire contract irrespective of the element of service provided.</p><p>For the reasons discussed above, we answer the first question in the negative and the second question, in the affirmative. We thus answer both the questions in favour of the assessee and against the Revenue.</p><p>The three revision applications are thus disposed of.</p><p>No costs.</p><p>B.N. Mahapatra, J.</p><p>18. I agree.<p></p><p>',
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		'pubs' => '106(2008)CLT317; 2008(I)OLR953; (2008)17VST289(Orissa)',
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		'sub' => 'Sales Tax/VAT',
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	(int) 0 => '<p>A.K. Ganguly, C.J.',
	(int) 1 => '<p>1. Initially three S.J.Cs. being S.J.C. Nos. 10 of 1997, 8 of 1997 and 9 of 1997 were filed and subsequently renumbered as STREV Nos. 212, 214 and 216 of 2007 respectively. In view of the common questions of facts and law, all the three Revision Applications are heard and disposed of together.',
	(int) 2 => '<p>2. The following questions of law arising out of the order passed by the Orissa Sales Tax Tribunal on 8.12.1993 in Second Appeal Nos. 3345 to 3350 of 1991-92 have been referred to this Hon'ble High Court in terms of the order of this Hon'ble Court dated 24.2.1997. The questions are:',
	(int) 3 => '<p>(i) Whether on the facts and in the circumstances of the case, the Tribunal is right to held that tax is exigible for photographs as execution of works contract ?',
	(int) 4 => '<p>(ii) Whether on the facts and in the circumstances of the case, the conclusion of the Tribunal is perverse due to non-consideration and mis-consideration of facts and law and, therefore, it is liable to be set aside for re-hearing ?',
	(int) 5 => '<p>3. The materials facts out of which those questions arise are that the petitioner carries on the business of processing and developing photography. In the usual course of business, the petitioner takes photographs of persons or of family and then develops the negative by employing his skill and labour and then supplies the photographs to the clients. These photographs which are prepared by the petitioner are not commercial items because they are neither purchased nor sold. However, to develop these photographs employment of skill and labour is essential. It may be mentioned that petitioner does not carry on any sale of photographs of national leaders, God and Goddess.',
	(int) 6 => '<p>4. After the passing of 46th amendment of the Constitution of India and consequent amendments thereto in Orissa Sales Tax Act (OST Act), the Sales Tax Officer, Bhubaneswar-II Circle, Bhubaneswar sent notices to assess the petitioner as an unregistered dealer under Section 12 (5) of the OST Act, inter alia, contending that the petitioner's activities can be called 'works contract'. Pursuant to said notice, the petitioner gave its reply and appeared before the Sales Tax Officer and produced the books of account and documents including Receipts, Purchase Memos, Vouchers, Ledger and thereby denied its liability under the OST Act. The petitioner also submitted objection petitions on various dates i.e. 28.12.1985, 10.1.1986, 20.2.1986 and 29.2.1988 contending, inter alia, that the petitioner has no sales tax liability under OST Act and the notices, which were issued, are without jurisdiction.',
	(int) 7 => '<p>5. Ignoring the said objections of the petitioner, the Sales Tax Officer, Bhubaneswar-II Circle, Bhubaneswar assessed the petitioner as an unregistered dealer, inter alia, holding that the petitioner is liable to pay sales tax as petitioner has been alleged to carry activities of 'works contract'. Therefore, orders of assessment being dated 29.2.1988 for the years 1984-85 (9/84 to 3/85), 1985-86 and 1986- 87 under Section 12(5) of OST Act and under Rule 5 of the Orissa Additional Sales Tax Rules, 1975 were passed and a tax of Rs. 20,765.00 and penalty of Rs. 5,000.00 totalling to Rs. 25,765.00 was imposed on the petitioner. The petitioner then filed the First Appeal before the learned Assistant Commissioner of Sales Tax. The First Appellate Authority by an order dated 27.9.1991 confirmed the levy of tax under the OST Act, but reduced the penalty to Rs. 1250.00. Thereupon, the petitioner filed the Second Appeal before the Orissa Sales Tax Tribunal, Cuttack. The said Tribunal heard the Second Appeal and in course of hearing, the petitioner raised various contentions. Ultimately, the Tribunal upheld the levy of tax but deleted the penalty.',
	(int) 8 => '<p>6. Thereafter the petitioner came up with a reference application under Section 24(1) of the Orissa Sales Tax Act framing certain questions for being referred to the Hon'ble High Court. The said prayer of the petitioner was rejected by the Tribunal. Then the petitioner moved Hon'ble High Court under Section 24(2)(b) of the Orissa Sales Tax Act, 1947 whereupon the High Court directed the Tribunal to state to case and refer the questions under Section 24(3) of the OST Act for a decision of the High Court.',
	(int) 9 => '<p>7. Accordingly, the Tribunal stated the case and referred the aforesaid questions for a decision of the High Court.',
	(int) 10 => '<p>8. Learned Counsel for the petitioner before the High Court submitted that in the transaction in question, there is no contract of sale between the petitioner and the client. It is only a contract of service and the photographs, which the petitioner produced by supplying the same has no commercial value and are not marketable. So, there is no question of a works contract. It is the consistent stand of the petitioner that the present photographs which are produced by the petitioner have no utility or value to any other person than the customer. By developing such photographs, the petitioner only renders service to his customers. The customer pays for the service rendered by the petitioner. It is the contention of the petitioner that his activity is similar to that of consulting firm preparing plan and sketches pursuant to client's specification or professional giving opinion on papers. All those activities are done to serve the client. Therefore, this does not come within the purview of the definition of 'goods', 'sale', 'dealer' or 'works contract'. It is the petitioner's case that he purchased the goods, namely, papers on payment of sales tax. Further levy of tax on the personal service rendered to the client of the petitioner will amount to double taxation. It is also the contention of the petitioner that the paper which is used in the photography are incidental and insignificant.',
	(int) 11 => '<p>9. In support of its contention, learned Counsel for the petitioner has relied on several judgments. First reliance was place on the judgment of the Supreme Court in the case of Sales Tax Officer v. B.C. Kame reported in 39 STC 237(SC). At page 241 of the report, learned Judges of the Supreme Court held that a photographer takes the photograph and develops the negatives and does other photographic work and thereafter supplies the prints to his client. By doing so he cannot be said to enter into a contract for sale of goods. On the other hand, the contract is for use of skill and labour by the photographer to bring about the desired result. Learned Judges held that the job of a photographer is a contract for work and labour and it is not a contract of sale.',
	(int) 12 => '<p>10. Reliance was also placed on a judgment of this High Court in the case of Photo Emporium v. Addl. District Magistrate reported in 77 STC 199 in which this High Court followed the ratio of the judgment of the Supreme Court in the case of B.C. Kame. In that case, the stand of the Revenue was disapproved by the Orissa High Court.',
	(int) 13 => '<p>11. Similar view was taken in 110 STC 145 in the case of Foto Colour Labs Pvt. Ltd. v. Commercial Taxes Officer where the Tribunal held that the transfer of paper in the photograph is purely incidental and payment is only taken to give positive prints and not to get the photo papers. Therefore, the contract in between the petitioner and his client is not a contract of sale, and neither directly or indirectly works contract is involved in the supply of photo papers. Similar view was taken by the West Bengal Taxation Tribunal in the case of Studio Kamalalaya v. Commercial Tax Officer reported in 89 STC 307.',
	(int) 14 => '<p>12. In the case of Bavens v. Onion of India report in 97 STC 161, learned Judges held that when a photographer takes a photograph of his customer, he develops the negative and supplies positive prints in the desired size to the customer. In doing so the photographer uses his own camera and his own film. The negative belongs to the photographer and not to the customer. No basic goods are provided by the customer which are subjected to processing by the photographer so as to make the contract a works contract. There is no accretion to goods or property or the nucleus of a property which belongs to the customer. It is the skill of the photographer which is most important to get the desired result.',
	(int) 15 => '<p>13. Hon'ble Karnataka High Court followed the same principle in the case of Keshoram Surlndranath Photo-mag Pvt. Ltd. v. Assistant Commissioner of Commercial Taxes reported in 121 STC 175. In that judgment, learned Judges of the Karnataka High Court relied on the judgment of the Supreme Court in B.C. Kame's case and came to the conclusion that in the job of the photographer in supplying positive prints to his customer, no works contract is involved and photographs are not marketable or saleable commodity and as such no tax can be levied on it.',
	(int) 16 => '<p>14. Against the said judgment of the Karnataka High Court, the State of Karnataka High Court filed a S.L.P. before the Hon'ble Supreme Court bearing SLP Nos. 6136-6163 of 2000 and the Hon'ble Supreme Court dismissed the SLP on 20th April, 2000.',
	(int) 17 => '<p>15. In the case of Rainbow Colour Lab v. State of M.P. learned Judges of the Hon'ble Supreme Court reiterated its judgment in B.C. Kame's case and came to the following conclusion:',
	(int) 18 => '<p>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.',
	(int) 19 => '<p>Hon'ble Supreme Court in Bharat Sanchar Nigam Ltd. v. Union of India reported in 145 STC 91 again reiterated the principle in B.C. Kame's case and held that the work done by the photographer is only in the nature of a service contract not involving any sale of goods and held that the stand taken by the State cannot be sustained.',
	(int) 20 => '<p>16. Learned Counsel for the petitioner submitted that the photographs taken by the petitioner are not goods which can be sold and is not a marketable commodity like any other goods. When the copies of photographs are made out, they have no utility or value to any other person than the customer. It is already admitted that the papers utilized for photographs are tax paid goods. Therefore, it is contended by the learned Counsel for the petitioner that the work of photography does not come within the purview of works contract as defined in Section 2(jj) of the Orissa Sales Tax Act.',
	(int) 21 => '<p>17. Learned Counsel for the Revenue in this case virtually did not contest the submission made by the learned Counsel for the petitioner and in support of his contention, learned Counsel for the Revenue relied on a decision of the Supreme Court in the case of Imagic Creative Pvt. Ltd. v. Commissioner of Commercial Taxes and Ors. reported in (2008) 10 RC 236. In that judgment, learned Judges held that since the contract in question is a service contract, it is difficult to hold that in a case of this nature, sales tax would be payable on the value of the entire contract irrespective of the element of service provided.',
	(int) 22 => '<p>For the reasons discussed above, we answer the first question in the negative and the second question, in the affirmative. We thus answer both the questions in favour of the assessee and against the Revenue.',
	(int) 23 => '<p>The three revision applications are thus disposed of.',
	(int) 24 => '<p>No costs.',
	(int) 25 => '<p>B.N. Mahapatra, J.',
	(int) 26 => '<p>18. I agree.<p>',
	(int) 27 => '<p>'
)
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14. Against the said judgment of the Karnataka High Court, the State of Karnataka High Court filed a S.L.P. before the Hon'ble Supreme Court bearing SLP Nos. 6136-6163 of 2000 and the Hon'ble Supreme Court dismissed the SLP on 20th April, 2000.

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	'title_for_layout' => 'Studio Sujata Vs Commissioner of Sales Tax - Citation 531271 - Court Judgment | ',
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		'Judgement' => array(
			'id' => '531271',
			'acts' => '',
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			'appellant' => 'Studio Sujata',
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			'casename' => 'Studio Sujata Vs. Commissioner of Sales Tax',
			'casenote' => 'Sales Tax - Assessment - Contract of Sale - Section 12 (5) of Orissa Sales Tax 1947 - Petitioner carries on business of processing and developing photography - Revenue assessed petitioner under Section 12(5) of Act on ground that activities of petitioner can be called works contract - Petitioner approached to Assistant of Sales Tax on ground that there is no contract of sale between the petitioner and the client, it is only service - Dismissed and affirmed by Tribunal - Hence present petition - Whether Tribunal is right to held that tax is exigible for photographs as execution of works contract or not? - Held, as per precedent laid down by Supreme Court in case of Sales Tax Officer v. B.C. Kame that photographer takes photograph and develops negatives and does other photographic work and thereafter supplies prints to his client - By doing so he cannot be said to enter into contract for sale of goods - Therefore, job of photographer is contract for work and labour and it is not contract of sale - Revenue committed mistake in assessing petitioner under Section 12(5) of Act on basis of contract of sale - Petition disposed of accordingly  - STATE FINANCIAL CORPORATIONS ACT, 1951 [63/1951]. Section 29; [P.K. Tripathy, A.K. Parichha & N.Prusty, JJ] Discharge of loan  Orissa Forest Act (14 of 1972), Section 56  Confiscation of vehicle - Held, The Authorities under Section 56 of the Orissa Forest Act, 1972 are not obliged to release the vehicle from the confiscation proceeding or to pay the sale proceeds of the vehicle after the order of confiscation in favour of Orissa State Financial Corporation when such vehicles were purchased on being financed by the Orissa State Financial Corporation and the loan had not been liquidated by the date of the seizure/confiscation of the vehicle. Concept of first charge or second charge has no applicability when the vehicle is not otherwise disposed of to determine the liabilities of the loanee. On the other hand the vehicle having been found indulged in forest offences was made subject matter of a confiscation proceedings, and therefore, the procedure followed for confiscation of the vehicle and for its sale is punitive in nature and not with a view to give benefit to anybody including the Department which initiated the confiscation proceeding. Apart from that, the claim of the Orissa State Financial Corporation as against its loanee (who had taken the vehicle on hire- purchase agreement) brings the loanee and the sureties within the default clause under the State Financial Corporation Act, 1951 or the heirs and successors of such persons. Procedure is provided in the Act, 1951 and the Rules thereof about the manner in which such loan is to be recovered, and in that context only the vehicle under the hire-purchase agreement is placed as the first charge. If such property is not available for any reason, then the loan is not automatically waived or the loanee and his sureties are not automatically redeemed of the liabilities to repay. The Financial Corporation is concerned with repayment of loan either from the property or persons offered as surety. Thus, a vehicle, which is subject matter of confiscation proceeding under the Act, 1872, being not available to the Orissa State Financial Corporation for adjustment of the unpaid loan, that does not at all bring out an anomalous situation so as to defeat the right of the Orissa State Financial Corporation. Agreement between the Orissa State Financial Corporation and the loanee is a pure and simple contract governed by the provisions of the Contract Act, 1872 read with the provisions in the Act, 1951 and its Rules. On the other hand, a confiscation proceeding under the Act, 1972 is punitive in nature for commission of a forest offence. Thus, by virtue of the provision in Section 56 read with Section 64 (2) of the Act, 1972, the action taken for confiscation of the vehicle cannot be extended to grant protection of the loan advanced by Orissa State Financial Corporation. By doing that it amounts to grant premium to the pick-pockets in as much as, by making payment of the confiscation amount in favour of the Orissa State Financial Corporation the loan burden of the accused of the forest offence is reduced to the extent of the sale proceeds of the vehicle. In other words, on payment of the sale proceeds of the confiscation proceeding to the Orissa State Financial Corporation towards discharge of the loan account of the accused of a forest offence, it would lead to a system to reward him by repayment of his loan. Then it does not become a penalty nor the action become punitive, but it remains as a reward to the accused of forest offence. Such a concept is totally not conceivable from any provision in the Act, 1972 or the Act, 1951. [AIR 2002 Orissa 130 Overruled]. -- STATE FINANCIAL CORPORATIONS ACT, 1951. 
Section 29; Discharge of loan  Orissa Forest Act (14 of 1972), Section 56  Confiscation of vehicle - Held, The Authorities under Section 56 of the Orissa Forest Act, 1972 are not obliged to release the vehicle from the confiscation proceeding or to pay the sale proceeds of the vehicle after the order of confiscation in favour of Orissa State Financial Corporation when such vehicles were purchased on being financed by the Orissa State Financial Corporation and the loan had not been liquidated by the date of the seizure/confiscation of the vehicle. Concept of first charge or second charge has no applicability when the vehicle is not otherwise disposed of to determine the liabilities of the loanee. On the other hand the vehicle having been found indulged in forest offences was made subject matter of a confiscation proceedings, and therefore, the procedure followed for confiscation of the vehicle and for its sale is punitive in nature and not with a view to give benefit to anybody including the Department which initiated the confiscation proceeding. Apart from that, the claim of the Orissa State Financial Corporation as against its loanee (who had taken the vehicle on hire- purchase agreement) brings the loanee and the sureties within the default clause under the State Financial Corporation Act, 1951 or the heirs and successors of such persons. Procedure is provided in the Act, 1951 and the Rules thereof about the manner in which such loan is to be recovered, and in that context only the vehicle under the hire-purchase agreement is placed as the first charge. If such property is not available for any reason, then the loan is not automatically waived or the loanee and his sureties are not automatically redeemed of the liabilities to repay. The Financial Corporation is concerned with repayment of loan either from the property or persons offered as surety. Thus, a vehicle, which is subject matter of confiscation proceeding under the Act, 1872, being not available to the Orissa State Financial Corporation for adjustment of the unpaid loan, that does not at all bring out an anomalous situation so as to defeat the right of the Orissa State Financial Corporation. Agreement between the Orissa State Financial Corporation and the loanee is a pure and simple contract governed by the provisions of the Contract Act, 1872 read with the provisions in the Act, 1951 and its Rules. On the other hand, a confiscation proceeding under the Act, 1972 is punitive in nature for commission of a forest offence. Thus, by virtue of the provision in Section 56 read with Section 64 (2) of the Act, 1972, the action taken for confiscation of the vehicle cannot be extended to grant protection of the loan advanced by Orissa State Financial Corporation. By doing that it amounts to grant premium to the pick-pockets in as much as, by making payment of the confiscation amount in favour of the Orissa State Financial Corporation the loan burden of the accused of the forest offence is reduced to the extent of the sale proceeds of the vehicle. In other words, on payment of the sale proceeds of the confiscation proceeding to the Orissa State Financial Corporation towards discharge of the loan account of the accused of a forest offence, it would lead to a system to reward him by repayment of his loan. Then it does not become a penalty nor the action become punitive, but it remains as a reward to the accused of forest offence. Such a concept is totally not conceivable from any provision in the Act, 1972 or the Act, 1951. [AIR 2002 Orissa 130 Overruled].  -  In that case, the stand of the Revenue was disapproved by the Orissa High Court. 16. Learned Counsel for the petitioner submitted that the photographs taken by the petitioner are not goods which can be sold and is not a marketable commodity like any other goods.',
			'caseanalysis' => null,
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			'judge' => ' A.K. Ganguly, C.J. and; B.N. Mahapatra, J.',
			'judgement' => '<p style="text-align: justify;">A.K. Ganguly, C.J.</p><p style="text-align: justify;">1. Initially three S.J.Cs. being S.J.C. Nos. 10 of 1997, 8 of 1997 and 9 of 1997 were filed and subsequently renumbered as STREV Nos. 212, 214 and 216 of 2007 respectively. In view of the common questions of facts and law, all the three Revision Applications are heard and disposed of together.</p><p style="text-align: justify;">2. The following questions of law arising out of the order passed by the Orissa Sales Tax Tribunal on 8.12.1993 in Second Appeal Nos. 3345 to 3350 of 1991-92 have been referred to this Hon'ble High Court in terms of the order of this Hon'ble Court dated 24.2.1997. The questions are:</p><p style="text-align: justify;">(i) Whether on the facts and in the circumstances of the case, the Tribunal is right to held that tax is exigible for photographs as execution of works contract ?</p><p style="text-align: justify;">(ii) Whether on the facts and in the circumstances of the case, the conclusion of the Tribunal is perverse due to non-consideration and mis-consideration of facts and law and, therefore, it is liable to be set aside for re-hearing ?</p><p style="text-align: justify;">3. The materials facts out of which those questions arise are that the petitioner carries on the business of processing and developing photography. In the usual course of business, the petitioner takes photographs of persons or of family and then develops the negative by employing his skill and labour and then supplies the photographs to the clients. These photographs which are prepared by the petitioner are not commercial items because they are neither purchased nor sold. However, to develop these photographs employment of skill and labour is essential. It may be mentioned that petitioner does not carry on any sale of photographs of national leaders, God and Goddess.</p><p style="text-align: justify;">4. After the passing of 46th amendment of the Constitution of India and consequent amendments thereto in Orissa Sales Tax Act (OST Act), the Sales Tax Officer, Bhubaneswar-II Circle, Bhubaneswar sent notices to assess the petitioner as an unregistered dealer under Section 12 (5) of the OST Act, inter alia, contending that the petitioner's activities can be called 'works contract'. Pursuant to said notice, the petitioner gave its reply and appeared before the Sales Tax Officer and produced the books of account and documents including Receipts, Purchase Memos, Vouchers, Ledger and thereby denied its liability under the OST Act. The petitioner also submitted objection petitions on various dates i.e. 28.12.1985, 10.1.1986, 20.2.1986 and 29.2.1988 contending, inter alia, that the petitioner has no sales tax liability under OST Act and the notices, which were issued, are without jurisdiction.</p><p style="text-align: justify;">5. Ignoring the said objections of the petitioner, the Sales Tax Officer, Bhubaneswar-II Circle, Bhubaneswar assessed the petitioner as an unregistered dealer, inter alia, holding that the petitioner is liable to pay sales tax as petitioner has been alleged to carry activities of 'works contract'. Therefore, orders of assessment being dated 29.2.1988 for the years 1984-85 (9/84 to 3/85), 1985-86 and 1986- 87 under Section 12(5) of OST Act and under Rule 5 of the Orissa Additional Sales Tax Rules, 1975 were passed and a tax of Rs. 20,765.00 and penalty of Rs. 5,000.00 totalling to Rs. 25,765.00 was imposed on the petitioner. The petitioner then filed the First Appeal before the learned Assistant Commissioner of Sales Tax. The First Appellate Authority by an order dated 27.9.1991 confirmed the levy of tax under the OST Act, but reduced the penalty to Rs. 1250.00. Thereupon, the petitioner filed the Second Appeal before the Orissa Sales Tax Tribunal, Cuttack. The said Tribunal heard the Second Appeal and in course of hearing, the petitioner raised various contentions. Ultimately, the Tribunal upheld the levy of tax but deleted the penalty.</p><p style="text-align: justify;">6. Thereafter the petitioner came up with a reference application under Section 24(1) of the Orissa Sales Tax Act framing certain questions for being referred to the Hon'ble High Court. The said prayer of the petitioner was rejected by the Tribunal. Then the petitioner moved Hon'ble High Court under Section 24(2)(b) of the Orissa Sales Tax Act, 1947 whereupon the High Court directed the Tribunal to state to case and refer the questions under Section 24(3) of the OST Act for a decision of the High Court.</p><p style="text-align: justify;">7. Accordingly, the Tribunal stated the case and referred the aforesaid questions for a decision of the High Court.</p><p style="text-align: justify;">8. Learned Counsel for the petitioner before the High Court submitted that in the transaction in question, there is no contract of sale between the petitioner and the client. It is only a contract of service and the photographs, which the petitioner produced by supplying the same has no commercial value and are not marketable. So, there is no question of a works contract. It is the consistent stand of the petitioner that the present photographs which are produced by the petitioner have no utility or value to any other person than the customer. By developing such photographs, the petitioner only renders service to his customers. The customer pays for the service rendered by the petitioner. It is the contention of the petitioner that his activity is similar to that of consulting firm preparing plan and sketches pursuant to client's specification or professional giving opinion on papers. All those activities are done to serve the client. Therefore, this does not come within the purview of the definition of 'goods', 'sale', 'dealer' or 'works contract'. It is the petitioner's case that he purchased the goods, namely, papers on payment of sales tax. Further levy of tax on the personal service rendered to the client of the petitioner will amount to double taxation. It is also the contention of the petitioner that the paper which is used in the photography are incidental and insignificant.</p><p style="text-align: justify;">9. In support of its contention, learned Counsel for the petitioner has relied on several judgments. First reliance was place on the judgment of the Supreme Court in the case of Sales Tax Officer v. B.C. Kame reported in 39 STC 237(SC). At page 241 of the report, learned Judges of the Supreme Court held that a photographer takes the photograph and develops the negatives and does other photographic work and thereafter supplies the prints to his client. By doing so he cannot be said to enter into a contract for sale of goods. On the other hand, the contract is for use of skill and labour by the photographer to bring about the desired result. Learned Judges held that the job of a photographer is a contract for work and labour and it is not a contract of sale.</p><p style="text-align: justify;">10. Reliance was also placed on a judgment of this High Court in the case of Photo Emporium v. Addl. District Magistrate reported in 77 STC 199 in which this High Court followed the ratio of the judgment of the Supreme Court in the case of B.C. Kame. In that case, the stand of the Revenue was disapproved by the Orissa High Court.</p><p style="text-align: justify;">11. Similar view was taken in 110 STC 145 in the case of Foto Colour Labs Pvt. Ltd. v. Commercial Taxes Officer where the Tribunal held that the transfer of paper in the photograph is purely incidental and payment is only taken to give positive prints and not to get the photo papers. Therefore, the contract in between the petitioner and his client is not a contract of sale, and neither directly or indirectly works contract is involved in the supply of photo papers. Similar view was taken by the West Bengal Taxation Tribunal in the case of Studio Kamalalaya v. Commercial Tax Officer reported in 89 STC 307.</p><p style="text-align: justify;">12. In the case of Bavens v. Onion of India report in 97 STC 161, learned Judges held that when a photographer takes a photograph of his customer, he develops the negative and supplies positive prints in the desired size to the customer. In doing so the photographer uses his own camera and his own film. The negative belongs to the photographer and not to the customer. No basic goods are provided by the customer which are subjected to processing by the photographer so as to make the contract a works contract. There is no accretion to goods or property or the nucleus of a property which belongs to the customer. It is the skill of the photographer which is most important to get the desired result.</p><p style="text-align: justify;">13. Hon'ble Karnataka High Court followed the same principle in the case of Keshoram Surlndranath Photo-mag Pvt. Ltd. v. Assistant Commissioner of Commercial Taxes reported in 121 STC 175. In that judgment, learned Judges of the Karnataka High Court relied on the judgment of the Supreme Court in B.C. Kame's case and came to the conclusion that in the job of the photographer in supplying positive prints to his customer, no works contract is involved and photographs are not marketable or saleable commodity and as such no tax can be levied on it.</p><p style="text-align: justify;">14. Against the said judgment of the Karnataka High Court, the State of Karnataka High Court filed a S.L.P. before the Hon'ble Supreme Court bearing SLP Nos. 6136-6163 of 2000 and the Hon'ble Supreme Court dismissed the SLP on 20th April, 2000.</p><p style="text-align: justify;">15. In the case of Rainbow Colour Lab v. State of M.P. learned Judges of the Hon'ble Supreme Court reiterated its judgment in B.C. Kame's case and came to the following conclusion:</p><p style="text-align: justify;">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.</p><p style="text-align: justify;">Hon'ble Supreme Court in Bharat Sanchar Nigam Ltd. v. Union of India reported in 145 STC 91 again reiterated the principle in B.C. Kame's case and held that the work done by the photographer is only in the nature of a service contract not involving any sale of goods and held that the stand taken by the State cannot be sustained.</p><p style="text-align: justify;">16. Learned Counsel for the petitioner submitted that the photographs taken by the petitioner are not goods which can be sold and is not a marketable commodity like any other goods. When the copies of photographs are made out, they have no utility or value to any other person than the customer. It is already admitted that the papers utilized for photographs are tax paid goods. Therefore, it is contended by the learned Counsel for the petitioner that the work of photography does not come within the purview of works contract as defined in Section 2(jj) of the Orissa Sales Tax Act.</p><p style="text-align: justify;">17. Learned Counsel for the Revenue in this case virtually did not contest the submission made by the learned Counsel for the petitioner and in support of his contention, learned Counsel for the Revenue relied on a decision of the Supreme Court in the case of Imagic Creative Pvt. Ltd. v. Commissioner of Commercial Taxes and Ors. reported in (2008) 10 RC 236. In that judgment, learned Judges held that since the contract in question is a service contract, it is difficult to hold that in a case of this nature, sales tax would be payable on the value of the entire contract irrespective of the element of service provided.</p><p style="text-align: justify;">For the reasons discussed above, we answer the first question in the negative and the second question, in the affirmative. We thus answer both the questions in favour of the assessee and against the Revenue.</p><p style="text-align: justify;">The three revision applications are thus disposed of.</p><p style="text-align: justify;">No costs.</p><p style="text-align: justify;">B.N. Mahapatra, J.</p><p style="text-align: justify;">18. I agree.<p style="text-align: justify;"></p><p style="text-align: justify;">',
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$title_for_layout = 'Studio Sujata Vs Commissioner of Sales Tax - Citation 531271 - Court Judgment | '
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	'Judgement' => array(
		'id' => '531271',
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		'appellant' => 'Studio Sujata',
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		'casename' => 'Studio Sujata Vs. Commissioner of Sales Tax',
		'casenote' => 'Sales Tax - Assessment - Contract of Sale - Section 12 (5) of Orissa Sales Tax 1947 - Petitioner carries on business of processing and developing photography - Revenue assessed petitioner under Section 12(5) of Act on ground that activities of petitioner can be called works contract - Petitioner approached to Assistant of Sales Tax on ground that there is no contract of sale between the petitioner and the client, it is only service - Dismissed and affirmed by Tribunal - Hence present petition - Whether Tribunal is right to held that tax is exigible for photographs as execution of works contract or not? - Held, as per precedent laid down by Supreme Court in case of Sales Tax Officer v. B.C. Kame that photographer takes photograph and develops negatives and does other photographic work and thereafter supplies prints to his client - By doing so he cannot be said to enter into contract for sale of goods - Therefore, job of photographer is contract for work and labour and it is not contract of sale - Revenue committed mistake in assessing petitioner under Section 12(5) of Act on basis of contract of sale - Petition disposed of accordingly  - STATE FINANCIAL CORPORATIONS ACT, 1951 [63/1951]. Section 29; [P.K. Tripathy, A.K. Parichha & N.Prusty, JJ] Discharge of loan  Orissa Forest Act (14 of 1972), Section 56  Confiscation of vehicle - Held, The Authorities under Section 56 of the Orissa Forest Act, 1972 are not obliged to release the vehicle from the confiscation proceeding or to pay the sale proceeds of the vehicle after the order of confiscation in favour of Orissa State Financial Corporation when such vehicles were purchased on being financed by the Orissa State Financial Corporation and the loan had not been liquidated by the date of the seizure/confiscation of the vehicle. Concept of first charge or second charge has no applicability when the vehicle is not otherwise disposed of to determine the liabilities of the loanee. On the other hand the vehicle having been found indulged in forest offences was made subject matter of a confiscation proceedings, and therefore, the procedure followed for confiscation of the vehicle and for its sale is punitive in nature and not with a view to give benefit to anybody including the Department which initiated the confiscation proceeding. Apart from that, the claim of the Orissa State Financial Corporation as against its loanee (who had taken the vehicle on hire- purchase agreement) brings the loanee and the sureties within the default clause under the State Financial Corporation Act, 1951 or the heirs and successors of such persons. Procedure is provided in the Act, 1951 and the Rules thereof about the manner in which such loan is to be recovered, and in that context only the vehicle under the hire-purchase agreement is placed as the first charge. If such property is not available for any reason, then the loan is not automatically waived or the loanee and his sureties are not automatically redeemed of the liabilities to repay. The Financial Corporation is concerned with repayment of loan either from the property or persons offered as surety. Thus, a vehicle, which is subject matter of confiscation proceeding under the Act, 1872, being not available to the Orissa State Financial Corporation for adjustment of the unpaid loan, that does not at all bring out an anomalous situation so as to defeat the right of the Orissa State Financial Corporation. Agreement between the Orissa State Financial Corporation and the loanee is a pure and simple contract governed by the provisions of the Contract Act, 1872 read with the provisions in the Act, 1951 and its Rules. On the other hand, a confiscation proceeding under the Act, 1972 is punitive in nature for commission of a forest offence. Thus, by virtue of the provision in Section 56 read with Section 64 (2) of the Act, 1972, the action taken for confiscation of the vehicle cannot be extended to grant protection of the loan advanced by Orissa State Financial Corporation. By doing that it amounts to grant premium to the pick-pockets in as much as, by making payment of the confiscation amount in favour of the Orissa State Financial Corporation the loan burden of the accused of the forest offence is reduced to the extent of the sale proceeds of the vehicle. In other words, on payment of the sale proceeds of the confiscation proceeding to the Orissa State Financial Corporation towards discharge of the loan account of the accused of a forest offence, it would lead to a system to reward him by repayment of his loan. Then it does not become a penalty nor the action become punitive, but it remains as a reward to the accused of forest offence. Such a concept is totally not conceivable from any provision in the Act, 1972 or the Act, 1951. [AIR 2002 Orissa 130 Overruled]. -- STATE FINANCIAL CORPORATIONS ACT, 1951. 
Section 29; Discharge of loan  Orissa Forest Act (14 of 1972), Section 56  Confiscation of vehicle - Held, The Authorities under Section 56 of the Orissa Forest Act, 1972 are not obliged to release the vehicle from the confiscation proceeding or to pay the sale proceeds of the vehicle after the order of confiscation in favour of Orissa State Financial Corporation when such vehicles were purchased on being financed by the Orissa State Financial Corporation and the loan had not been liquidated by the date of the seizure/confiscation of the vehicle. Concept of first charge or second charge has no applicability when the vehicle is not otherwise disposed of to determine the liabilities of the loanee. On the other hand the vehicle having been found indulged in forest offences was made subject matter of a confiscation proceedings, and therefore, the procedure followed for confiscation of the vehicle and for its sale is punitive in nature and not with a view to give benefit to anybody including the Department which initiated the confiscation proceeding. Apart from that, the claim of the Orissa State Financial Corporation as against its loanee (who had taken the vehicle on hire- purchase agreement) brings the loanee and the sureties within the default clause under the State Financial Corporation Act, 1951 or the heirs and successors of such persons. Procedure is provided in the Act, 1951 and the Rules thereof about the manner in which such loan is to be recovered, and in that context only the vehicle under the hire-purchase agreement is placed as the first charge. If such property is not available for any reason, then the loan is not automatically waived or the loanee and his sureties are not automatically redeemed of the liabilities to repay. The Financial Corporation is concerned with repayment of loan either from the property or persons offered as surety. Thus, a vehicle, which is subject matter of confiscation proceeding under the Act, 1872, being not available to the Orissa State Financial Corporation for adjustment of the unpaid loan, that does not at all bring out an anomalous situation so as to defeat the right of the Orissa State Financial Corporation. Agreement between the Orissa State Financial Corporation and the loanee is a pure and simple contract governed by the provisions of the Contract Act, 1872 read with the provisions in the Act, 1951 and its Rules. On the other hand, a confiscation proceeding under the Act, 1972 is punitive in nature for commission of a forest offence. Thus, by virtue of the provision in Section 56 read with Section 64 (2) of the Act, 1972, the action taken for confiscation of the vehicle cannot be extended to grant protection of the loan advanced by Orissa State Financial Corporation. By doing that it amounts to grant premium to the pick-pockets in as much as, by making payment of the confiscation amount in favour of the Orissa State Financial Corporation the loan burden of the accused of the forest offence is reduced to the extent of the sale proceeds of the vehicle. In other words, on payment of the sale proceeds of the confiscation proceeding to the Orissa State Financial Corporation towards discharge of the loan account of the accused of a forest offence, it would lead to a system to reward him by repayment of his loan. Then it does not become a penalty nor the action become punitive, but it remains as a reward to the accused of forest offence. Such a concept is totally not conceivable from any provision in the Act, 1972 or the Act, 1951. [AIR 2002 Orissa 130 Overruled].  -  In that case, the stand of the Revenue was disapproved by the Orissa High Court. 16. Learned Counsel for the petitioner submitted that the photographs taken by the petitioner are not goods which can be sold and is not a marketable commodity like any other goods.',
		'caseanalysis' => null,
		'casesref' => 'Imagic Creative Pvt. Ltd. v. Commissioner of Commercial Taxes and Ors.;',
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		'court' => 'Orissa',
		'court_type' => 'HC',
		'decidedon' => '2008-04-02',
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		'judge' => ' A.K. Ganguly, C.J. and; B.N. Mahapatra, J.',
		'judgement' => '<p>A.K. Ganguly, C.J.</p><p>1. Initially three S.J.Cs. being S.J.C. Nos. 10 of 1997, 8 of 1997 and 9 of 1997 were filed and subsequently renumbered as STREV Nos. 212, 214 and 216 of 2007 respectively. In view of the common questions of facts and law, all the three Revision Applications are heard and disposed of together.</p><p>2. The following questions of law arising out of the order passed by the Orissa Sales Tax Tribunal on 8.12.1993 in Second Appeal Nos. 3345 to 3350 of 1991-92 have been referred to this Hon'ble High Court in terms of the order of this Hon'ble Court dated 24.2.1997. The questions are:</p><p>(i) Whether on the facts and in the circumstances of the case, the Tribunal is right to held that tax is exigible for photographs as execution of works contract ?</p><p>(ii) Whether on the facts and in the circumstances of the case, the conclusion of the Tribunal is perverse due to non-consideration and mis-consideration of facts and law and, therefore, it is liable to be set aside for re-hearing ?</p><p>3. The materials facts out of which those questions arise are that the petitioner carries on the business of processing and developing photography. In the usual course of business, the petitioner takes photographs of persons or of family and then develops the negative by employing his skill and labour and then supplies the photographs to the clients. These photographs which are prepared by the petitioner are not commercial items because they are neither purchased nor sold. However, to develop these photographs employment of skill and labour is essential. It may be mentioned that petitioner does not carry on any sale of photographs of national leaders, God and Goddess.</p><p>4. After the passing of 46th amendment of the Constitution of India and consequent amendments thereto in Orissa Sales Tax Act (OST Act), the Sales Tax Officer, Bhubaneswar-II Circle, Bhubaneswar sent notices to assess the petitioner as an unregistered dealer under Section 12 (5) of the OST Act, inter alia, contending that the petitioner's activities can be called 'works contract'. Pursuant to said notice, the petitioner gave its reply and appeared before the Sales Tax Officer and produced the books of account and documents including Receipts, Purchase Memos, Vouchers, Ledger and thereby denied its liability under the OST Act. The petitioner also submitted objection petitions on various dates i.e. 28.12.1985, 10.1.1986, 20.2.1986 and 29.2.1988 contending, inter alia, that the petitioner has no sales tax liability under OST Act and the notices, which were issued, are without jurisdiction.</p><p>5. Ignoring the said objections of the petitioner, the Sales Tax Officer, Bhubaneswar-II Circle, Bhubaneswar assessed the petitioner as an unregistered dealer, inter alia, holding that the petitioner is liable to pay sales tax as petitioner has been alleged to carry activities of 'works contract'. Therefore, orders of assessment being dated 29.2.1988 for the years 1984-85 (9/84 to 3/85), 1985-86 and 1986- 87 under Section 12(5) of OST Act and under Rule 5 of the Orissa Additional Sales Tax Rules, 1975 were passed and a tax of Rs. 20,765.00 and penalty of Rs. 5,000.00 totalling to Rs. 25,765.00 was imposed on the petitioner. The petitioner then filed the First Appeal before the learned Assistant Commissioner of Sales Tax. The First Appellate Authority by an order dated 27.9.1991 confirmed the levy of tax under the OST Act, but reduced the penalty to Rs. 1250.00. Thereupon, the petitioner filed the Second Appeal before the Orissa Sales Tax Tribunal, Cuttack. The said Tribunal heard the Second Appeal and in course of hearing, the petitioner raised various contentions. Ultimately, the Tribunal upheld the levy of tax but deleted the penalty.</p><p>6. Thereafter the petitioner came up with a reference application under Section 24(1) of the Orissa Sales Tax Act framing certain questions for being referred to the Hon'ble High Court. The said prayer of the petitioner was rejected by the Tribunal. Then the petitioner moved Hon'ble High Court under Section 24(2)(b) of the Orissa Sales Tax Act, 1947 whereupon the High Court directed the Tribunal to state to case and refer the questions under Section 24(3) of the OST Act for a decision of the High Court.</p><p>7. Accordingly, the Tribunal stated the case and referred the aforesaid questions for a decision of the High Court.</p><p>8. Learned Counsel for the petitioner before the High Court submitted that in the transaction in question, there is no contract of sale between the petitioner and the client. It is only a contract of service and the photographs, which the petitioner produced by supplying the same has no commercial value and are not marketable. So, there is no question of a works contract. It is the consistent stand of the petitioner that the present photographs which are produced by the petitioner have no utility or value to any other person than the customer. By developing such photographs, the petitioner only renders service to his customers. The customer pays for the service rendered by the petitioner. It is the contention of the petitioner that his activity is similar to that of consulting firm preparing plan and sketches pursuant to client's specification or professional giving opinion on papers. All those activities are done to serve the client. Therefore, this does not come within the purview of the definition of 'goods', 'sale', 'dealer' or 'works contract'. It is the petitioner's case that he purchased the goods, namely, papers on payment of sales tax. Further levy of tax on the personal service rendered to the client of the petitioner will amount to double taxation. It is also the contention of the petitioner that the paper which is used in the photography are incidental and insignificant.</p><p>9. In support of its contention, learned Counsel for the petitioner has relied on several judgments. First reliance was place on the judgment of the Supreme Court in the case of Sales Tax Officer v. B.C. Kame reported in 39 STC 237(SC). At page 241 of the report, learned Judges of the Supreme Court held that a photographer takes the photograph and develops the negatives and does other photographic work and thereafter supplies the prints to his client. By doing so he cannot be said to enter into a contract for sale of goods. On the other hand, the contract is for use of skill and labour by the photographer to bring about the desired result. Learned Judges held that the job of a photographer is a contract for work and labour and it is not a contract of sale.</p><p>10. Reliance was also placed on a judgment of this High Court in the case of Photo Emporium v. Addl. District Magistrate reported in 77 STC 199 in which this High Court followed the ratio of the judgment of the Supreme Court in the case of B.C. Kame. In that case, the stand of the Revenue was disapproved by the Orissa High Court.</p><p>11. Similar view was taken in 110 STC 145 in the case of Foto Colour Labs Pvt. Ltd. v. Commercial Taxes Officer where the Tribunal held that the transfer of paper in the photograph is purely incidental and payment is only taken to give positive prints and not to get the photo papers. Therefore, the contract in between the petitioner and his client is not a contract of sale, and neither directly or indirectly works contract is involved in the supply of photo papers. Similar view was taken by the West Bengal Taxation Tribunal in the case of Studio Kamalalaya v. Commercial Tax Officer reported in 89 STC 307.</p><p>12. In the case of Bavens v. Onion of India report in 97 STC 161, learned Judges held that when a photographer takes a photograph of his customer, he develops the negative and supplies positive prints in the desired size to the customer. In doing so the photographer uses his own camera and his own film. The negative belongs to the photographer and not to the customer. No basic goods are provided by the customer which are subjected to processing by the photographer so as to make the contract a works contract. There is no accretion to goods or property or the nucleus of a property which belongs to the customer. It is the skill of the photographer which is most important to get the desired result.</p><p>13. Hon'ble Karnataka High Court followed the same principle in the case of Keshoram Surlndranath Photo-mag Pvt. Ltd. v. Assistant Commissioner of Commercial Taxes reported in 121 STC 175. In that judgment, learned Judges of the Karnataka High Court relied on the judgment of the Supreme Court in B.C. Kame's case and came to the conclusion that in the job of the photographer in supplying positive prints to his customer, no works contract is involved and photographs are not marketable or saleable commodity and as such no tax can be levied on it.</p><p>14. Against the said judgment of the Karnataka High Court, the State of Karnataka High Court filed a S.L.P. before the Hon'ble Supreme Court bearing SLP Nos. 6136-6163 of 2000 and the Hon'ble Supreme Court dismissed the SLP on 20th April, 2000.</p><p>15. In the case of Rainbow Colour Lab v. State of M.P. learned Judges of the Hon'ble Supreme Court reiterated its judgment in B.C. Kame's case and came to the following conclusion:</p><p>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.</p><p>Hon'ble Supreme Court in Bharat Sanchar Nigam Ltd. v. Union of India reported in 145 STC 91 again reiterated the principle in B.C. Kame's case and held that the work done by the photographer is only in the nature of a service contract not involving any sale of goods and held that the stand taken by the State cannot be sustained.</p><p>16. Learned Counsel for the petitioner submitted that the photographs taken by the petitioner are not goods which can be sold and is not a marketable commodity like any other goods. When the copies of photographs are made out, they have no utility or value to any other person than the customer. It is already admitted that the papers utilized for photographs are tax paid goods. Therefore, it is contended by the learned Counsel for the petitioner that the work of photography does not come within the purview of works contract as defined in Section 2(jj) of the Orissa Sales Tax Act.</p><p>17. Learned Counsel for the Revenue in this case virtually did not contest the submission made by the learned Counsel for the petitioner and in support of his contention, learned Counsel for the Revenue relied on a decision of the Supreme Court in the case of Imagic Creative Pvt. Ltd. v. Commissioner of Commercial Taxes and Ors. reported in (2008) 10 RC 236. In that judgment, learned Judges held that since the contract in question is a service contract, it is difficult to hold that in a case of this nature, sales tax would be payable on the value of the entire contract irrespective of the element of service provided.</p><p>For the reasons discussed above, we answer the first question in the negative and the second question, in the affirmative. We thus answer both the questions in favour of the assessee and against the Revenue.</p><p>The three revision applications are thus disposed of.</p><p>No costs.</p><p>B.N. Mahapatra, J.</p><p>18. I agree.<p></p><p>',
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	(int) 0 => '<p>A.K. Ganguly, C.J.',
	(int) 1 => '<p>1. Initially three S.J.Cs. being S.J.C. Nos. 10 of 1997, 8 of 1997 and 9 of 1997 were filed and subsequently renumbered as STREV Nos. 212, 214 and 216 of 2007 respectively. In view of the common questions of facts and law, all the three Revision Applications are heard and disposed of together.',
	(int) 2 => '<p>2. The following questions of law arising out of the order passed by the Orissa Sales Tax Tribunal on 8.12.1993 in Second Appeal Nos. 3345 to 3350 of 1991-92 have been referred to this Hon'ble High Court in terms of the order of this Hon'ble Court dated 24.2.1997. The questions are:',
	(int) 3 => '<p>(i) Whether on the facts and in the circumstances of the case, the Tribunal is right to held that tax is exigible for photographs as execution of works contract ?',
	(int) 4 => '<p>(ii) Whether on the facts and in the circumstances of the case, the conclusion of the Tribunal is perverse due to non-consideration and mis-consideration of facts and law and, therefore, it is liable to be set aside for re-hearing ?',
	(int) 5 => '<p>3. The materials facts out of which those questions arise are that the petitioner carries on the business of processing and developing photography. In the usual course of business, the petitioner takes photographs of persons or of family and then develops the negative by employing his skill and labour and then supplies the photographs to the clients. These photographs which are prepared by the petitioner are not commercial items because they are neither purchased nor sold. However, to develop these photographs employment of skill and labour is essential. It may be mentioned that petitioner does not carry on any sale of photographs of national leaders, God and Goddess.',
	(int) 6 => '<p>4. After the passing of 46th amendment of the Constitution of India and consequent amendments thereto in Orissa Sales Tax Act (OST Act), the Sales Tax Officer, Bhubaneswar-II Circle, Bhubaneswar sent notices to assess the petitioner as an unregistered dealer under Section 12 (5) of the OST Act, inter alia, contending that the petitioner's activities can be called 'works contract'. Pursuant to said notice, the petitioner gave its reply and appeared before the Sales Tax Officer and produced the books of account and documents including Receipts, Purchase Memos, Vouchers, Ledger and thereby denied its liability under the OST Act. The petitioner also submitted objection petitions on various dates i.e. 28.12.1985, 10.1.1986, 20.2.1986 and 29.2.1988 contending, inter alia, that the petitioner has no sales tax liability under OST Act and the notices, which were issued, are without jurisdiction.',
	(int) 7 => '<p>5. Ignoring the said objections of the petitioner, the Sales Tax Officer, Bhubaneswar-II Circle, Bhubaneswar assessed the petitioner as an unregistered dealer, inter alia, holding that the petitioner is liable to pay sales tax as petitioner has been alleged to carry activities of 'works contract'. Therefore, orders of assessment being dated 29.2.1988 for the years 1984-85 (9/84 to 3/85), 1985-86 and 1986- 87 under Section 12(5) of OST Act and under Rule 5 of the Orissa Additional Sales Tax Rules, 1975 were passed and a tax of Rs. 20,765.00 and penalty of Rs. 5,000.00 totalling to Rs. 25,765.00 was imposed on the petitioner. The petitioner then filed the First Appeal before the learned Assistant Commissioner of Sales Tax. The First Appellate Authority by an order dated 27.9.1991 confirmed the levy of tax under the OST Act, but reduced the penalty to Rs. 1250.00. Thereupon, the petitioner filed the Second Appeal before the Orissa Sales Tax Tribunal, Cuttack. The said Tribunal heard the Second Appeal and in course of hearing, the petitioner raised various contentions. Ultimately, the Tribunal upheld the levy of tax but deleted the penalty.',
	(int) 8 => '<p>6. Thereafter the petitioner came up with a reference application under Section 24(1) of the Orissa Sales Tax Act framing certain questions for being referred to the Hon'ble High Court. The said prayer of the petitioner was rejected by the Tribunal. Then the petitioner moved Hon'ble High Court under Section 24(2)(b) of the Orissa Sales Tax Act, 1947 whereupon the High Court directed the Tribunal to state to case and refer the questions under Section 24(3) of the OST Act for a decision of the High Court.',
	(int) 9 => '<p>7. Accordingly, the Tribunal stated the case and referred the aforesaid questions for a decision of the High Court.',
	(int) 10 => '<p>8. Learned Counsel for the petitioner before the High Court submitted that in the transaction in question, there is no contract of sale between the petitioner and the client. It is only a contract of service and the photographs, which the petitioner produced by supplying the same has no commercial value and are not marketable. So, there is no question of a works contract. It is the consistent stand of the petitioner that the present photographs which are produced by the petitioner have no utility or value to any other person than the customer. By developing such photographs, the petitioner only renders service to his customers. The customer pays for the service rendered by the petitioner. It is the contention of the petitioner that his activity is similar to that of consulting firm preparing plan and sketches pursuant to client's specification or professional giving opinion on papers. All those activities are done to serve the client. Therefore, this does not come within the purview of the definition of 'goods', 'sale', 'dealer' or 'works contract'. It is the petitioner's case that he purchased the goods, namely, papers on payment of sales tax. Further levy of tax on the personal service rendered to the client of the petitioner will amount to double taxation. It is also the contention of the petitioner that the paper which is used in the photography are incidental and insignificant.',
	(int) 11 => '<p>9. In support of its contention, learned Counsel for the petitioner has relied on several judgments. First reliance was place on the judgment of the Supreme Court in the case of Sales Tax Officer v. B.C. Kame reported in 39 STC 237(SC). At page 241 of the report, learned Judges of the Supreme Court held that a photographer takes the photograph and develops the negatives and does other photographic work and thereafter supplies the prints to his client. By doing so he cannot be said to enter into a contract for sale of goods. On the other hand, the contract is for use of skill and labour by the photographer to bring about the desired result. Learned Judges held that the job of a photographer is a contract for work and labour and it is not a contract of sale.',
	(int) 12 => '<p>10. Reliance was also placed on a judgment of this High Court in the case of Photo Emporium v. Addl. District Magistrate reported in 77 STC 199 in which this High Court followed the ratio of the judgment of the Supreme Court in the case of B.C. Kame. In that case, the stand of the Revenue was disapproved by the Orissa High Court.',
	(int) 13 => '<p>11. Similar view was taken in 110 STC 145 in the case of Foto Colour Labs Pvt. Ltd. v. Commercial Taxes Officer where the Tribunal held that the transfer of paper in the photograph is purely incidental and payment is only taken to give positive prints and not to get the photo papers. Therefore, the contract in between the petitioner and his client is not a contract of sale, and neither directly or indirectly works contract is involved in the supply of photo papers. Similar view was taken by the West Bengal Taxation Tribunal in the case of Studio Kamalalaya v. Commercial Tax Officer reported in 89 STC 307.',
	(int) 14 => '<p>12. In the case of Bavens v. Onion of India report in 97 STC 161, learned Judges held that when a photographer takes a photograph of his customer, he develops the negative and supplies positive prints in the desired size to the customer. In doing so the photographer uses his own camera and his own film. The negative belongs to the photographer and not to the customer. No basic goods are provided by the customer which are subjected to processing by the photographer so as to make the contract a works contract. There is no accretion to goods or property or the nucleus of a property which belongs to the customer. It is the skill of the photographer which is most important to get the desired result.',
	(int) 15 => '<p>13. Hon'ble Karnataka High Court followed the same principle in the case of Keshoram Surlndranath Photo-mag Pvt. Ltd. v. Assistant Commissioner of Commercial Taxes reported in 121 STC 175. In that judgment, learned Judges of the Karnataka High Court relied on the judgment of the Supreme Court in B.C. Kame's case and came to the conclusion that in the job of the photographer in supplying positive prints to his customer, no works contract is involved and photographs are not marketable or saleable commodity and as such no tax can be levied on it.',
	(int) 16 => '<p>14. Against the said judgment of the Karnataka High Court, the State of Karnataka High Court filed a S.L.P. before the Hon'ble Supreme Court bearing SLP Nos. 6136-6163 of 2000 and the Hon'ble Supreme Court dismissed the SLP on 20th April, 2000.',
	(int) 17 => '<p>15. In the case of Rainbow Colour Lab v. State of M.P. learned Judges of the Hon'ble Supreme Court reiterated its judgment in B.C. Kame's case and came to the following conclusion:',
	(int) 18 => '<p>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.',
	(int) 19 => '<p>Hon'ble Supreme Court in Bharat Sanchar Nigam Ltd. v. Union of India reported in 145 STC 91 again reiterated the principle in B.C. Kame's case and held that the work done by the photographer is only in the nature of a service contract not involving any sale of goods and held that the stand taken by the State cannot be sustained.',
	(int) 20 => '<p>16. Learned Counsel for the petitioner submitted that the photographs taken by the petitioner are not goods which can be sold and is not a marketable commodity like any other goods. When the copies of photographs are made out, they have no utility or value to any other person than the customer. It is already admitted that the papers utilized for photographs are tax paid goods. Therefore, it is contended by the learned Counsel for the petitioner that the work of photography does not come within the purview of works contract as defined in Section 2(jj) of the Orissa Sales Tax Act.',
	(int) 21 => '<p>17. Learned Counsel for the Revenue in this case virtually did not contest the submission made by the learned Counsel for the petitioner and in support of his contention, learned Counsel for the Revenue relied on a decision of the Supreme Court in the case of Imagic Creative Pvt. Ltd. v. Commissioner of Commercial Taxes and Ors. reported in (2008) 10 RC 236. In that judgment, learned Judges held that since the contract in question is a service contract, it is difficult to hold that in a case of this nature, sales tax would be payable on the value of the entire contract irrespective of the element of service provided.',
	(int) 22 => '<p>For the reasons discussed above, we answer the first question in the negative and the second question, in the affirmative. We thus answer both the questions in favour of the assessee and against the Revenue.',
	(int) 23 => '<p>The three revision applications are thus disposed of.',
	(int) 24 => '<p>No costs.',
	(int) 25 => '<p>B.N. Mahapatra, J.',
	(int) 26 => '<p>18. I agree.<p>',
	(int) 27 => '<p>'
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15. In the case of Rainbow Colour Lab v. State of M.P. learned Judges of the Hon'ble Supreme Court reiterated its judgment in B.C. Kame's case and came to the following conclusion:

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	'title_for_layout' => 'Studio Sujata Vs Commissioner of Sales Tax - Citation 531271 - Court Judgment | ',
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		'Judgement' => array(
			'id' => '531271',
			'acts' => '',
			'appealno' => '',
			'appellant' => 'Studio Sujata',
			'authreffered' => '',
			'casename' => 'Studio Sujata Vs. Commissioner of Sales Tax',
			'casenote' => 'Sales Tax - Assessment - Contract of Sale - Section 12 (5) of Orissa Sales Tax 1947 - Petitioner carries on business of processing and developing photography - Revenue assessed petitioner under Section 12(5) of Act on ground that activities of petitioner can be called works contract - Petitioner approached to Assistant of Sales Tax on ground that there is no contract of sale between the petitioner and the client, it is only service - Dismissed and affirmed by Tribunal - Hence present petition - Whether Tribunal is right to held that tax is exigible for photographs as execution of works contract or not? - Held, as per precedent laid down by Supreme Court in case of Sales Tax Officer v. B.C. Kame that photographer takes photograph and develops negatives and does other photographic work and thereafter supplies prints to his client - By doing so he cannot be said to enter into contract for sale of goods - Therefore, job of photographer is contract for work and labour and it is not contract of sale - Revenue committed mistake in assessing petitioner under Section 12(5) of Act on basis of contract of sale - Petition disposed of accordingly  - STATE FINANCIAL CORPORATIONS ACT, 1951 [63/1951]. Section 29; [P.K. Tripathy, A.K. Parichha & N.Prusty, JJ] Discharge of loan  Orissa Forest Act (14 of 1972), Section 56  Confiscation of vehicle - Held, The Authorities under Section 56 of the Orissa Forest Act, 1972 are not obliged to release the vehicle from the confiscation proceeding or to pay the sale proceeds of the vehicle after the order of confiscation in favour of Orissa State Financial Corporation when such vehicles were purchased on being financed by the Orissa State Financial Corporation and the loan had not been liquidated by the date of the seizure/confiscation of the vehicle. Concept of first charge or second charge has no applicability when the vehicle is not otherwise disposed of to determine the liabilities of the loanee. On the other hand the vehicle having been found indulged in forest offences was made subject matter of a confiscation proceedings, and therefore, the procedure followed for confiscation of the vehicle and for its sale is punitive in nature and not with a view to give benefit to anybody including the Department which initiated the confiscation proceeding. Apart from that, the claim of the Orissa State Financial Corporation as against its loanee (who had taken the vehicle on hire- purchase agreement) brings the loanee and the sureties within the default clause under the State Financial Corporation Act, 1951 or the heirs and successors of such persons. Procedure is provided in the Act, 1951 and the Rules thereof about the manner in which such loan is to be recovered, and in that context only the vehicle under the hire-purchase agreement is placed as the first charge. If such property is not available for any reason, then the loan is not automatically waived or the loanee and his sureties are not automatically redeemed of the liabilities to repay. The Financial Corporation is concerned with repayment of loan either from the property or persons offered as surety. Thus, a vehicle, which is subject matter of confiscation proceeding under the Act, 1872, being not available to the Orissa State Financial Corporation for adjustment of the unpaid loan, that does not at all bring out an anomalous situation so as to defeat the right of the Orissa State Financial Corporation. Agreement between the Orissa State Financial Corporation and the loanee is a pure and simple contract governed by the provisions of the Contract Act, 1872 read with the provisions in the Act, 1951 and its Rules. On the other hand, a confiscation proceeding under the Act, 1972 is punitive in nature for commission of a forest offence. Thus, by virtue of the provision in Section 56 read with Section 64 (2) of the Act, 1972, the action taken for confiscation of the vehicle cannot be extended to grant protection of the loan advanced by Orissa State Financial Corporation. By doing that it amounts to grant premium to the pick-pockets in as much as, by making payment of the confiscation amount in favour of the Orissa State Financial Corporation the loan burden of the accused of the forest offence is reduced to the extent of the sale proceeds of the vehicle. In other words, on payment of the sale proceeds of the confiscation proceeding to the Orissa State Financial Corporation towards discharge of the loan account of the accused of a forest offence, it would lead to a system to reward him by repayment of his loan. Then it does not become a penalty nor the action become punitive, but it remains as a reward to the accused of forest offence. Such a concept is totally not conceivable from any provision in the Act, 1972 or the Act, 1951. [AIR 2002 Orissa 130 Overruled]. -- STATE FINANCIAL CORPORATIONS ACT, 1951. 
Section 29; Discharge of loan  Orissa Forest Act (14 of 1972), Section 56  Confiscation of vehicle - Held, The Authorities under Section 56 of the Orissa Forest Act, 1972 are not obliged to release the vehicle from the confiscation proceeding or to pay the sale proceeds of the vehicle after the order of confiscation in favour of Orissa State Financial Corporation when such vehicles were purchased on being financed by the Orissa State Financial Corporation and the loan had not been liquidated by the date of the seizure/confiscation of the vehicle. Concept of first charge or second charge has no applicability when the vehicle is not otherwise disposed of to determine the liabilities of the loanee. On the other hand the vehicle having been found indulged in forest offences was made subject matter of a confiscation proceedings, and therefore, the procedure followed for confiscation of the vehicle and for its sale is punitive in nature and not with a view to give benefit to anybody including the Department which initiated the confiscation proceeding. Apart from that, the claim of the Orissa State Financial Corporation as against its loanee (who had taken the vehicle on hire- purchase agreement) brings the loanee and the sureties within the default clause under the State Financial Corporation Act, 1951 or the heirs and successors of such persons. Procedure is provided in the Act, 1951 and the Rules thereof about the manner in which such loan is to be recovered, and in that context only the vehicle under the hire-purchase agreement is placed as the first charge. If such property is not available for any reason, then the loan is not automatically waived or the loanee and his sureties are not automatically redeemed of the liabilities to repay. The Financial Corporation is concerned with repayment of loan either from the property or persons offered as surety. Thus, a vehicle, which is subject matter of confiscation proceeding under the Act, 1872, being not available to the Orissa State Financial Corporation for adjustment of the unpaid loan, that does not at all bring out an anomalous situation so as to defeat the right of the Orissa State Financial Corporation. Agreement between the Orissa State Financial Corporation and the loanee is a pure and simple contract governed by the provisions of the Contract Act, 1872 read with the provisions in the Act, 1951 and its Rules. On the other hand, a confiscation proceeding under the Act, 1972 is punitive in nature for commission of a forest offence. Thus, by virtue of the provision in Section 56 read with Section 64 (2) of the Act, 1972, the action taken for confiscation of the vehicle cannot be extended to grant protection of the loan advanced by Orissa State Financial Corporation. By doing that it amounts to grant premium to the pick-pockets in as much as, by making payment of the confiscation amount in favour of the Orissa State Financial Corporation the loan burden of the accused of the forest offence is reduced to the extent of the sale proceeds of the vehicle. In other words, on payment of the sale proceeds of the confiscation proceeding to the Orissa State Financial Corporation towards discharge of the loan account of the accused of a forest offence, it would lead to a system to reward him by repayment of his loan. Then it does not become a penalty nor the action become punitive, but it remains as a reward to the accused of forest offence. Such a concept is totally not conceivable from any provision in the Act, 1972 or the Act, 1951. [AIR 2002 Orissa 130 Overruled].  -  In that case, the stand of the Revenue was disapproved by the Orissa High Court. 16. Learned Counsel for the petitioner submitted that the photographs taken by the petitioner are not goods which can be sold and is not a marketable commodity like any other goods.',
			'caseanalysis' => null,
			'casesref' => 'Imagic Creative Pvt. Ltd. v. Commissioner of Commercial Taxes and Ors.;',
			'citingcases' => '',
			'counselplain' => '',
			'counseldef' => '',
			'court' => 'Orissa',
			'court_type' => 'HC',
			'decidedon' => '2008-04-02',
			'deposition' => '',
			'favorof' => null,
			'findings' => null,
			'judge' => ' A.K. Ganguly, C.J. and; B.N. Mahapatra, J.',
			'judgement' => '<p style="text-align: justify;">A.K. Ganguly, C.J.</p><p style="text-align: justify;">1. Initially three S.J.Cs. being S.J.C. Nos. 10 of 1997, 8 of 1997 and 9 of 1997 were filed and subsequently renumbered as STREV Nos. 212, 214 and 216 of 2007 respectively. In view of the common questions of facts and law, all the three Revision Applications are heard and disposed of together.</p><p style="text-align: justify;">2. The following questions of law arising out of the order passed by the Orissa Sales Tax Tribunal on 8.12.1993 in Second Appeal Nos. 3345 to 3350 of 1991-92 have been referred to this Hon'ble High Court in terms of the order of this Hon'ble Court dated 24.2.1997. The questions are:</p><p style="text-align: justify;">(i) Whether on the facts and in the circumstances of the case, the Tribunal is right to held that tax is exigible for photographs as execution of works contract ?</p><p style="text-align: justify;">(ii) Whether on the facts and in the circumstances of the case, the conclusion of the Tribunal is perverse due to non-consideration and mis-consideration of facts and law and, therefore, it is liable to be set aside for re-hearing ?</p><p style="text-align: justify;">3. The materials facts out of which those questions arise are that the petitioner carries on the business of processing and developing photography. In the usual course of business, the petitioner takes photographs of persons or of family and then develops the negative by employing his skill and labour and then supplies the photographs to the clients. These photographs which are prepared by the petitioner are not commercial items because they are neither purchased nor sold. However, to develop these photographs employment of skill and labour is essential. It may be mentioned that petitioner does not carry on any sale of photographs of national leaders, God and Goddess.</p><p style="text-align: justify;">4. After the passing of 46th amendment of the Constitution of India and consequent amendments thereto in Orissa Sales Tax Act (OST Act), the Sales Tax Officer, Bhubaneswar-II Circle, Bhubaneswar sent notices to assess the petitioner as an unregistered dealer under Section 12 (5) of the OST Act, inter alia, contending that the petitioner's activities can be called 'works contract'. Pursuant to said notice, the petitioner gave its reply and appeared before the Sales Tax Officer and produced the books of account and documents including Receipts, Purchase Memos, Vouchers, Ledger and thereby denied its liability under the OST Act. The petitioner also submitted objection petitions on various dates i.e. 28.12.1985, 10.1.1986, 20.2.1986 and 29.2.1988 contending, inter alia, that the petitioner has no sales tax liability under OST Act and the notices, which were issued, are without jurisdiction.</p><p style="text-align: justify;">5. Ignoring the said objections of the petitioner, the Sales Tax Officer, Bhubaneswar-II Circle, Bhubaneswar assessed the petitioner as an unregistered dealer, inter alia, holding that the petitioner is liable to pay sales tax as petitioner has been alleged to carry activities of 'works contract'. Therefore, orders of assessment being dated 29.2.1988 for the years 1984-85 (9/84 to 3/85), 1985-86 and 1986- 87 under Section 12(5) of OST Act and under Rule 5 of the Orissa Additional Sales Tax Rules, 1975 were passed and a tax of Rs. 20,765.00 and penalty of Rs. 5,000.00 totalling to Rs. 25,765.00 was imposed on the petitioner. The petitioner then filed the First Appeal before the learned Assistant Commissioner of Sales Tax. The First Appellate Authority by an order dated 27.9.1991 confirmed the levy of tax under the OST Act, but reduced the penalty to Rs. 1250.00. Thereupon, the petitioner filed the Second Appeal before the Orissa Sales Tax Tribunal, Cuttack. The said Tribunal heard the Second Appeal and in course of hearing, the petitioner raised various contentions. Ultimately, the Tribunal upheld the levy of tax but deleted the penalty.</p><p style="text-align: justify;">6. Thereafter the petitioner came up with a reference application under Section 24(1) of the Orissa Sales Tax Act framing certain questions for being referred to the Hon'ble High Court. The said prayer of the petitioner was rejected by the Tribunal. Then the petitioner moved Hon'ble High Court under Section 24(2)(b) of the Orissa Sales Tax Act, 1947 whereupon the High Court directed the Tribunal to state to case and refer the questions under Section 24(3) of the OST Act for a decision of the High Court.</p><p style="text-align: justify;">7. Accordingly, the Tribunal stated the case and referred the aforesaid questions for a decision of the High Court.</p><p style="text-align: justify;">8. Learned Counsel for the petitioner before the High Court submitted that in the transaction in question, there is no contract of sale between the petitioner and the client. It is only a contract of service and the photographs, which the petitioner produced by supplying the same has no commercial value and are not marketable. So, there is no question of a works contract. It is the consistent stand of the petitioner that the present photographs which are produced by the petitioner have no utility or value to any other person than the customer. By developing such photographs, the petitioner only renders service to his customers. The customer pays for the service rendered by the petitioner. It is the contention of the petitioner that his activity is similar to that of consulting firm preparing plan and sketches pursuant to client's specification or professional giving opinion on papers. All those activities are done to serve the client. Therefore, this does not come within the purview of the definition of 'goods', 'sale', 'dealer' or 'works contract'. It is the petitioner's case that he purchased the goods, namely, papers on payment of sales tax. Further levy of tax on the personal service rendered to the client of the petitioner will amount to double taxation. It is also the contention of the petitioner that the paper which is used in the photography are incidental and insignificant.</p><p style="text-align: justify;">9. In support of its contention, learned Counsel for the petitioner has relied on several judgments. First reliance was place on the judgment of the Supreme Court in the case of Sales Tax Officer v. B.C. Kame reported in 39 STC 237(SC). At page 241 of the report, learned Judges of the Supreme Court held that a photographer takes the photograph and develops the negatives and does other photographic work and thereafter supplies the prints to his client. By doing so he cannot be said to enter into a contract for sale of goods. On the other hand, the contract is for use of skill and labour by the photographer to bring about the desired result. Learned Judges held that the job of a photographer is a contract for work and labour and it is not a contract of sale.</p><p style="text-align: justify;">10. Reliance was also placed on a judgment of this High Court in the case of Photo Emporium v. Addl. District Magistrate reported in 77 STC 199 in which this High Court followed the ratio of the judgment of the Supreme Court in the case of B.C. Kame. In that case, the stand of the Revenue was disapproved by the Orissa High Court.</p><p style="text-align: justify;">11. Similar view was taken in 110 STC 145 in the case of Foto Colour Labs Pvt. Ltd. v. Commercial Taxes Officer where the Tribunal held that the transfer of paper in the photograph is purely incidental and payment is only taken to give positive prints and not to get the photo papers. Therefore, the contract in between the petitioner and his client is not a contract of sale, and neither directly or indirectly works contract is involved in the supply of photo papers. Similar view was taken by the West Bengal Taxation Tribunal in the case of Studio Kamalalaya v. Commercial Tax Officer reported in 89 STC 307.</p><p style="text-align: justify;">12. In the case of Bavens v. Onion of India report in 97 STC 161, learned Judges held that when a photographer takes a photograph of his customer, he develops the negative and supplies positive prints in the desired size to the customer. In doing so the photographer uses his own camera and his own film. The negative belongs to the photographer and not to the customer. No basic goods are provided by the customer which are subjected to processing by the photographer so as to make the contract a works contract. There is no accretion to goods or property or the nucleus of a property which belongs to the customer. It is the skill of the photographer which is most important to get the desired result.</p><p style="text-align: justify;">13. Hon'ble Karnataka High Court followed the same principle in the case of Keshoram Surlndranath Photo-mag Pvt. Ltd. v. Assistant Commissioner of Commercial Taxes reported in 121 STC 175. In that judgment, learned Judges of the Karnataka High Court relied on the judgment of the Supreme Court in B.C. Kame's case and came to the conclusion that in the job of the photographer in supplying positive prints to his customer, no works contract is involved and photographs are not marketable or saleable commodity and as such no tax can be levied on it.</p><p style="text-align: justify;">14. Against the said judgment of the Karnataka High Court, the State of Karnataka High Court filed a S.L.P. before the Hon'ble Supreme Court bearing SLP Nos. 6136-6163 of 2000 and the Hon'ble Supreme Court dismissed the SLP on 20th April, 2000.</p><p style="text-align: justify;">15. In the case of Rainbow Colour Lab v. State of M.P. learned Judges of the Hon'ble Supreme Court reiterated its judgment in B.C. Kame's case and came to the following conclusion:</p><p style="text-align: justify;">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.</p><p style="text-align: justify;">Hon'ble Supreme Court in Bharat Sanchar Nigam Ltd. v. Union of India reported in 145 STC 91 again reiterated the principle in B.C. Kame's case and held that the work done by the photographer is only in the nature of a service contract not involving any sale of goods and held that the stand taken by the State cannot be sustained.</p><p style="text-align: justify;">16. Learned Counsel for the petitioner submitted that the photographs taken by the petitioner are not goods which can be sold and is not a marketable commodity like any other goods. When the copies of photographs are made out, they have no utility or value to any other person than the customer. It is already admitted that the papers utilized for photographs are tax paid goods. Therefore, it is contended by the learned Counsel for the petitioner that the work of photography does not come within the purview of works contract as defined in Section 2(jj) of the Orissa Sales Tax Act.</p><p style="text-align: justify;">17. Learned Counsel for the Revenue in this case virtually did not contest the submission made by the learned Counsel for the petitioner and in support of his contention, learned Counsel for the Revenue relied on a decision of the Supreme Court in the case of Imagic Creative Pvt. Ltd. v. Commissioner of Commercial Taxes and Ors. reported in (2008) 10 RC 236. In that judgment, learned Judges held that since the contract in question is a service contract, it is difficult to hold that in a case of this nature, sales tax would be payable on the value of the entire contract irrespective of the element of service provided.</p><p style="text-align: justify;">For the reasons discussed above, we answer the first question in the negative and the second question, in the affirmative. We thus answer both the questions in favour of the assessee and against the Revenue.</p><p style="text-align: justify;">The three revision applications are thus disposed of.</p><p style="text-align: justify;">No costs.</p><p style="text-align: justify;">B.N. Mahapatra, J.</p><p style="text-align: justify;">18. I agree.<p style="text-align: justify;"></p><p style="text-align: justify;">',
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			'pubs' => '106(2008)CLT317; 2008(I)OLR953; (2008)17VST289(Orissa)',
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			'respondent' => 'Commissioner of Sales Tax',
			'sub' => 'Sales Tax/VAT',
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		'casename' => 'Studio Sujata Vs. Commissioner of Sales Tax',
		'casenote' => 'Sales Tax - Assessment - Contract of Sale - Section 12 (5) of Orissa Sales Tax 1947 - Petitioner carries on business of processing and developing photography - Revenue assessed petitioner under Section 12(5) of Act on ground that activities of petitioner can be called works contract - Petitioner approached to Assistant of Sales Tax on ground that there is no contract of sale between the petitioner and the client, it is only service - Dismissed and affirmed by Tribunal - Hence present petition - Whether Tribunal is right to held that tax is exigible for photographs as execution of works contract or not? - Held, as per precedent laid down by Supreme Court in case of Sales Tax Officer v. B.C. Kame that photographer takes photograph and develops negatives and does other photographic work and thereafter supplies prints to his client - By doing so he cannot be said to enter into contract for sale of goods - Therefore, job of photographer is contract for work and labour and it is not contract of sale - Revenue committed mistake in assessing petitioner under Section 12(5) of Act on basis of contract of sale - Petition disposed of accordingly  - STATE FINANCIAL CORPORATIONS ACT, 1951 [63/1951]. Section 29; [P.K. Tripathy, A.K. Parichha & N.Prusty, JJ] Discharge of loan  Orissa Forest Act (14 of 1972), Section 56  Confiscation of vehicle - Held, The Authorities under Section 56 of the Orissa Forest Act, 1972 are not obliged to release the vehicle from the confiscation proceeding or to pay the sale proceeds of the vehicle after the order of confiscation in favour of Orissa State Financial Corporation when such vehicles were purchased on being financed by the Orissa State Financial Corporation and the loan had not been liquidated by the date of the seizure/confiscation of the vehicle. Concept of first charge or second charge has no applicability when the vehicle is not otherwise disposed of to determine the liabilities of the loanee. On the other hand the vehicle having been found indulged in forest offences was made subject matter of a confiscation proceedings, and therefore, the procedure followed for confiscation of the vehicle and for its sale is punitive in nature and not with a view to give benefit to anybody including the Department which initiated the confiscation proceeding. Apart from that, the claim of the Orissa State Financial Corporation as against its loanee (who had taken the vehicle on hire- purchase agreement) brings the loanee and the sureties within the default clause under the State Financial Corporation Act, 1951 or the heirs and successors of such persons. Procedure is provided in the Act, 1951 and the Rules thereof about the manner in which such loan is to be recovered, and in that context only the vehicle under the hire-purchase agreement is placed as the first charge. If such property is not available for any reason, then the loan is not automatically waived or the loanee and his sureties are not automatically redeemed of the liabilities to repay. The Financial Corporation is concerned with repayment of loan either from the property or persons offered as surety. Thus, a vehicle, which is subject matter of confiscation proceeding under the Act, 1872, being not available to the Orissa State Financial Corporation for adjustment of the unpaid loan, that does not at all bring out an anomalous situation so as to defeat the right of the Orissa State Financial Corporation. Agreement between the Orissa State Financial Corporation and the loanee is a pure and simple contract governed by the provisions of the Contract Act, 1872 read with the provisions in the Act, 1951 and its Rules. On the other hand, a confiscation proceeding under the Act, 1972 is punitive in nature for commission of a forest offence. Thus, by virtue of the provision in Section 56 read with Section 64 (2) of the Act, 1972, the action taken for confiscation of the vehicle cannot be extended to grant protection of the loan advanced by Orissa State Financial Corporation. By doing that it amounts to grant premium to the pick-pockets in as much as, by making payment of the confiscation amount in favour of the Orissa State Financial Corporation the loan burden of the accused of the forest offence is reduced to the extent of the sale proceeds of the vehicle. In other words, on payment of the sale proceeds of the confiscation proceeding to the Orissa State Financial Corporation towards discharge of the loan account of the accused of a forest offence, it would lead to a system to reward him by repayment of his loan. Then it does not become a penalty nor the action become punitive, but it remains as a reward to the accused of forest offence. Such a concept is totally not conceivable from any provision in the Act, 1972 or the Act, 1951. [AIR 2002 Orissa 130 Overruled]. -- STATE FINANCIAL CORPORATIONS ACT, 1951. 
Section 29; Discharge of loan  Orissa Forest Act (14 of 1972), Section 56  Confiscation of vehicle - Held, The Authorities under Section 56 of the Orissa Forest Act, 1972 are not obliged to release the vehicle from the confiscation proceeding or to pay the sale proceeds of the vehicle after the order of confiscation in favour of Orissa State Financial Corporation when such vehicles were purchased on being financed by the Orissa State Financial Corporation and the loan had not been liquidated by the date of the seizure/confiscation of the vehicle. Concept of first charge or second charge has no applicability when the vehicle is not otherwise disposed of to determine the liabilities of the loanee. On the other hand the vehicle having been found indulged in forest offences was made subject matter of a confiscation proceedings, and therefore, the procedure followed for confiscation of the vehicle and for its sale is punitive in nature and not with a view to give benefit to anybody including the Department which initiated the confiscation proceeding. Apart from that, the claim of the Orissa State Financial Corporation as against its loanee (who had taken the vehicle on hire- purchase agreement) brings the loanee and the sureties within the default clause under the State Financial Corporation Act, 1951 or the heirs and successors of such persons. Procedure is provided in the Act, 1951 and the Rules thereof about the manner in which such loan is to be recovered, and in that context only the vehicle under the hire-purchase agreement is placed as the first charge. If such property is not available for any reason, then the loan is not automatically waived or the loanee and his sureties are not automatically redeemed of the liabilities to repay. The Financial Corporation is concerned with repayment of loan either from the property or persons offered as surety. Thus, a vehicle, which is subject matter of confiscation proceeding under the Act, 1872, being not available to the Orissa State Financial Corporation for adjustment of the unpaid loan, that does not at all bring out an anomalous situation so as to defeat the right of the Orissa State Financial Corporation. Agreement between the Orissa State Financial Corporation and the loanee is a pure and simple contract governed by the provisions of the Contract Act, 1872 read with the provisions in the Act, 1951 and its Rules. On the other hand, a confiscation proceeding under the Act, 1972 is punitive in nature for commission of a forest offence. Thus, by virtue of the provision in Section 56 read with Section 64 (2) of the Act, 1972, the action taken for confiscation of the vehicle cannot be extended to grant protection of the loan advanced by Orissa State Financial Corporation. By doing that it amounts to grant premium to the pick-pockets in as much as, by making payment of the confiscation amount in favour of the Orissa State Financial Corporation the loan burden of the accused of the forest offence is reduced to the extent of the sale proceeds of the vehicle. In other words, on payment of the sale proceeds of the confiscation proceeding to the Orissa State Financial Corporation towards discharge of the loan account of the accused of a forest offence, it would lead to a system to reward him by repayment of his loan. Then it does not become a penalty nor the action become punitive, but it remains as a reward to the accused of forest offence. Such a concept is totally not conceivable from any provision in the Act, 1972 or the Act, 1951. [AIR 2002 Orissa 130 Overruled].  -  In that case, the stand of the Revenue was disapproved by the Orissa High Court. 16. Learned Counsel for the petitioner submitted that the photographs taken by the petitioner are not goods which can be sold and is not a marketable commodity like any other goods.',
		'caseanalysis' => null,
		'casesref' => 'Imagic Creative Pvt. Ltd. v. Commissioner of Commercial Taxes and Ors.;',
		'citingcases' => '',
		'counselplain' => '',
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		'court' => 'Orissa',
		'court_type' => 'HC',
		'decidedon' => '2008-04-02',
		'deposition' => '',
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		'judge' => ' A.K. Ganguly, C.J. and; B.N. Mahapatra, J.',
		'judgement' => '<p>A.K. Ganguly, C.J.</p><p>1. Initially three S.J.Cs. being S.J.C. Nos. 10 of 1997, 8 of 1997 and 9 of 1997 were filed and subsequently renumbered as STREV Nos. 212, 214 and 216 of 2007 respectively. In view of the common questions of facts and law, all the three Revision Applications are heard and disposed of together.</p><p>2. The following questions of law arising out of the order passed by the Orissa Sales Tax Tribunal on 8.12.1993 in Second Appeal Nos. 3345 to 3350 of 1991-92 have been referred to this Hon'ble High Court in terms of the order of this Hon'ble Court dated 24.2.1997. The questions are:</p><p>(i) Whether on the facts and in the circumstances of the case, the Tribunal is right to held that tax is exigible for photographs as execution of works contract ?</p><p>(ii) Whether on the facts and in the circumstances of the case, the conclusion of the Tribunal is perverse due to non-consideration and mis-consideration of facts and law and, therefore, it is liable to be set aside for re-hearing ?</p><p>3. The materials facts out of which those questions arise are that the petitioner carries on the business of processing and developing photography. In the usual course of business, the petitioner takes photographs of persons or of family and then develops the negative by employing his skill and labour and then supplies the photographs to the clients. These photographs which are prepared by the petitioner are not commercial items because they are neither purchased nor sold. However, to develop these photographs employment of skill and labour is essential. It may be mentioned that petitioner does not carry on any sale of photographs of national leaders, God and Goddess.</p><p>4. After the passing of 46th amendment of the Constitution of India and consequent amendments thereto in Orissa Sales Tax Act (OST Act), the Sales Tax Officer, Bhubaneswar-II Circle, Bhubaneswar sent notices to assess the petitioner as an unregistered dealer under Section 12 (5) of the OST Act, inter alia, contending that the petitioner's activities can be called 'works contract'. Pursuant to said notice, the petitioner gave its reply and appeared before the Sales Tax Officer and produced the books of account and documents including Receipts, Purchase Memos, Vouchers, Ledger and thereby denied its liability under the OST Act. The petitioner also submitted objection petitions on various dates i.e. 28.12.1985, 10.1.1986, 20.2.1986 and 29.2.1988 contending, inter alia, that the petitioner has no sales tax liability under OST Act and the notices, which were issued, are without jurisdiction.</p><p>5. Ignoring the said objections of the petitioner, the Sales Tax Officer, Bhubaneswar-II Circle, Bhubaneswar assessed the petitioner as an unregistered dealer, inter alia, holding that the petitioner is liable to pay sales tax as petitioner has been alleged to carry activities of 'works contract'. Therefore, orders of assessment being dated 29.2.1988 for the years 1984-85 (9/84 to 3/85), 1985-86 and 1986- 87 under Section 12(5) of OST Act and under Rule 5 of the Orissa Additional Sales Tax Rules, 1975 were passed and a tax of Rs. 20,765.00 and penalty of Rs. 5,000.00 totalling to Rs. 25,765.00 was imposed on the petitioner. The petitioner then filed the First Appeal before the learned Assistant Commissioner of Sales Tax. The First Appellate Authority by an order dated 27.9.1991 confirmed the levy of tax under the OST Act, but reduced the penalty to Rs. 1250.00. Thereupon, the petitioner filed the Second Appeal before the Orissa Sales Tax Tribunal, Cuttack. The said Tribunal heard the Second Appeal and in course of hearing, the petitioner raised various contentions. Ultimately, the Tribunal upheld the levy of tax but deleted the penalty.</p><p>6. Thereafter the petitioner came up with a reference application under Section 24(1) of the Orissa Sales Tax Act framing certain questions for being referred to the Hon'ble High Court. The said prayer of the petitioner was rejected by the Tribunal. Then the petitioner moved Hon'ble High Court under Section 24(2)(b) of the Orissa Sales Tax Act, 1947 whereupon the High Court directed the Tribunal to state to case and refer the questions under Section 24(3) of the OST Act for a decision of the High Court.</p><p>7. Accordingly, the Tribunal stated the case and referred the aforesaid questions for a decision of the High Court.</p><p>8. Learned Counsel for the petitioner before the High Court submitted that in the transaction in question, there is no contract of sale between the petitioner and the client. It is only a contract of service and the photographs, which the petitioner produced by supplying the same has no commercial value and are not marketable. So, there is no question of a works contract. It is the consistent stand of the petitioner that the present photographs which are produced by the petitioner have no utility or value to any other person than the customer. By developing such photographs, the petitioner only renders service to his customers. The customer pays for the service rendered by the petitioner. It is the contention of the petitioner that his activity is similar to that of consulting firm preparing plan and sketches pursuant to client's specification or professional giving opinion on papers. All those activities are done to serve the client. Therefore, this does not come within the purview of the definition of 'goods', 'sale', 'dealer' or 'works contract'. It is the petitioner's case that he purchased the goods, namely, papers on payment of sales tax. Further levy of tax on the personal service rendered to the client of the petitioner will amount to double taxation. It is also the contention of the petitioner that the paper which is used in the photography are incidental and insignificant.</p><p>9. In support of its contention, learned Counsel for the petitioner has relied on several judgments. First reliance was place on the judgment of the Supreme Court in the case of Sales Tax Officer v. B.C. Kame reported in 39 STC 237(SC). At page 241 of the report, learned Judges of the Supreme Court held that a photographer takes the photograph and develops the negatives and does other photographic work and thereafter supplies the prints to his client. By doing so he cannot be said to enter into a contract for sale of goods. On the other hand, the contract is for use of skill and labour by the photographer to bring about the desired result. Learned Judges held that the job of a photographer is a contract for work and labour and it is not a contract of sale.</p><p>10. Reliance was also placed on a judgment of this High Court in the case of Photo Emporium v. Addl. District Magistrate reported in 77 STC 199 in which this High Court followed the ratio of the judgment of the Supreme Court in the case of B.C. Kame. In that case, the stand of the Revenue was disapproved by the Orissa High Court.</p><p>11. Similar view was taken in 110 STC 145 in the case of Foto Colour Labs Pvt. Ltd. v. Commercial Taxes Officer where the Tribunal held that the transfer of paper in the photograph is purely incidental and payment is only taken to give positive prints and not to get the photo papers. Therefore, the contract in between the petitioner and his client is not a contract of sale, and neither directly or indirectly works contract is involved in the supply of photo papers. Similar view was taken by the West Bengal Taxation Tribunal in the case of Studio Kamalalaya v. Commercial Tax Officer reported in 89 STC 307.</p><p>12. In the case of Bavens v. Onion of India report in 97 STC 161, learned Judges held that when a photographer takes a photograph of his customer, he develops the negative and supplies positive prints in the desired size to the customer. In doing so the photographer uses his own camera and his own film. The negative belongs to the photographer and not to the customer. No basic goods are provided by the customer which are subjected to processing by the photographer so as to make the contract a works contract. There is no accretion to goods or property or the nucleus of a property which belongs to the customer. It is the skill of the photographer which is most important to get the desired result.</p><p>13. Hon'ble Karnataka High Court followed the same principle in the case of Keshoram Surlndranath Photo-mag Pvt. Ltd. v. Assistant Commissioner of Commercial Taxes reported in 121 STC 175. In that judgment, learned Judges of the Karnataka High Court relied on the judgment of the Supreme Court in B.C. Kame's case and came to the conclusion that in the job of the photographer in supplying positive prints to his customer, no works contract is involved and photographs are not marketable or saleable commodity and as such no tax can be levied on it.</p><p>14. Against the said judgment of the Karnataka High Court, the State of Karnataka High Court filed a S.L.P. before the Hon'ble Supreme Court bearing SLP Nos. 6136-6163 of 2000 and the Hon'ble Supreme Court dismissed the SLP on 20th April, 2000.</p><p>15. In the case of Rainbow Colour Lab v. State of M.P. learned Judges of the Hon'ble Supreme Court reiterated its judgment in B.C. Kame's case and came to the following conclusion:</p><p>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.</p><p>Hon'ble Supreme Court in Bharat Sanchar Nigam Ltd. v. Union of India reported in 145 STC 91 again reiterated the principle in B.C. Kame's case and held that the work done by the photographer is only in the nature of a service contract not involving any sale of goods and held that the stand taken by the State cannot be sustained.</p><p>16. Learned Counsel for the petitioner submitted that the photographs taken by the petitioner are not goods which can be sold and is not a marketable commodity like any other goods. When the copies of photographs are made out, they have no utility or value to any other person than the customer. It is already admitted that the papers utilized for photographs are tax paid goods. Therefore, it is contended by the learned Counsel for the petitioner that the work of photography does not come within the purview of works contract as defined in Section 2(jj) of the Orissa Sales Tax Act.</p><p>17. Learned Counsel for the Revenue in this case virtually did not contest the submission made by the learned Counsel for the petitioner and in support of his contention, learned Counsel for the Revenue relied on a decision of the Supreme Court in the case of Imagic Creative Pvt. Ltd. v. Commissioner of Commercial Taxes and Ors. reported in (2008) 10 RC 236. In that judgment, learned Judges held that since the contract in question is a service contract, it is difficult to hold that in a case of this nature, sales tax would be payable on the value of the entire contract irrespective of the element of service provided.</p><p>For the reasons discussed above, we answer the first question in the negative and the second question, in the affirmative. We thus answer both the questions in favour of the assessee and against the Revenue.</p><p>The three revision applications are thus disposed of.</p><p>No costs.</p><p>B.N. Mahapatra, J.</p><p>18. I agree.<p></p><p>',
		'observations' => null,
		'overruledby' => null,
		'prhistory' => '',
		'pubs' => '106(2008)CLT317; 2008(I)OLR953; (2008)17VST289(Orissa)',
		'ratiodecidendi' => '',
		'respondent' => 'Commissioner of Sales Tax',
		'sub' => 'Sales Tax/VAT',
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		'circuit' => null
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	(int) 1 => 'studio-sujata-vs-commissioner-sales-tax'
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$ctype = ' High Court'
$caseref = 'Imagic Creative Pvt. Ltd. v. Commissioner of Commercial Taxes and Ors.<br>'
$content = array(
	(int) 0 => '<p>A.K. Ganguly, C.J.',
	(int) 1 => '<p>1. Initially three S.J.Cs. being S.J.C. Nos. 10 of 1997, 8 of 1997 and 9 of 1997 were filed and subsequently renumbered as STREV Nos. 212, 214 and 216 of 2007 respectively. In view of the common questions of facts and law, all the three Revision Applications are heard and disposed of together.',
	(int) 2 => '<p>2. The following questions of law arising out of the order passed by the Orissa Sales Tax Tribunal on 8.12.1993 in Second Appeal Nos. 3345 to 3350 of 1991-92 have been referred to this Hon'ble High Court in terms of the order of this Hon'ble Court dated 24.2.1997. The questions are:',
	(int) 3 => '<p>(i) Whether on the facts and in the circumstances of the case, the Tribunal is right to held that tax is exigible for photographs as execution of works contract ?',
	(int) 4 => '<p>(ii) Whether on the facts and in the circumstances of the case, the conclusion of the Tribunal is perverse due to non-consideration and mis-consideration of facts and law and, therefore, it is liable to be set aside for re-hearing ?',
	(int) 5 => '<p>3. The materials facts out of which those questions arise are that the petitioner carries on the business of processing and developing photography. In the usual course of business, the petitioner takes photographs of persons or of family and then develops the negative by employing his skill and labour and then supplies the photographs to the clients. These photographs which are prepared by the petitioner are not commercial items because they are neither purchased nor sold. However, to develop these photographs employment of skill and labour is essential. It may be mentioned that petitioner does not carry on any sale of photographs of national leaders, God and Goddess.',
	(int) 6 => '<p>4. After the passing of 46th amendment of the Constitution of India and consequent amendments thereto in Orissa Sales Tax Act (OST Act), the Sales Tax Officer, Bhubaneswar-II Circle, Bhubaneswar sent notices to assess the petitioner as an unregistered dealer under Section 12 (5) of the OST Act, inter alia, contending that the petitioner's activities can be called 'works contract'. Pursuant to said notice, the petitioner gave its reply and appeared before the Sales Tax Officer and produced the books of account and documents including Receipts, Purchase Memos, Vouchers, Ledger and thereby denied its liability under the OST Act. The petitioner also submitted objection petitions on various dates i.e. 28.12.1985, 10.1.1986, 20.2.1986 and 29.2.1988 contending, inter alia, that the petitioner has no sales tax liability under OST Act and the notices, which were issued, are without jurisdiction.',
	(int) 7 => '<p>5. Ignoring the said objections of the petitioner, the Sales Tax Officer, Bhubaneswar-II Circle, Bhubaneswar assessed the petitioner as an unregistered dealer, inter alia, holding that the petitioner is liable to pay sales tax as petitioner has been alleged to carry activities of 'works contract'. Therefore, orders of assessment being dated 29.2.1988 for the years 1984-85 (9/84 to 3/85), 1985-86 and 1986- 87 under Section 12(5) of OST Act and under Rule 5 of the Orissa Additional Sales Tax Rules, 1975 were passed and a tax of Rs. 20,765.00 and penalty of Rs. 5,000.00 totalling to Rs. 25,765.00 was imposed on the petitioner. The petitioner then filed the First Appeal before the learned Assistant Commissioner of Sales Tax. The First Appellate Authority by an order dated 27.9.1991 confirmed the levy of tax under the OST Act, but reduced the penalty to Rs. 1250.00. Thereupon, the petitioner filed the Second Appeal before the Orissa Sales Tax Tribunal, Cuttack. The said Tribunal heard the Second Appeal and in course of hearing, the petitioner raised various contentions. Ultimately, the Tribunal upheld the levy of tax but deleted the penalty.',
	(int) 8 => '<p>6. Thereafter the petitioner came up with a reference application under Section 24(1) of the Orissa Sales Tax Act framing certain questions for being referred to the Hon'ble High Court. The said prayer of the petitioner was rejected by the Tribunal. Then the petitioner moved Hon'ble High Court under Section 24(2)(b) of the Orissa Sales Tax Act, 1947 whereupon the High Court directed the Tribunal to state to case and refer the questions under Section 24(3) of the OST Act for a decision of the High Court.',
	(int) 9 => '<p>7. Accordingly, the Tribunal stated the case and referred the aforesaid questions for a decision of the High Court.',
	(int) 10 => '<p>8. Learned Counsel for the petitioner before the High Court submitted that in the transaction in question, there is no contract of sale between the petitioner and the client. It is only a contract of service and the photographs, which the petitioner produced by supplying the same has no commercial value and are not marketable. So, there is no question of a works contract. It is the consistent stand of the petitioner that the present photographs which are produced by the petitioner have no utility or value to any other person than the customer. By developing such photographs, the petitioner only renders service to his customers. The customer pays for the service rendered by the petitioner. It is the contention of the petitioner that his activity is similar to that of consulting firm preparing plan and sketches pursuant to client's specification or professional giving opinion on papers. All those activities are done to serve the client. Therefore, this does not come within the purview of the definition of 'goods', 'sale', 'dealer' or 'works contract'. It is the petitioner's case that he purchased the goods, namely, papers on payment of sales tax. Further levy of tax on the personal service rendered to the client of the petitioner will amount to double taxation. It is also the contention of the petitioner that the paper which is used in the photography are incidental and insignificant.',
	(int) 11 => '<p>9. In support of its contention, learned Counsel for the petitioner has relied on several judgments. First reliance was place on the judgment of the Supreme Court in the case of Sales Tax Officer v. B.C. Kame reported in 39 STC 237(SC). At page 241 of the report, learned Judges of the Supreme Court held that a photographer takes the photograph and develops the negatives and does other photographic work and thereafter supplies the prints to his client. By doing so he cannot be said to enter into a contract for sale of goods. On the other hand, the contract is for use of skill and labour by the photographer to bring about the desired result. Learned Judges held that the job of a photographer is a contract for work and labour and it is not a contract of sale.',
	(int) 12 => '<p>10. Reliance was also placed on a judgment of this High Court in the case of Photo Emporium v. Addl. District Magistrate reported in 77 STC 199 in which this High Court followed the ratio of the judgment of the Supreme Court in the case of B.C. Kame. In that case, the stand of the Revenue was disapproved by the Orissa High Court.',
	(int) 13 => '<p>11. Similar view was taken in 110 STC 145 in the case of Foto Colour Labs Pvt. Ltd. v. Commercial Taxes Officer where the Tribunal held that the transfer of paper in the photograph is purely incidental and payment is only taken to give positive prints and not to get the photo papers. Therefore, the contract in between the petitioner and his client is not a contract of sale, and neither directly or indirectly works contract is involved in the supply of photo papers. Similar view was taken by the West Bengal Taxation Tribunal in the case of Studio Kamalalaya v. Commercial Tax Officer reported in 89 STC 307.',
	(int) 14 => '<p>12. In the case of Bavens v. Onion of India report in 97 STC 161, learned Judges held that when a photographer takes a photograph of his customer, he develops the negative and supplies positive prints in the desired size to the customer. In doing so the photographer uses his own camera and his own film. The negative belongs to the photographer and not to the customer. No basic goods are provided by the customer which are subjected to processing by the photographer so as to make the contract a works contract. There is no accretion to goods or property or the nucleus of a property which belongs to the customer. It is the skill of the photographer which is most important to get the desired result.',
	(int) 15 => '<p>13. Hon'ble Karnataka High Court followed the same principle in the case of Keshoram Surlndranath Photo-mag Pvt. Ltd. v. Assistant Commissioner of Commercial Taxes reported in 121 STC 175. In that judgment, learned Judges of the Karnataka High Court relied on the judgment of the Supreme Court in B.C. Kame's case and came to the conclusion that in the job of the photographer in supplying positive prints to his customer, no works contract is involved and photographs are not marketable or saleable commodity and as such no tax can be levied on it.',
	(int) 16 => '<p>14. Against the said judgment of the Karnataka High Court, the State of Karnataka High Court filed a S.L.P. before the Hon'ble Supreme Court bearing SLP Nos. 6136-6163 of 2000 and the Hon'ble Supreme Court dismissed the SLP on 20th April, 2000.',
	(int) 17 => '<p>15. In the case of Rainbow Colour Lab v. State of M.P. learned Judges of the Hon'ble Supreme Court reiterated its judgment in B.C. Kame's case and came to the following conclusion:',
	(int) 18 => '<p>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.',
	(int) 19 => '<p>Hon'ble Supreme Court in Bharat Sanchar Nigam Ltd. v. Union of India reported in 145 STC 91 again reiterated the principle in B.C. Kame's case and held that the work done by the photographer is only in the nature of a service contract not involving any sale of goods and held that the stand taken by the State cannot be sustained.',
	(int) 20 => '<p>16. Learned Counsel for the petitioner submitted that the photographs taken by the petitioner are not goods which can be sold and is not a marketable commodity like any other goods. When the copies of photographs are made out, they have no utility or value to any other person than the customer. It is already admitted that the papers utilized for photographs are tax paid goods. Therefore, it is contended by the learned Counsel for the petitioner that the work of photography does not come within the purview of works contract as defined in Section 2(jj) of the Orissa Sales Tax Act.',
	(int) 21 => '<p>17. Learned Counsel for the Revenue in this case virtually did not contest the submission made by the learned Counsel for the petitioner and in support of his contention, learned Counsel for the Revenue relied on a decision of the Supreme Court in the case of Imagic Creative Pvt. Ltd. v. Commissioner of Commercial Taxes and Ors. reported in (2008) 10 RC 236. In that judgment, learned Judges held that since the contract in question is a service contract, it is difficult to hold that in a case of this nature, sales tax would be payable on the value of the entire contract irrespective of the element of service provided.',
	(int) 22 => '<p>For the reasons discussed above, we answer the first question in the negative and the second question, in the affirmative. We thus answer both the questions in favour of the assessee and against the Revenue.',
	(int) 23 => '<p>The three revision applications are thus disposed of.',
	(int) 24 => '<p>No costs.',
	(int) 25 => '<p>B.N. Mahapatra, J.',
	(int) 26 => '<p>18. I agree.<p>',
	(int) 27 => '<p>'
)
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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.

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			'authreffered' => '',
			'casename' => 'Studio Sujata Vs. Commissioner of Sales Tax',
			'casenote' => 'Sales Tax - Assessment - Contract of Sale - Section 12 (5) of Orissa Sales Tax 1947 - Petitioner carries on business of processing and developing photography - Revenue assessed petitioner under Section 12(5) of Act on ground that activities of petitioner can be called works contract - Petitioner approached to Assistant of Sales Tax on ground that there is no contract of sale between the petitioner and the client, it is only service - Dismissed and affirmed by Tribunal - Hence present petition - Whether Tribunal is right to held that tax is exigible for photographs as execution of works contract or not? - Held, as per precedent laid down by Supreme Court in case of Sales Tax Officer v. B.C. Kame that photographer takes photograph and develops negatives and does other photographic work and thereafter supplies prints to his client - By doing so he cannot be said to enter into contract for sale of goods - Therefore, job of photographer is contract for work and labour and it is not contract of sale - Revenue committed mistake in assessing petitioner under Section 12(5) of Act on basis of contract of sale - Petition disposed of accordingly  - STATE FINANCIAL CORPORATIONS ACT, 1951 [63/1951]. Section 29; [P.K. Tripathy, A.K. Parichha & N.Prusty, JJ] Discharge of loan  Orissa Forest Act (14 of 1972), Section 56  Confiscation of vehicle - Held, The Authorities under Section 56 of the Orissa Forest Act, 1972 are not obliged to release the vehicle from the confiscation proceeding or to pay the sale proceeds of the vehicle after the order of confiscation in favour of Orissa State Financial Corporation when such vehicles were purchased on being financed by the Orissa State Financial Corporation and the loan had not been liquidated by the date of the seizure/confiscation of the vehicle. Concept of first charge or second charge has no applicability when the vehicle is not otherwise disposed of to determine the liabilities of the loanee. On the other hand the vehicle having been found indulged in forest offences was made subject matter of a confiscation proceedings, and therefore, the procedure followed for confiscation of the vehicle and for its sale is punitive in nature and not with a view to give benefit to anybody including the Department which initiated the confiscation proceeding. Apart from that, the claim of the Orissa State Financial Corporation as against its loanee (who had taken the vehicle on hire- purchase agreement) brings the loanee and the sureties within the default clause under the State Financial Corporation Act, 1951 or the heirs and successors of such persons. Procedure is provided in the Act, 1951 and the Rules thereof about the manner in which such loan is to be recovered, and in that context only the vehicle under the hire-purchase agreement is placed as the first charge. If such property is not available for any reason, then the loan is not automatically waived or the loanee and his sureties are not automatically redeemed of the liabilities to repay. The Financial Corporation is concerned with repayment of loan either from the property or persons offered as surety. Thus, a vehicle, which is subject matter of confiscation proceeding under the Act, 1872, being not available to the Orissa State Financial Corporation for adjustment of the unpaid loan, that does not at all bring out an anomalous situation so as to defeat the right of the Orissa State Financial Corporation. Agreement between the Orissa State Financial Corporation and the loanee is a pure and simple contract governed by the provisions of the Contract Act, 1872 read with the provisions in the Act, 1951 and its Rules. On the other hand, a confiscation proceeding under the Act, 1972 is punitive in nature for commission of a forest offence. Thus, by virtue of the provision in Section 56 read with Section 64 (2) of the Act, 1972, the action taken for confiscation of the vehicle cannot be extended to grant protection of the loan advanced by Orissa State Financial Corporation. By doing that it amounts to grant premium to the pick-pockets in as much as, by making payment of the confiscation amount in favour of the Orissa State Financial Corporation the loan burden of the accused of the forest offence is reduced to the extent of the sale proceeds of the vehicle. In other words, on payment of the sale proceeds of the confiscation proceeding to the Orissa State Financial Corporation towards discharge of the loan account of the accused of a forest offence, it would lead to a system to reward him by repayment of his loan. Then it does not become a penalty nor the action become punitive, but it remains as a reward to the accused of forest offence. Such a concept is totally not conceivable from any provision in the Act, 1972 or the Act, 1951. [AIR 2002 Orissa 130 Overruled]. -- STATE FINANCIAL CORPORATIONS ACT, 1951. 
Section 29; Discharge of loan  Orissa Forest Act (14 of 1972), Section 56  Confiscation of vehicle - Held, The Authorities under Section 56 of the Orissa Forest Act, 1972 are not obliged to release the vehicle from the confiscation proceeding or to pay the sale proceeds of the vehicle after the order of confiscation in favour of Orissa State Financial Corporation when such vehicles were purchased on being financed by the Orissa State Financial Corporation and the loan had not been liquidated by the date of the seizure/confiscation of the vehicle. Concept of first charge or second charge has no applicability when the vehicle is not otherwise disposed of to determine the liabilities of the loanee. On the other hand the vehicle having been found indulged in forest offences was made subject matter of a confiscation proceedings, and therefore, the procedure followed for confiscation of the vehicle and for its sale is punitive in nature and not with a view to give benefit to anybody including the Department which initiated the confiscation proceeding. Apart from that, the claim of the Orissa State Financial Corporation as against its loanee (who had taken the vehicle on hire- purchase agreement) brings the loanee and the sureties within the default clause under the State Financial Corporation Act, 1951 or the heirs and successors of such persons. Procedure is provided in the Act, 1951 and the Rules thereof about the manner in which such loan is to be recovered, and in that context only the vehicle under the hire-purchase agreement is placed as the first charge. If such property is not available for any reason, then the loan is not automatically waived or the loanee and his sureties are not automatically redeemed of the liabilities to repay. The Financial Corporation is concerned with repayment of loan either from the property or persons offered as surety. Thus, a vehicle, which is subject matter of confiscation proceeding under the Act, 1872, being not available to the Orissa State Financial Corporation for adjustment of the unpaid loan, that does not at all bring out an anomalous situation so as to defeat the right of the Orissa State Financial Corporation. Agreement between the Orissa State Financial Corporation and the loanee is a pure and simple contract governed by the provisions of the Contract Act, 1872 read with the provisions in the Act, 1951 and its Rules. On the other hand, a confiscation proceeding under the Act, 1972 is punitive in nature for commission of a forest offence. Thus, by virtue of the provision in Section 56 read with Section 64 (2) of the Act, 1972, the action taken for confiscation of the vehicle cannot be extended to grant protection of the loan advanced by Orissa State Financial Corporation. By doing that it amounts to grant premium to the pick-pockets in as much as, by making payment of the confiscation amount in favour of the Orissa State Financial Corporation the loan burden of the accused of the forest offence is reduced to the extent of the sale proceeds of the vehicle. In other words, on payment of the sale proceeds of the confiscation proceeding to the Orissa State Financial Corporation towards discharge of the loan account of the accused of a forest offence, it would lead to a system to reward him by repayment of his loan. Then it does not become a penalty nor the action become punitive, but it remains as a reward to the accused of forest offence. Such a concept is totally not conceivable from any provision in the Act, 1972 or the Act, 1951. [AIR 2002 Orissa 130 Overruled].  -  In that case, the stand of the Revenue was disapproved by the Orissa High Court. 16. Learned Counsel for the petitioner submitted that the photographs taken by the petitioner are not goods which can be sold and is not a marketable commodity like any other goods.',
			'caseanalysis' => null,
			'casesref' => 'Imagic Creative Pvt. Ltd. v. Commissioner of Commercial Taxes and Ors.;',
			'citingcases' => '',
			'counselplain' => '',
			'counseldef' => '',
			'court' => 'Orissa',
			'court_type' => 'HC',
			'decidedon' => '2008-04-02',
			'deposition' => '',
			'favorof' => null,
			'findings' => null,
			'judge' => ' A.K. Ganguly, C.J. and; B.N. Mahapatra, J.',
			'judgement' => '<p style="text-align: justify;">A.K. Ganguly, C.J.</p><p style="text-align: justify;">1. Initially three S.J.Cs. being S.J.C. Nos. 10 of 1997, 8 of 1997 and 9 of 1997 were filed and subsequently renumbered as STREV Nos. 212, 214 and 216 of 2007 respectively. In view of the common questions of facts and law, all the three Revision Applications are heard and disposed of together.</p><p style="text-align: justify;">2. The following questions of law arising out of the order passed by the Orissa Sales Tax Tribunal on 8.12.1993 in Second Appeal Nos. 3345 to 3350 of 1991-92 have been referred to this Hon'ble High Court in terms of the order of this Hon'ble Court dated 24.2.1997. The questions are:</p><p style="text-align: justify;">(i) Whether on the facts and in the circumstances of the case, the Tribunal is right to held that tax is exigible for photographs as execution of works contract ?</p><p style="text-align: justify;">(ii) Whether on the facts and in the circumstances of the case, the conclusion of the Tribunal is perverse due to non-consideration and mis-consideration of facts and law and, therefore, it is liable to be set aside for re-hearing ?</p><p style="text-align: justify;">3. The materials facts out of which those questions arise are that the petitioner carries on the business of processing and developing photography. In the usual course of business, the petitioner takes photographs of persons or of family and then develops the negative by employing his skill and labour and then supplies the photographs to the clients. These photographs which are prepared by the petitioner are not commercial items because they are neither purchased nor sold. However, to develop these photographs employment of skill and labour is essential. It may be mentioned that petitioner does not carry on any sale of photographs of national leaders, God and Goddess.</p><p style="text-align: justify;">4. After the passing of 46th amendment of the Constitution of India and consequent amendments thereto in Orissa Sales Tax Act (OST Act), the Sales Tax Officer, Bhubaneswar-II Circle, Bhubaneswar sent notices to assess the petitioner as an unregistered dealer under Section 12 (5) of the OST Act, inter alia, contending that the petitioner's activities can be called 'works contract'. Pursuant to said notice, the petitioner gave its reply and appeared before the Sales Tax Officer and produced the books of account and documents including Receipts, Purchase Memos, Vouchers, Ledger and thereby denied its liability under the OST Act. The petitioner also submitted objection petitions on various dates i.e. 28.12.1985, 10.1.1986, 20.2.1986 and 29.2.1988 contending, inter alia, that the petitioner has no sales tax liability under OST Act and the notices, which were issued, are without jurisdiction.</p><p style="text-align: justify;">5. Ignoring the said objections of the petitioner, the Sales Tax Officer, Bhubaneswar-II Circle, Bhubaneswar assessed the petitioner as an unregistered dealer, inter alia, holding that the petitioner is liable to pay sales tax as petitioner has been alleged to carry activities of 'works contract'. Therefore, orders of assessment being dated 29.2.1988 for the years 1984-85 (9/84 to 3/85), 1985-86 and 1986- 87 under Section 12(5) of OST Act and under Rule 5 of the Orissa Additional Sales Tax Rules, 1975 were passed and a tax of Rs. 20,765.00 and penalty of Rs. 5,000.00 totalling to Rs. 25,765.00 was imposed on the petitioner. The petitioner then filed the First Appeal before the learned Assistant Commissioner of Sales Tax. The First Appellate Authority by an order dated 27.9.1991 confirmed the levy of tax under the OST Act, but reduced the penalty to Rs. 1250.00. Thereupon, the petitioner filed the Second Appeal before the Orissa Sales Tax Tribunal, Cuttack. The said Tribunal heard the Second Appeal and in course of hearing, the petitioner raised various contentions. Ultimately, the Tribunal upheld the levy of tax but deleted the penalty.</p><p style="text-align: justify;">6. Thereafter the petitioner came up with a reference application under Section 24(1) of the Orissa Sales Tax Act framing certain questions for being referred to the Hon'ble High Court. The said prayer of the petitioner was rejected by the Tribunal. Then the petitioner moved Hon'ble High Court under Section 24(2)(b) of the Orissa Sales Tax Act, 1947 whereupon the High Court directed the Tribunal to state to case and refer the questions under Section 24(3) of the OST Act for a decision of the High Court.</p><p style="text-align: justify;">7. Accordingly, the Tribunal stated the case and referred the aforesaid questions for a decision of the High Court.</p><p style="text-align: justify;">8. Learned Counsel for the petitioner before the High Court submitted that in the transaction in question, there is no contract of sale between the petitioner and the client. It is only a contract of service and the photographs, which the petitioner produced by supplying the same has no commercial value and are not marketable. So, there is no question of a works contract. It is the consistent stand of the petitioner that the present photographs which are produced by the petitioner have no utility or value to any other person than the customer. By developing such photographs, the petitioner only renders service to his customers. The customer pays for the service rendered by the petitioner. It is the contention of the petitioner that his activity is similar to that of consulting firm preparing plan and sketches pursuant to client's specification or professional giving opinion on papers. All those activities are done to serve the client. Therefore, this does not come within the purview of the definition of 'goods', 'sale', 'dealer' or 'works contract'. It is the petitioner's case that he purchased the goods, namely, papers on payment of sales tax. Further levy of tax on the personal service rendered to the client of the petitioner will amount to double taxation. It is also the contention of the petitioner that the paper which is used in the photography are incidental and insignificant.</p><p style="text-align: justify;">9. In support of its contention, learned Counsel for the petitioner has relied on several judgments. First reliance was place on the judgment of the Supreme Court in the case of Sales Tax Officer v. B.C. Kame reported in 39 STC 237(SC). At page 241 of the report, learned Judges of the Supreme Court held that a photographer takes the photograph and develops the negatives and does other photographic work and thereafter supplies the prints to his client. By doing so he cannot be said to enter into a contract for sale of goods. On the other hand, the contract is for use of skill and labour by the photographer to bring about the desired result. Learned Judges held that the job of a photographer is a contract for work and labour and it is not a contract of sale.</p><p style="text-align: justify;">10. Reliance was also placed on a judgment of this High Court in the case of Photo Emporium v. Addl. District Magistrate reported in 77 STC 199 in which this High Court followed the ratio of the judgment of the Supreme Court in the case of B.C. Kame. In that case, the stand of the Revenue was disapproved by the Orissa High Court.</p><p style="text-align: justify;">11. Similar view was taken in 110 STC 145 in the case of Foto Colour Labs Pvt. Ltd. v. Commercial Taxes Officer where the Tribunal held that the transfer of paper in the photograph is purely incidental and payment is only taken to give positive prints and not to get the photo papers. Therefore, the contract in between the petitioner and his client is not a contract of sale, and neither directly or indirectly works contract is involved in the supply of photo papers. Similar view was taken by the West Bengal Taxation Tribunal in the case of Studio Kamalalaya v. Commercial Tax Officer reported in 89 STC 307.</p><p style="text-align: justify;">12. In the case of Bavens v. Onion of India report in 97 STC 161, learned Judges held that when a photographer takes a photograph of his customer, he develops the negative and supplies positive prints in the desired size to the customer. In doing so the photographer uses his own camera and his own film. The negative belongs to the photographer and not to the customer. No basic goods are provided by the customer which are subjected to processing by the photographer so as to make the contract a works contract. There is no accretion to goods or property or the nucleus of a property which belongs to the customer. It is the skill of the photographer which is most important to get the desired result.</p><p style="text-align: justify;">13. Hon'ble Karnataka High Court followed the same principle in the case of Keshoram Surlndranath Photo-mag Pvt. Ltd. v. Assistant Commissioner of Commercial Taxes reported in 121 STC 175. In that judgment, learned Judges of the Karnataka High Court relied on the judgment of the Supreme Court in B.C. Kame's case and came to the conclusion that in the job of the photographer in supplying positive prints to his customer, no works contract is involved and photographs are not marketable or saleable commodity and as such no tax can be levied on it.</p><p style="text-align: justify;">14. Against the said judgment of the Karnataka High Court, the State of Karnataka High Court filed a S.L.P. before the Hon'ble Supreme Court bearing SLP Nos. 6136-6163 of 2000 and the Hon'ble Supreme Court dismissed the SLP on 20th April, 2000.</p><p style="text-align: justify;">15. In the case of Rainbow Colour Lab v. State of M.P. learned Judges of the Hon'ble Supreme Court reiterated its judgment in B.C. Kame's case and came to the following conclusion:</p><p style="text-align: justify;">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.</p><p style="text-align: justify;">Hon'ble Supreme Court in Bharat Sanchar Nigam Ltd. v. Union of India reported in 145 STC 91 again reiterated the principle in B.C. Kame's case and held that the work done by the photographer is only in the nature of a service contract not involving any sale of goods and held that the stand taken by the State cannot be sustained.</p><p style="text-align: justify;">16. Learned Counsel for the petitioner submitted that the photographs taken by the petitioner are not goods which can be sold and is not a marketable commodity like any other goods. When the copies of photographs are made out, they have no utility or value to any other person than the customer. It is already admitted that the papers utilized for photographs are tax paid goods. Therefore, it is contended by the learned Counsel for the petitioner that the work of photography does not come within the purview of works contract as defined in Section 2(jj) of the Orissa Sales Tax Act.</p><p style="text-align: justify;">17. Learned Counsel for the Revenue in this case virtually did not contest the submission made by the learned Counsel for the petitioner and in support of his contention, learned Counsel for the Revenue relied on a decision of the Supreme Court in the case of Imagic Creative Pvt. Ltd. v. Commissioner of Commercial Taxes and Ors. reported in (2008) 10 RC 236. In that judgment, learned Judges held that since the contract in question is a service contract, it is difficult to hold that in a case of this nature, sales tax would be payable on the value of the entire contract irrespective of the element of service provided.</p><p style="text-align: justify;">For the reasons discussed above, we answer the first question in the negative and the second question, in the affirmative. We thus answer both the questions in favour of the assessee and against the Revenue.</p><p style="text-align: justify;">The three revision applications are thus disposed of.</p><p style="text-align: justify;">No costs.</p><p style="text-align: justify;">B.N. Mahapatra, J.</p><p style="text-align: justify;">18. I agree.<p style="text-align: justify;"></p><p style="text-align: justify;">',
			'observations' => null,
			'overruledby' => null,
			'prhistory' => '',
			'pubs' => '106(2008)CLT317; 2008(I)OLR953; (2008)17VST289(Orissa)',
			'ratiodecidendi' => '',
			'respondent' => 'Commissioner of Sales Tax',
			'sub' => 'Sales Tax/VAT',
			'link' => null,
			'circuit' => null
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$title_for_layout = 'Studio Sujata Vs Commissioner of Sales Tax - Citation 531271 - Court Judgment | '
$desc = array(
	'Judgement' => array(
		'id' => '531271',
		'acts' => '',
		'appealno' => '',
		'appellant' => 'Studio Sujata',
		'authreffered' => '',
		'casename' => 'Studio Sujata Vs. Commissioner of Sales Tax',
		'casenote' => 'Sales Tax - Assessment - Contract of Sale - Section 12 (5) of Orissa Sales Tax 1947 - Petitioner carries on business of processing and developing photography - Revenue assessed petitioner under Section 12(5) of Act on ground that activities of petitioner can be called works contract - Petitioner approached to Assistant of Sales Tax on ground that there is no contract of sale between the petitioner and the client, it is only service - Dismissed and affirmed by Tribunal - Hence present petition - Whether Tribunal is right to held that tax is exigible for photographs as execution of works contract or not? - Held, as per precedent laid down by Supreme Court in case of Sales Tax Officer v. B.C. Kame that photographer takes photograph and develops negatives and does other photographic work and thereafter supplies prints to his client - By doing so he cannot be said to enter into contract for sale of goods - Therefore, job of photographer is contract for work and labour and it is not contract of sale - Revenue committed mistake in assessing petitioner under Section 12(5) of Act on basis of contract of sale - Petition disposed of accordingly  - STATE FINANCIAL CORPORATIONS ACT, 1951 [63/1951]. Section 29; [P.K. Tripathy, A.K. Parichha & N.Prusty, JJ] Discharge of loan  Orissa Forest Act (14 of 1972), Section 56  Confiscation of vehicle - Held, The Authorities under Section 56 of the Orissa Forest Act, 1972 are not obliged to release the vehicle from the confiscation proceeding or to pay the sale proceeds of the vehicle after the order of confiscation in favour of Orissa State Financial Corporation when such vehicles were purchased on being financed by the Orissa State Financial Corporation and the loan had not been liquidated by the date of the seizure/confiscation of the vehicle. Concept of first charge or second charge has no applicability when the vehicle is not otherwise disposed of to determine the liabilities of the loanee. On the other hand the vehicle having been found indulged in forest offences was made subject matter of a confiscation proceedings, and therefore, the procedure followed for confiscation of the vehicle and for its sale is punitive in nature and not with a view to give benefit to anybody including the Department which initiated the confiscation proceeding. Apart from that, the claim of the Orissa State Financial Corporation as against its loanee (who had taken the vehicle on hire- purchase agreement) brings the loanee and the sureties within the default clause under the State Financial Corporation Act, 1951 or the heirs and successors of such persons. Procedure is provided in the Act, 1951 and the Rules thereof about the manner in which such loan is to be recovered, and in that context only the vehicle under the hire-purchase agreement is placed as the first charge. If such property is not available for any reason, then the loan is not automatically waived or the loanee and his sureties are not automatically redeemed of the liabilities to repay. The Financial Corporation is concerned with repayment of loan either from the property or persons offered as surety. Thus, a vehicle, which is subject matter of confiscation proceeding under the Act, 1872, being not available to the Orissa State Financial Corporation for adjustment of the unpaid loan, that does not at all bring out an anomalous situation so as to defeat the right of the Orissa State Financial Corporation. Agreement between the Orissa State Financial Corporation and the loanee is a pure and simple contract governed by the provisions of the Contract Act, 1872 read with the provisions in the Act, 1951 and its Rules. On the other hand, a confiscation proceeding under the Act, 1972 is punitive in nature for commission of a forest offence. Thus, by virtue of the provision in Section 56 read with Section 64 (2) of the Act, 1972, the action taken for confiscation of the vehicle cannot be extended to grant protection of the loan advanced by Orissa State Financial Corporation. By doing that it amounts to grant premium to the pick-pockets in as much as, by making payment of the confiscation amount in favour of the Orissa State Financial Corporation the loan burden of the accused of the forest offence is reduced to the extent of the sale proceeds of the vehicle. In other words, on payment of the sale proceeds of the confiscation proceeding to the Orissa State Financial Corporation towards discharge of the loan account of the accused of a forest offence, it would lead to a system to reward him by repayment of his loan. Then it does not become a penalty nor the action become punitive, but it remains as a reward to the accused of forest offence. Such a concept is totally not conceivable from any provision in the Act, 1972 or the Act, 1951. [AIR 2002 Orissa 130 Overruled]. -- STATE FINANCIAL CORPORATIONS ACT, 1951. 
Section 29; Discharge of loan  Orissa Forest Act (14 of 1972), Section 56  Confiscation of vehicle - Held, The Authorities under Section 56 of the Orissa Forest Act, 1972 are not obliged to release the vehicle from the confiscation proceeding or to pay the sale proceeds of the vehicle after the order of confiscation in favour of Orissa State Financial Corporation when such vehicles were purchased on being financed by the Orissa State Financial Corporation and the loan had not been liquidated by the date of the seizure/confiscation of the vehicle. Concept of first charge or second charge has no applicability when the vehicle is not otherwise disposed of to determine the liabilities of the loanee. On the other hand the vehicle having been found indulged in forest offences was made subject matter of a confiscation proceedings, and therefore, the procedure followed for confiscation of the vehicle and for its sale is punitive in nature and not with a view to give benefit to anybody including the Department which initiated the confiscation proceeding. Apart from that, the claim of the Orissa State Financial Corporation as against its loanee (who had taken the vehicle on hire- purchase agreement) brings the loanee and the sureties within the default clause under the State Financial Corporation Act, 1951 or the heirs and successors of such persons. Procedure is provided in the Act, 1951 and the Rules thereof about the manner in which such loan is to be recovered, and in that context only the vehicle under the hire-purchase agreement is placed as the first charge. If such property is not available for any reason, then the loan is not automatically waived or the loanee and his sureties are not automatically redeemed of the liabilities to repay. The Financial Corporation is concerned with repayment of loan either from the property or persons offered as surety. Thus, a vehicle, which is subject matter of confiscation proceeding under the Act, 1872, being not available to the Orissa State Financial Corporation for adjustment of the unpaid loan, that does not at all bring out an anomalous situation so as to defeat the right of the Orissa State Financial Corporation. Agreement between the Orissa State Financial Corporation and the loanee is a pure and simple contract governed by the provisions of the Contract Act, 1872 read with the provisions in the Act, 1951 and its Rules. On the other hand, a confiscation proceeding under the Act, 1972 is punitive in nature for commission of a forest offence. Thus, by virtue of the provision in Section 56 read with Section 64 (2) of the Act, 1972, the action taken for confiscation of the vehicle cannot be extended to grant protection of the loan advanced by Orissa State Financial Corporation. By doing that it amounts to grant premium to the pick-pockets in as much as, by making payment of the confiscation amount in favour of the Orissa State Financial Corporation the loan burden of the accused of the forest offence is reduced to the extent of the sale proceeds of the vehicle. In other words, on payment of the sale proceeds of the confiscation proceeding to the Orissa State Financial Corporation towards discharge of the loan account of the accused of a forest offence, it would lead to a system to reward him by repayment of his loan. Then it does not become a penalty nor the action become punitive, but it remains as a reward to the accused of forest offence. Such a concept is totally not conceivable from any provision in the Act, 1972 or the Act, 1951. [AIR 2002 Orissa 130 Overruled].  -  In that case, the stand of the Revenue was disapproved by the Orissa High Court. 16. Learned Counsel for the petitioner submitted that the photographs taken by the petitioner are not goods which can be sold and is not a marketable commodity like any other goods.',
		'caseanalysis' => null,
		'casesref' => 'Imagic Creative Pvt. Ltd. v. Commissioner of Commercial Taxes and Ors.;',
		'citingcases' => '',
		'counselplain' => '',
		'counseldef' => '',
		'court' => 'Orissa',
		'court_type' => 'HC',
		'decidedon' => '2008-04-02',
		'deposition' => '',
		'favorof' => null,
		'findings' => null,
		'judge' => ' A.K. Ganguly, C.J. and; B.N. Mahapatra, J.',
		'judgement' => '<p>A.K. Ganguly, C.J.</p><p>1. Initially three S.J.Cs. being S.J.C. Nos. 10 of 1997, 8 of 1997 and 9 of 1997 were filed and subsequently renumbered as STREV Nos. 212, 214 and 216 of 2007 respectively. In view of the common questions of facts and law, all the three Revision Applications are heard and disposed of together.</p><p>2. The following questions of law arising out of the order passed by the Orissa Sales Tax Tribunal on 8.12.1993 in Second Appeal Nos. 3345 to 3350 of 1991-92 have been referred to this Hon'ble High Court in terms of the order of this Hon'ble Court dated 24.2.1997. The questions are:</p><p>(i) Whether on the facts and in the circumstances of the case, the Tribunal is right to held that tax is exigible for photographs as execution of works contract ?</p><p>(ii) Whether on the facts and in the circumstances of the case, the conclusion of the Tribunal is perverse due to non-consideration and mis-consideration of facts and law and, therefore, it is liable to be set aside for re-hearing ?</p><p>3. The materials facts out of which those questions arise are that the petitioner carries on the business of processing and developing photography. In the usual course of business, the petitioner takes photographs of persons or of family and then develops the negative by employing his skill and labour and then supplies the photographs to the clients. These photographs which are prepared by the petitioner are not commercial items because they are neither purchased nor sold. However, to develop these photographs employment of skill and labour is essential. It may be mentioned that petitioner does not carry on any sale of photographs of national leaders, God and Goddess.</p><p>4. After the passing of 46th amendment of the Constitution of India and consequent amendments thereto in Orissa Sales Tax Act (OST Act), the Sales Tax Officer, Bhubaneswar-II Circle, Bhubaneswar sent notices to assess the petitioner as an unregistered dealer under Section 12 (5) of the OST Act, inter alia, contending that the petitioner's activities can be called 'works contract'. Pursuant to said notice, the petitioner gave its reply and appeared before the Sales Tax Officer and produced the books of account and documents including Receipts, Purchase Memos, Vouchers, Ledger and thereby denied its liability under the OST Act. The petitioner also submitted objection petitions on various dates i.e. 28.12.1985, 10.1.1986, 20.2.1986 and 29.2.1988 contending, inter alia, that the petitioner has no sales tax liability under OST Act and the notices, which were issued, are without jurisdiction.</p><p>5. Ignoring the said objections of the petitioner, the Sales Tax Officer, Bhubaneswar-II Circle, Bhubaneswar assessed the petitioner as an unregistered dealer, inter alia, holding that the petitioner is liable to pay sales tax as petitioner has been alleged to carry activities of 'works contract'. Therefore, orders of assessment being dated 29.2.1988 for the years 1984-85 (9/84 to 3/85), 1985-86 and 1986- 87 under Section 12(5) of OST Act and under Rule 5 of the Orissa Additional Sales Tax Rules, 1975 were passed and a tax of Rs. 20,765.00 and penalty of Rs. 5,000.00 totalling to Rs. 25,765.00 was imposed on the petitioner. The petitioner then filed the First Appeal before the learned Assistant Commissioner of Sales Tax. The First Appellate Authority by an order dated 27.9.1991 confirmed the levy of tax under the OST Act, but reduced the penalty to Rs. 1250.00. Thereupon, the petitioner filed the Second Appeal before the Orissa Sales Tax Tribunal, Cuttack. The said Tribunal heard the Second Appeal and in course of hearing, the petitioner raised various contentions. Ultimately, the Tribunal upheld the levy of tax but deleted the penalty.</p><p>6. Thereafter the petitioner came up with a reference application under Section 24(1) of the Orissa Sales Tax Act framing certain questions for being referred to the Hon'ble High Court. The said prayer of the petitioner was rejected by the Tribunal. Then the petitioner moved Hon'ble High Court under Section 24(2)(b) of the Orissa Sales Tax Act, 1947 whereupon the High Court directed the Tribunal to state to case and refer the questions under Section 24(3) of the OST Act for a decision of the High Court.</p><p>7. Accordingly, the Tribunal stated the case and referred the aforesaid questions for a decision of the High Court.</p><p>8. Learned Counsel for the petitioner before the High Court submitted that in the transaction in question, there is no contract of sale between the petitioner and the client. It is only a contract of service and the photographs, which the petitioner produced by supplying the same has no commercial value and are not marketable. So, there is no question of a works contract. It is the consistent stand of the petitioner that the present photographs which are produced by the petitioner have no utility or value to any other person than the customer. By developing such photographs, the petitioner only renders service to his customers. The customer pays for the service rendered by the petitioner. It is the contention of the petitioner that his activity is similar to that of consulting firm preparing plan and sketches pursuant to client's specification or professional giving opinion on papers. All those activities are done to serve the client. Therefore, this does not come within the purview of the definition of 'goods', 'sale', 'dealer' or 'works contract'. It is the petitioner's case that he purchased the goods, namely, papers on payment of sales tax. Further levy of tax on the personal service rendered to the client of the petitioner will amount to double taxation. It is also the contention of the petitioner that the paper which is used in the photography are incidental and insignificant.</p><p>9. In support of its contention, learned Counsel for the petitioner has relied on several judgments. First reliance was place on the judgment of the Supreme Court in the case of Sales Tax Officer v. B.C. Kame reported in 39 STC 237(SC). At page 241 of the report, learned Judges of the Supreme Court held that a photographer takes the photograph and develops the negatives and does other photographic work and thereafter supplies the prints to his client. By doing so he cannot be said to enter into a contract for sale of goods. On the other hand, the contract is for use of skill and labour by the photographer to bring about the desired result. Learned Judges held that the job of a photographer is a contract for work and labour and it is not a contract of sale.</p><p>10. Reliance was also placed on a judgment of this High Court in the case of Photo Emporium v. Addl. District Magistrate reported in 77 STC 199 in which this High Court followed the ratio of the judgment of the Supreme Court in the case of B.C. Kame. In that case, the stand of the Revenue was disapproved by the Orissa High Court.</p><p>11. Similar view was taken in 110 STC 145 in the case of Foto Colour Labs Pvt. Ltd. v. Commercial Taxes Officer where the Tribunal held that the transfer of paper in the photograph is purely incidental and payment is only taken to give positive prints and not to get the photo papers. Therefore, the contract in between the petitioner and his client is not a contract of sale, and neither directly or indirectly works contract is involved in the supply of photo papers. Similar view was taken by the West Bengal Taxation Tribunal in the case of Studio Kamalalaya v. Commercial Tax Officer reported in 89 STC 307.</p><p>12. In the case of Bavens v. Onion of India report in 97 STC 161, learned Judges held that when a photographer takes a photograph of his customer, he develops the negative and supplies positive prints in the desired size to the customer. In doing so the photographer uses his own camera and his own film. The negative belongs to the photographer and not to the customer. No basic goods are provided by the customer which are subjected to processing by the photographer so as to make the contract a works contract. There is no accretion to goods or property or the nucleus of a property which belongs to the customer. It is the skill of the photographer which is most important to get the desired result.</p><p>13. Hon'ble Karnataka High Court followed the same principle in the case of Keshoram Surlndranath Photo-mag Pvt. Ltd. v. Assistant Commissioner of Commercial Taxes reported in 121 STC 175. In that judgment, learned Judges of the Karnataka High Court relied on the judgment of the Supreme Court in B.C. Kame's case and came to the conclusion that in the job of the photographer in supplying positive prints to his customer, no works contract is involved and photographs are not marketable or saleable commodity and as such no tax can be levied on it.</p><p>14. Against the said judgment of the Karnataka High Court, the State of Karnataka High Court filed a S.L.P. before the Hon'ble Supreme Court bearing SLP Nos. 6136-6163 of 2000 and the Hon'ble Supreme Court dismissed the SLP on 20th April, 2000.</p><p>15. In the case of Rainbow Colour Lab v. State of M.P. learned Judges of the Hon'ble Supreme Court reiterated its judgment in B.C. Kame's case and came to the following conclusion:</p><p>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.</p><p>Hon'ble Supreme Court in Bharat Sanchar Nigam Ltd. v. Union of India reported in 145 STC 91 again reiterated the principle in B.C. Kame's case and held that the work done by the photographer is only in the nature of a service contract not involving any sale of goods and held that the stand taken by the State cannot be sustained.</p><p>16. Learned Counsel for the petitioner submitted that the photographs taken by the petitioner are not goods which can be sold and is not a marketable commodity like any other goods. When the copies of photographs are made out, they have no utility or value to any other person than the customer. It is already admitted that the papers utilized for photographs are tax paid goods. Therefore, it is contended by the learned Counsel for the petitioner that the work of photography does not come within the purview of works contract as defined in Section 2(jj) of the Orissa Sales Tax Act.</p><p>17. Learned Counsel for the Revenue in this case virtually did not contest the submission made by the learned Counsel for the petitioner and in support of his contention, learned Counsel for the Revenue relied on a decision of the Supreme Court in the case of Imagic Creative Pvt. Ltd. v. Commissioner of Commercial Taxes and Ors. reported in (2008) 10 RC 236. In that judgment, learned Judges held that since the contract in question is a service contract, it is difficult to hold that in a case of this nature, sales tax would be payable on the value of the entire contract irrespective of the element of service provided.</p><p>For the reasons discussed above, we answer the first question in the negative and the second question, in the affirmative. We thus answer both the questions in favour of the assessee and against the Revenue.</p><p>The three revision applications are thus disposed of.</p><p>No costs.</p><p>B.N. Mahapatra, J.</p><p>18. I agree.<p></p><p>',
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	(int) 0 => '<p>A.K. Ganguly, C.J.',
	(int) 1 => '<p>1. Initially three S.J.Cs. being S.J.C. Nos. 10 of 1997, 8 of 1997 and 9 of 1997 were filed and subsequently renumbered as STREV Nos. 212, 214 and 216 of 2007 respectively. In view of the common questions of facts and law, all the three Revision Applications are heard and disposed of together.',
	(int) 2 => '<p>2. The following questions of law arising out of the order passed by the Orissa Sales Tax Tribunal on 8.12.1993 in Second Appeal Nos. 3345 to 3350 of 1991-92 have been referred to this Hon'ble High Court in terms of the order of this Hon'ble Court dated 24.2.1997. The questions are:',
	(int) 3 => '<p>(i) Whether on the facts and in the circumstances of the case, the Tribunal is right to held that tax is exigible for photographs as execution of works contract ?',
	(int) 4 => '<p>(ii) Whether on the facts and in the circumstances of the case, the conclusion of the Tribunal is perverse due to non-consideration and mis-consideration of facts and law and, therefore, it is liable to be set aside for re-hearing ?',
	(int) 5 => '<p>3. The materials facts out of which those questions arise are that the petitioner carries on the business of processing and developing photography. In the usual course of business, the petitioner takes photographs of persons or of family and then develops the negative by employing his skill and labour and then supplies the photographs to the clients. These photographs which are prepared by the petitioner are not commercial items because they are neither purchased nor sold. However, to develop these photographs employment of skill and labour is essential. It may be mentioned that petitioner does not carry on any sale of photographs of national leaders, God and Goddess.',
	(int) 6 => '<p>4. After the passing of 46th amendment of the Constitution of India and consequent amendments thereto in Orissa Sales Tax Act (OST Act), the Sales Tax Officer, Bhubaneswar-II Circle, Bhubaneswar sent notices to assess the petitioner as an unregistered dealer under Section 12 (5) of the OST Act, inter alia, contending that the petitioner's activities can be called 'works contract'. Pursuant to said notice, the petitioner gave its reply and appeared before the Sales Tax Officer and produced the books of account and documents including Receipts, Purchase Memos, Vouchers, Ledger and thereby denied its liability under the OST Act. The petitioner also submitted objection petitions on various dates i.e. 28.12.1985, 10.1.1986, 20.2.1986 and 29.2.1988 contending, inter alia, that the petitioner has no sales tax liability under OST Act and the notices, which were issued, are without jurisdiction.',
	(int) 7 => '<p>5. Ignoring the said objections of the petitioner, the Sales Tax Officer, Bhubaneswar-II Circle, Bhubaneswar assessed the petitioner as an unregistered dealer, inter alia, holding that the petitioner is liable to pay sales tax as petitioner has been alleged to carry activities of 'works contract'. Therefore, orders of assessment being dated 29.2.1988 for the years 1984-85 (9/84 to 3/85), 1985-86 and 1986- 87 under Section 12(5) of OST Act and under Rule 5 of the Orissa Additional Sales Tax Rules, 1975 were passed and a tax of Rs. 20,765.00 and penalty of Rs. 5,000.00 totalling to Rs. 25,765.00 was imposed on the petitioner. The petitioner then filed the First Appeal before the learned Assistant Commissioner of Sales Tax. The First Appellate Authority by an order dated 27.9.1991 confirmed the levy of tax under the OST Act, but reduced the penalty to Rs. 1250.00. Thereupon, the petitioner filed the Second Appeal before the Orissa Sales Tax Tribunal, Cuttack. The said Tribunal heard the Second Appeal and in course of hearing, the petitioner raised various contentions. Ultimately, the Tribunal upheld the levy of tax but deleted the penalty.',
	(int) 8 => '<p>6. Thereafter the petitioner came up with a reference application under Section 24(1) of the Orissa Sales Tax Act framing certain questions for being referred to the Hon'ble High Court. The said prayer of the petitioner was rejected by the Tribunal. Then the petitioner moved Hon'ble High Court under Section 24(2)(b) of the Orissa Sales Tax Act, 1947 whereupon the High Court directed the Tribunal to state to case and refer the questions under Section 24(3) of the OST Act for a decision of the High Court.',
	(int) 9 => '<p>7. Accordingly, the Tribunal stated the case and referred the aforesaid questions for a decision of the High Court.',
	(int) 10 => '<p>8. Learned Counsel for the petitioner before the High Court submitted that in the transaction in question, there is no contract of sale between the petitioner and the client. It is only a contract of service and the photographs, which the petitioner produced by supplying the same has no commercial value and are not marketable. So, there is no question of a works contract. It is the consistent stand of the petitioner that the present photographs which are produced by the petitioner have no utility or value to any other person than the customer. By developing such photographs, the petitioner only renders service to his customers. The customer pays for the service rendered by the petitioner. It is the contention of the petitioner that his activity is similar to that of consulting firm preparing plan and sketches pursuant to client's specification or professional giving opinion on papers. All those activities are done to serve the client. Therefore, this does not come within the purview of the definition of 'goods', 'sale', 'dealer' or 'works contract'. It is the petitioner's case that he purchased the goods, namely, papers on payment of sales tax. Further levy of tax on the personal service rendered to the client of the petitioner will amount to double taxation. It is also the contention of the petitioner that the paper which is used in the photography are incidental and insignificant.',
	(int) 11 => '<p>9. In support of its contention, learned Counsel for the petitioner has relied on several judgments. First reliance was place on the judgment of the Supreme Court in the case of Sales Tax Officer v. B.C. Kame reported in 39 STC 237(SC). At page 241 of the report, learned Judges of the Supreme Court held that a photographer takes the photograph and develops the negatives and does other photographic work and thereafter supplies the prints to his client. By doing so he cannot be said to enter into a contract for sale of goods. On the other hand, the contract is for use of skill and labour by the photographer to bring about the desired result. Learned Judges held that the job of a photographer is a contract for work and labour and it is not a contract of sale.',
	(int) 12 => '<p>10. Reliance was also placed on a judgment of this High Court in the case of Photo Emporium v. Addl. District Magistrate reported in 77 STC 199 in which this High Court followed the ratio of the judgment of the Supreme Court in the case of B.C. Kame. In that case, the stand of the Revenue was disapproved by the Orissa High Court.',
	(int) 13 => '<p>11. Similar view was taken in 110 STC 145 in the case of Foto Colour Labs Pvt. Ltd. v. Commercial Taxes Officer where the Tribunal held that the transfer of paper in the photograph is purely incidental and payment is only taken to give positive prints and not to get the photo papers. Therefore, the contract in between the petitioner and his client is not a contract of sale, and neither directly or indirectly works contract is involved in the supply of photo papers. Similar view was taken by the West Bengal Taxation Tribunal in the case of Studio Kamalalaya v. Commercial Tax Officer reported in 89 STC 307.',
	(int) 14 => '<p>12. In the case of Bavens v. Onion of India report in 97 STC 161, learned Judges held that when a photographer takes a photograph of his customer, he develops the negative and supplies positive prints in the desired size to the customer. In doing so the photographer uses his own camera and his own film. The negative belongs to the photographer and not to the customer. No basic goods are provided by the customer which are subjected to processing by the photographer so as to make the contract a works contract. There is no accretion to goods or property or the nucleus of a property which belongs to the customer. It is the skill of the photographer which is most important to get the desired result.',
	(int) 15 => '<p>13. Hon'ble Karnataka High Court followed the same principle in the case of Keshoram Surlndranath Photo-mag Pvt. Ltd. v. Assistant Commissioner of Commercial Taxes reported in 121 STC 175. In that judgment, learned Judges of the Karnataka High Court relied on the judgment of the Supreme Court in B.C. Kame's case and came to the conclusion that in the job of the photographer in supplying positive prints to his customer, no works contract is involved and photographs are not marketable or saleable commodity and as such no tax can be levied on it.',
	(int) 16 => '<p>14. Against the said judgment of the Karnataka High Court, the State of Karnataka High Court filed a S.L.P. before the Hon'ble Supreme Court bearing SLP Nos. 6136-6163 of 2000 and the Hon'ble Supreme Court dismissed the SLP on 20th April, 2000.',
	(int) 17 => '<p>15. In the case of Rainbow Colour Lab v. State of M.P. learned Judges of the Hon'ble Supreme Court reiterated its judgment in B.C. Kame's case and came to the following conclusion:',
	(int) 18 => '<p>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.',
	(int) 19 => '<p>Hon'ble Supreme Court in Bharat Sanchar Nigam Ltd. v. Union of India reported in 145 STC 91 again reiterated the principle in B.C. Kame's case and held that the work done by the photographer is only in the nature of a service contract not involving any sale of goods and held that the stand taken by the State cannot be sustained.',
	(int) 20 => '<p>16. Learned Counsel for the petitioner submitted that the photographs taken by the petitioner are not goods which can be sold and is not a marketable commodity like any other goods. When the copies of photographs are made out, they have no utility or value to any other person than the customer. It is already admitted that the papers utilized for photographs are tax paid goods. Therefore, it is contended by the learned Counsel for the petitioner that the work of photography does not come within the purview of works contract as defined in Section 2(jj) of the Orissa Sales Tax Act.',
	(int) 21 => '<p>17. Learned Counsel for the Revenue in this case virtually did not contest the submission made by the learned Counsel for the petitioner and in support of his contention, learned Counsel for the Revenue relied on a decision of the Supreme Court in the case of Imagic Creative Pvt. Ltd. v. Commissioner of Commercial Taxes and Ors. reported in (2008) 10 RC 236. In that judgment, learned Judges held that since the contract in question is a service contract, it is difficult to hold that in a case of this nature, sales tax would be payable on the value of the entire contract irrespective of the element of service provided.',
	(int) 22 => '<p>For the reasons discussed above, we answer the first question in the negative and the second question, in the affirmative. We thus answer both the questions in favour of the assessee and against the Revenue.',
	(int) 23 => '<p>The three revision applications are thus disposed of.',
	(int) 24 => '<p>No costs.',
	(int) 25 => '<p>B.N. Mahapatra, J.',
	(int) 26 => '<p>18. I agree.<p>',
	(int) 27 => '<p>'
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Hon'ble Supreme Court in Bharat Sanchar Nigam Ltd. v. Union of India reported in 145 STC 91 again reiterated the principle in B.C. Kame's case and held that the work done by the photographer is only in the nature of a service contract not involving any sale of goods and held that the stand taken by the State cannot be sustained.

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	'title_for_layout' => 'Studio Sujata Vs Commissioner of Sales Tax - Citation 531271 - Court Judgment | ',
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		'Judgement' => array(
			'id' => '531271',
			'acts' => '',
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			'appellant' => 'Studio Sujata',
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			'casename' => 'Studio Sujata Vs. Commissioner of Sales Tax',
			'casenote' => 'Sales Tax - Assessment - Contract of Sale - Section 12 (5) of Orissa Sales Tax 1947 - Petitioner carries on business of processing and developing photography - Revenue assessed petitioner under Section 12(5) of Act on ground that activities of petitioner can be called works contract - Petitioner approached to Assistant of Sales Tax on ground that there is no contract of sale between the petitioner and the client, it is only service - Dismissed and affirmed by Tribunal - Hence present petition - Whether Tribunal is right to held that tax is exigible for photographs as execution of works contract or not? - Held, as per precedent laid down by Supreme Court in case of Sales Tax Officer v. B.C. Kame that photographer takes photograph and develops negatives and does other photographic work and thereafter supplies prints to his client - By doing so he cannot be said to enter into contract for sale of goods - Therefore, job of photographer is contract for work and labour and it is not contract of sale - Revenue committed mistake in assessing petitioner under Section 12(5) of Act on basis of contract of sale - Petition disposed of accordingly  - STATE FINANCIAL CORPORATIONS ACT, 1951 [63/1951]. Section 29; [P.K. Tripathy, A.K. Parichha & N.Prusty, JJ] Discharge of loan  Orissa Forest Act (14 of 1972), Section 56  Confiscation of vehicle - Held, The Authorities under Section 56 of the Orissa Forest Act, 1972 are not obliged to release the vehicle from the confiscation proceeding or to pay the sale proceeds of the vehicle after the order of confiscation in favour of Orissa State Financial Corporation when such vehicles were purchased on being financed by the Orissa State Financial Corporation and the loan had not been liquidated by the date of the seizure/confiscation of the vehicle. Concept of first charge or second charge has no applicability when the vehicle is not otherwise disposed of to determine the liabilities of the loanee. On the other hand the vehicle having been found indulged in forest offences was made subject matter of a confiscation proceedings, and therefore, the procedure followed for confiscation of the vehicle and for its sale is punitive in nature and not with a view to give benefit to anybody including the Department which initiated the confiscation proceeding. Apart from that, the claim of the Orissa State Financial Corporation as against its loanee (who had taken the vehicle on hire- purchase agreement) brings the loanee and the sureties within the default clause under the State Financial Corporation Act, 1951 or the heirs and successors of such persons. Procedure is provided in the Act, 1951 and the Rules thereof about the manner in which such loan is to be recovered, and in that context only the vehicle under the hire-purchase agreement is placed as the first charge. If such property is not available for any reason, then the loan is not automatically waived or the loanee and his sureties are not automatically redeemed of the liabilities to repay. The Financial Corporation is concerned with repayment of loan either from the property or persons offered as surety. Thus, a vehicle, which is subject matter of confiscation proceeding under the Act, 1872, being not available to the Orissa State Financial Corporation for adjustment of the unpaid loan, that does not at all bring out an anomalous situation so as to defeat the right of the Orissa State Financial Corporation. Agreement between the Orissa State Financial Corporation and the loanee is a pure and simple contract governed by the provisions of the Contract Act, 1872 read with the provisions in the Act, 1951 and its Rules. On the other hand, a confiscation proceeding under the Act, 1972 is punitive in nature for commission of a forest offence. Thus, by virtue of the provision in Section 56 read with Section 64 (2) of the Act, 1972, the action taken for confiscation of the vehicle cannot be extended to grant protection of the loan advanced by Orissa State Financial Corporation. By doing that it amounts to grant premium to the pick-pockets in as much as, by making payment of the confiscation amount in favour of the Orissa State Financial Corporation the loan burden of the accused of the forest offence is reduced to the extent of the sale proceeds of the vehicle. In other words, on payment of the sale proceeds of the confiscation proceeding to the Orissa State Financial Corporation towards discharge of the loan account of the accused of a forest offence, it would lead to a system to reward him by repayment of his loan. Then it does not become a penalty nor the action become punitive, but it remains as a reward to the accused of forest offence. Such a concept is totally not conceivable from any provision in the Act, 1972 or the Act, 1951. [AIR 2002 Orissa 130 Overruled]. -- STATE FINANCIAL CORPORATIONS ACT, 1951. 
Section 29; Discharge of loan  Orissa Forest Act (14 of 1972), Section 56  Confiscation of vehicle - Held, The Authorities under Section 56 of the Orissa Forest Act, 1972 are not obliged to release the vehicle from the confiscation proceeding or to pay the sale proceeds of the vehicle after the order of confiscation in favour of Orissa State Financial Corporation when such vehicles were purchased on being financed by the Orissa State Financial Corporation and the loan had not been liquidated by the date of the seizure/confiscation of the vehicle. Concept of first charge or second charge has no applicability when the vehicle is not otherwise disposed of to determine the liabilities of the loanee. On the other hand the vehicle having been found indulged in forest offences was made subject matter of a confiscation proceedings, and therefore, the procedure followed for confiscation of the vehicle and for its sale is punitive in nature and not with a view to give benefit to anybody including the Department which initiated the confiscation proceeding. Apart from that, the claim of the Orissa State Financial Corporation as against its loanee (who had taken the vehicle on hire- purchase agreement) brings the loanee and the sureties within the default clause under the State Financial Corporation Act, 1951 or the heirs and successors of such persons. Procedure is provided in the Act, 1951 and the Rules thereof about the manner in which such loan is to be recovered, and in that context only the vehicle under the hire-purchase agreement is placed as the first charge. If such property is not available for any reason, then the loan is not automatically waived or the loanee and his sureties are not automatically redeemed of the liabilities to repay. The Financial Corporation is concerned with repayment of loan either from the property or persons offered as surety. Thus, a vehicle, which is subject matter of confiscation proceeding under the Act, 1872, being not available to the Orissa State Financial Corporation for adjustment of the unpaid loan, that does not at all bring out an anomalous situation so as to defeat the right of the Orissa State Financial Corporation. Agreement between the Orissa State Financial Corporation and the loanee is a pure and simple contract governed by the provisions of the Contract Act, 1872 read with the provisions in the Act, 1951 and its Rules. On the other hand, a confiscation proceeding under the Act, 1972 is punitive in nature for commission of a forest offence. Thus, by virtue of the provision in Section 56 read with Section 64 (2) of the Act, 1972, the action taken for confiscation of the vehicle cannot be extended to grant protection of the loan advanced by Orissa State Financial Corporation. By doing that it amounts to grant premium to the pick-pockets in as much as, by making payment of the confiscation amount in favour of the Orissa State Financial Corporation the loan burden of the accused of the forest offence is reduced to the extent of the sale proceeds of the vehicle. In other words, on payment of the sale proceeds of the confiscation proceeding to the Orissa State Financial Corporation towards discharge of the loan account of the accused of a forest offence, it would lead to a system to reward him by repayment of his loan. Then it does not become a penalty nor the action become punitive, but it remains as a reward to the accused of forest offence. Such a concept is totally not conceivable from any provision in the Act, 1972 or the Act, 1951. [AIR 2002 Orissa 130 Overruled].  -  In that case, the stand of the Revenue was disapproved by the Orissa High Court. 16. Learned Counsel for the petitioner submitted that the photographs taken by the petitioner are not goods which can be sold and is not a marketable commodity like any other goods.',
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			'judge' => ' A.K. Ganguly, C.J. and; B.N. Mahapatra, J.',
			'judgement' => '<p style="text-align: justify;">A.K. Ganguly, C.J.</p><p style="text-align: justify;">1. Initially three S.J.Cs. being S.J.C. Nos. 10 of 1997, 8 of 1997 and 9 of 1997 were filed and subsequently renumbered as STREV Nos. 212, 214 and 216 of 2007 respectively. In view of the common questions of facts and law, all the three Revision Applications are heard and disposed of together.</p><p style="text-align: justify;">2. The following questions of law arising out of the order passed by the Orissa Sales Tax Tribunal on 8.12.1993 in Second Appeal Nos. 3345 to 3350 of 1991-92 have been referred to this Hon'ble High Court in terms of the order of this Hon'ble Court dated 24.2.1997. The questions are:</p><p style="text-align: justify;">(i) Whether on the facts and in the circumstances of the case, the Tribunal is right to held that tax is exigible for photographs as execution of works contract ?</p><p style="text-align: justify;">(ii) Whether on the facts and in the circumstances of the case, the conclusion of the Tribunal is perverse due to non-consideration and mis-consideration of facts and law and, therefore, it is liable to be set aside for re-hearing ?</p><p style="text-align: justify;">3. The materials facts out of which those questions arise are that the petitioner carries on the business of processing and developing photography. In the usual course of business, the petitioner takes photographs of persons or of family and then develops the negative by employing his skill and labour and then supplies the photographs to the clients. These photographs which are prepared by the petitioner are not commercial items because they are neither purchased nor sold. However, to develop these photographs employment of skill and labour is essential. It may be mentioned that petitioner does not carry on any sale of photographs of national leaders, God and Goddess.</p><p style="text-align: justify;">4. After the passing of 46th amendment of the Constitution of India and consequent amendments thereto in Orissa Sales Tax Act (OST Act), the Sales Tax Officer, Bhubaneswar-II Circle, Bhubaneswar sent notices to assess the petitioner as an unregistered dealer under Section 12 (5) of the OST Act, inter alia, contending that the petitioner's activities can be called 'works contract'. Pursuant to said notice, the petitioner gave its reply and appeared before the Sales Tax Officer and produced the books of account and documents including Receipts, Purchase Memos, Vouchers, Ledger and thereby denied its liability under the OST Act. The petitioner also submitted objection petitions on various dates i.e. 28.12.1985, 10.1.1986, 20.2.1986 and 29.2.1988 contending, inter alia, that the petitioner has no sales tax liability under OST Act and the notices, which were issued, are without jurisdiction.</p><p style="text-align: justify;">5. Ignoring the said objections of the petitioner, the Sales Tax Officer, Bhubaneswar-II Circle, Bhubaneswar assessed the petitioner as an unregistered dealer, inter alia, holding that the petitioner is liable to pay sales tax as petitioner has been alleged to carry activities of 'works contract'. Therefore, orders of assessment being dated 29.2.1988 for the years 1984-85 (9/84 to 3/85), 1985-86 and 1986- 87 under Section 12(5) of OST Act and under Rule 5 of the Orissa Additional Sales Tax Rules, 1975 were passed and a tax of Rs. 20,765.00 and penalty of Rs. 5,000.00 totalling to Rs. 25,765.00 was imposed on the petitioner. The petitioner then filed the First Appeal before the learned Assistant Commissioner of Sales Tax. The First Appellate Authority by an order dated 27.9.1991 confirmed the levy of tax under the OST Act, but reduced the penalty to Rs. 1250.00. Thereupon, the petitioner filed the Second Appeal before the Orissa Sales Tax Tribunal, Cuttack. The said Tribunal heard the Second Appeal and in course of hearing, the petitioner raised various contentions. Ultimately, the Tribunal upheld the levy of tax but deleted the penalty.</p><p style="text-align: justify;">6. Thereafter the petitioner came up with a reference application under Section 24(1) of the Orissa Sales Tax Act framing certain questions for being referred to the Hon'ble High Court. The said prayer of the petitioner was rejected by the Tribunal. Then the petitioner moved Hon'ble High Court under Section 24(2)(b) of the Orissa Sales Tax Act, 1947 whereupon the High Court directed the Tribunal to state to case and refer the questions under Section 24(3) of the OST Act for a decision of the High Court.</p><p style="text-align: justify;">7. Accordingly, the Tribunal stated the case and referred the aforesaid questions for a decision of the High Court.</p><p style="text-align: justify;">8. Learned Counsel for the petitioner before the High Court submitted that in the transaction in question, there is no contract of sale between the petitioner and the client. It is only a contract of service and the photographs, which the petitioner produced by supplying the same has no commercial value and are not marketable. So, there is no question of a works contract. It is the consistent stand of the petitioner that the present photographs which are produced by the petitioner have no utility or value to any other person than the customer. By developing such photographs, the petitioner only renders service to his customers. The customer pays for the service rendered by the petitioner. It is the contention of the petitioner that his activity is similar to that of consulting firm preparing plan and sketches pursuant to client's specification or professional giving opinion on papers. All those activities are done to serve the client. Therefore, this does not come within the purview of the definition of 'goods', 'sale', 'dealer' or 'works contract'. It is the petitioner's case that he purchased the goods, namely, papers on payment of sales tax. Further levy of tax on the personal service rendered to the client of the petitioner will amount to double taxation. It is also the contention of the petitioner that the paper which is used in the photography are incidental and insignificant.</p><p style="text-align: justify;">9. In support of its contention, learned Counsel for the petitioner has relied on several judgments. First reliance was place on the judgment of the Supreme Court in the case of Sales Tax Officer v. B.C. Kame reported in 39 STC 237(SC). At page 241 of the report, learned Judges of the Supreme Court held that a photographer takes the photograph and develops the negatives and does other photographic work and thereafter supplies the prints to his client. By doing so he cannot be said to enter into a contract for sale of goods. On the other hand, the contract is for use of skill and labour by the photographer to bring about the desired result. Learned Judges held that the job of a photographer is a contract for work and labour and it is not a contract of sale.</p><p style="text-align: justify;">10. Reliance was also placed on a judgment of this High Court in the case of Photo Emporium v. Addl. District Magistrate reported in 77 STC 199 in which this High Court followed the ratio of the judgment of the Supreme Court in the case of B.C. Kame. In that case, the stand of the Revenue was disapproved by the Orissa High Court.</p><p style="text-align: justify;">11. Similar view was taken in 110 STC 145 in the case of Foto Colour Labs Pvt. Ltd. v. Commercial Taxes Officer where the Tribunal held that the transfer of paper in the photograph is purely incidental and payment is only taken to give positive prints and not to get the photo papers. Therefore, the contract in between the petitioner and his client is not a contract of sale, and neither directly or indirectly works contract is involved in the supply of photo papers. Similar view was taken by the West Bengal Taxation Tribunal in the case of Studio Kamalalaya v. Commercial Tax Officer reported in 89 STC 307.</p><p style="text-align: justify;">12. In the case of Bavens v. Onion of India report in 97 STC 161, learned Judges held that when a photographer takes a photograph of his customer, he develops the negative and supplies positive prints in the desired size to the customer. In doing so the photographer uses his own camera and his own film. The negative belongs to the photographer and not to the customer. No basic goods are provided by the customer which are subjected to processing by the photographer so as to make the contract a works contract. There is no accretion to goods or property or the nucleus of a property which belongs to the customer. It is the skill of the photographer which is most important to get the desired result.</p><p style="text-align: justify;">13. Hon'ble Karnataka High Court followed the same principle in the case of Keshoram Surlndranath Photo-mag Pvt. Ltd. v. Assistant Commissioner of Commercial Taxes reported in 121 STC 175. In that judgment, learned Judges of the Karnataka High Court relied on the judgment of the Supreme Court in B.C. Kame's case and came to the conclusion that in the job of the photographer in supplying positive prints to his customer, no works contract is involved and photographs are not marketable or saleable commodity and as such no tax can be levied on it.</p><p style="text-align: justify;">14. Against the said judgment of the Karnataka High Court, the State of Karnataka High Court filed a S.L.P. before the Hon'ble Supreme Court bearing SLP Nos. 6136-6163 of 2000 and the Hon'ble Supreme Court dismissed the SLP on 20th April, 2000.</p><p style="text-align: justify;">15. In the case of Rainbow Colour Lab v. State of M.P. learned Judges of the Hon'ble Supreme Court reiterated its judgment in B.C. Kame's case and came to the following conclusion:</p><p style="text-align: justify;">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.</p><p style="text-align: justify;">Hon'ble Supreme Court in Bharat Sanchar Nigam Ltd. v. Union of India reported in 145 STC 91 again reiterated the principle in B.C. Kame's case and held that the work done by the photographer is only in the nature of a service contract not involving any sale of goods and held that the stand taken by the State cannot be sustained.</p><p style="text-align: justify;">16. Learned Counsel for the petitioner submitted that the photographs taken by the petitioner are not goods which can be sold and is not a marketable commodity like any other goods. When the copies of photographs are made out, they have no utility or value to any other person than the customer. It is already admitted that the papers utilized for photographs are tax paid goods. Therefore, it is contended by the learned Counsel for the petitioner that the work of photography does not come within the purview of works contract as defined in Section 2(jj) of the Orissa Sales Tax Act.</p><p style="text-align: justify;">17. Learned Counsel for the Revenue in this case virtually did not contest the submission made by the learned Counsel for the petitioner and in support of his contention, learned Counsel for the Revenue relied on a decision of the Supreme Court in the case of Imagic Creative Pvt. Ltd. v. Commissioner of Commercial Taxes and Ors. reported in (2008) 10 RC 236. In that judgment, learned Judges held that since the contract in question is a service contract, it is difficult to hold that in a case of this nature, sales tax would be payable on the value of the entire contract irrespective of the element of service provided.</p><p style="text-align: justify;">For the reasons discussed above, we answer the first question in the negative and the second question, in the affirmative. We thus answer both the questions in favour of the assessee and against the Revenue.</p><p style="text-align: justify;">The three revision applications are thus disposed of.</p><p style="text-align: justify;">No costs.</p><p style="text-align: justify;">B.N. Mahapatra, J.</p><p style="text-align: justify;">18. I agree.<p style="text-align: justify;"></p><p style="text-align: justify;">',
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$title_for_layout = 'Studio Sujata Vs Commissioner of Sales Tax - Citation 531271 - Court Judgment | '
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	'Judgement' => array(
		'id' => '531271',
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		'appellant' => 'Studio Sujata',
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		'casename' => 'Studio Sujata Vs. Commissioner of Sales Tax',
		'casenote' => 'Sales Tax - Assessment - Contract of Sale - Section 12 (5) of Orissa Sales Tax 1947 - Petitioner carries on business of processing and developing photography - Revenue assessed petitioner under Section 12(5) of Act on ground that activities of petitioner can be called works contract - Petitioner approached to Assistant of Sales Tax on ground that there is no contract of sale between the petitioner and the client, it is only service - Dismissed and affirmed by Tribunal - Hence present petition - Whether Tribunal is right to held that tax is exigible for photographs as execution of works contract or not? - Held, as per precedent laid down by Supreme Court in case of Sales Tax Officer v. B.C. Kame that photographer takes photograph and develops negatives and does other photographic work and thereafter supplies prints to his client - By doing so he cannot be said to enter into contract for sale of goods - Therefore, job of photographer is contract for work and labour and it is not contract of sale - Revenue committed mistake in assessing petitioner under Section 12(5) of Act on basis of contract of sale - Petition disposed of accordingly  - STATE FINANCIAL CORPORATIONS ACT, 1951 [63/1951]. Section 29; [P.K. Tripathy, A.K. Parichha & N.Prusty, JJ] Discharge of loan  Orissa Forest Act (14 of 1972), Section 56  Confiscation of vehicle - Held, The Authorities under Section 56 of the Orissa Forest Act, 1972 are not obliged to release the vehicle from the confiscation proceeding or to pay the sale proceeds of the vehicle after the order of confiscation in favour of Orissa State Financial Corporation when such vehicles were purchased on being financed by the Orissa State Financial Corporation and the loan had not been liquidated by the date of the seizure/confiscation of the vehicle. Concept of first charge or second charge has no applicability when the vehicle is not otherwise disposed of to determine the liabilities of the loanee. On the other hand the vehicle having been found indulged in forest offences was made subject matter of a confiscation proceedings, and therefore, the procedure followed for confiscation of the vehicle and for its sale is punitive in nature and not with a view to give benefit to anybody including the Department which initiated the confiscation proceeding. Apart from that, the claim of the Orissa State Financial Corporation as against its loanee (who had taken the vehicle on hire- purchase agreement) brings the loanee and the sureties within the default clause under the State Financial Corporation Act, 1951 or the heirs and successors of such persons. Procedure is provided in the Act, 1951 and the Rules thereof about the manner in which such loan is to be recovered, and in that context only the vehicle under the hire-purchase agreement is placed as the first charge. If such property is not available for any reason, then the loan is not automatically waived or the loanee and his sureties are not automatically redeemed of the liabilities to repay. The Financial Corporation is concerned with repayment of loan either from the property or persons offered as surety. Thus, a vehicle, which is subject matter of confiscation proceeding under the Act, 1872, being not available to the Orissa State Financial Corporation for adjustment of the unpaid loan, that does not at all bring out an anomalous situation so as to defeat the right of the Orissa State Financial Corporation. Agreement between the Orissa State Financial Corporation and the loanee is a pure and simple contract governed by the provisions of the Contract Act, 1872 read with the provisions in the Act, 1951 and its Rules. On the other hand, a confiscation proceeding under the Act, 1972 is punitive in nature for commission of a forest offence. Thus, by virtue of the provision in Section 56 read with Section 64 (2) of the Act, 1972, the action taken for confiscation of the vehicle cannot be extended to grant protection of the loan advanced by Orissa State Financial Corporation. By doing that it amounts to grant premium to the pick-pockets in as much as, by making payment of the confiscation amount in favour of the Orissa State Financial Corporation the loan burden of the accused of the forest offence is reduced to the extent of the sale proceeds of the vehicle. In other words, on payment of the sale proceeds of the confiscation proceeding to the Orissa State Financial Corporation towards discharge of the loan account of the accused of a forest offence, it would lead to a system to reward him by repayment of his loan. Then it does not become a penalty nor the action become punitive, but it remains as a reward to the accused of forest offence. Such a concept is totally not conceivable from any provision in the Act, 1972 or the Act, 1951. [AIR 2002 Orissa 130 Overruled]. -- STATE FINANCIAL CORPORATIONS ACT, 1951. 
Section 29; Discharge of loan  Orissa Forest Act (14 of 1972), Section 56  Confiscation of vehicle - Held, The Authorities under Section 56 of the Orissa Forest Act, 1972 are not obliged to release the vehicle from the confiscation proceeding or to pay the sale proceeds of the vehicle after the order of confiscation in favour of Orissa State Financial Corporation when such vehicles were purchased on being financed by the Orissa State Financial Corporation and the loan had not been liquidated by the date of the seizure/confiscation of the vehicle. Concept of first charge or second charge has no applicability when the vehicle is not otherwise disposed of to determine the liabilities of the loanee. On the other hand the vehicle having been found indulged in forest offences was made subject matter of a confiscation proceedings, and therefore, the procedure followed for confiscation of the vehicle and for its sale is punitive in nature and not with a view to give benefit to anybody including the Department which initiated the confiscation proceeding. Apart from that, the claim of the Orissa State Financial Corporation as against its loanee (who had taken the vehicle on hire- purchase agreement) brings the loanee and the sureties within the default clause under the State Financial Corporation Act, 1951 or the heirs and successors of such persons. Procedure is provided in the Act, 1951 and the Rules thereof about the manner in which such loan is to be recovered, and in that context only the vehicle under the hire-purchase agreement is placed as the first charge. If such property is not available for any reason, then the loan is not automatically waived or the loanee and his sureties are not automatically redeemed of the liabilities to repay. The Financial Corporation is concerned with repayment of loan either from the property or persons offered as surety. Thus, a vehicle, which is subject matter of confiscation proceeding under the Act, 1872, being not available to the Orissa State Financial Corporation for adjustment of the unpaid loan, that does not at all bring out an anomalous situation so as to defeat the right of the Orissa State Financial Corporation. Agreement between the Orissa State Financial Corporation and the loanee is a pure and simple contract governed by the provisions of the Contract Act, 1872 read with the provisions in the Act, 1951 and its Rules. On the other hand, a confiscation proceeding under the Act, 1972 is punitive in nature for commission of a forest offence. Thus, by virtue of the provision in Section 56 read with Section 64 (2) of the Act, 1972, the action taken for confiscation of the vehicle cannot be extended to grant protection of the loan advanced by Orissa State Financial Corporation. By doing that it amounts to grant premium to the pick-pockets in as much as, by making payment of the confiscation amount in favour of the Orissa State Financial Corporation the loan burden of the accused of the forest offence is reduced to the extent of the sale proceeds of the vehicle. In other words, on payment of the sale proceeds of the confiscation proceeding to the Orissa State Financial Corporation towards discharge of the loan account of the accused of a forest offence, it would lead to a system to reward him by repayment of his loan. Then it does not become a penalty nor the action become punitive, but it remains as a reward to the accused of forest offence. Such a concept is totally not conceivable from any provision in the Act, 1972 or the Act, 1951. [AIR 2002 Orissa 130 Overruled].  -  In that case, the stand of the Revenue was disapproved by the Orissa High Court. 16. Learned Counsel for the petitioner submitted that the photographs taken by the petitioner are not goods which can be sold and is not a marketable commodity like any other goods.',
		'caseanalysis' => null,
		'casesref' => 'Imagic Creative Pvt. Ltd. v. Commissioner of Commercial Taxes and Ors.;',
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		'court' => 'Orissa',
		'court_type' => 'HC',
		'decidedon' => '2008-04-02',
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		'judge' => ' A.K. Ganguly, C.J. and; B.N. Mahapatra, J.',
		'judgement' => '<p>A.K. Ganguly, C.J.</p><p>1. Initially three S.J.Cs. being S.J.C. Nos. 10 of 1997, 8 of 1997 and 9 of 1997 were filed and subsequently renumbered as STREV Nos. 212, 214 and 216 of 2007 respectively. In view of the common questions of facts and law, all the three Revision Applications are heard and disposed of together.</p><p>2. The following questions of law arising out of the order passed by the Orissa Sales Tax Tribunal on 8.12.1993 in Second Appeal Nos. 3345 to 3350 of 1991-92 have been referred to this Hon'ble High Court in terms of the order of this Hon'ble Court dated 24.2.1997. The questions are:</p><p>(i) Whether on the facts and in the circumstances of the case, the Tribunal is right to held that tax is exigible for photographs as execution of works contract ?</p><p>(ii) Whether on the facts and in the circumstances of the case, the conclusion of the Tribunal is perverse due to non-consideration and mis-consideration of facts and law and, therefore, it is liable to be set aside for re-hearing ?</p><p>3. The materials facts out of which those questions arise are that the petitioner carries on the business of processing and developing photography. In the usual course of business, the petitioner takes photographs of persons or of family and then develops the negative by employing his skill and labour and then supplies the photographs to the clients. These photographs which are prepared by the petitioner are not commercial items because they are neither purchased nor sold. However, to develop these photographs employment of skill and labour is essential. It may be mentioned that petitioner does not carry on any sale of photographs of national leaders, God and Goddess.</p><p>4. After the passing of 46th amendment of the Constitution of India and consequent amendments thereto in Orissa Sales Tax Act (OST Act), the Sales Tax Officer, Bhubaneswar-II Circle, Bhubaneswar sent notices to assess the petitioner as an unregistered dealer under Section 12 (5) of the OST Act, inter alia, contending that the petitioner's activities can be called 'works contract'. Pursuant to said notice, the petitioner gave its reply and appeared before the Sales Tax Officer and produced the books of account and documents including Receipts, Purchase Memos, Vouchers, Ledger and thereby denied its liability under the OST Act. The petitioner also submitted objection petitions on various dates i.e. 28.12.1985, 10.1.1986, 20.2.1986 and 29.2.1988 contending, inter alia, that the petitioner has no sales tax liability under OST Act and the notices, which were issued, are without jurisdiction.</p><p>5. Ignoring the said objections of the petitioner, the Sales Tax Officer, Bhubaneswar-II Circle, Bhubaneswar assessed the petitioner as an unregistered dealer, inter alia, holding that the petitioner is liable to pay sales tax as petitioner has been alleged to carry activities of 'works contract'. Therefore, orders of assessment being dated 29.2.1988 for the years 1984-85 (9/84 to 3/85), 1985-86 and 1986- 87 under Section 12(5) of OST Act and under Rule 5 of the Orissa Additional Sales Tax Rules, 1975 were passed and a tax of Rs. 20,765.00 and penalty of Rs. 5,000.00 totalling to Rs. 25,765.00 was imposed on the petitioner. The petitioner then filed the First Appeal before the learned Assistant Commissioner of Sales Tax. The First Appellate Authority by an order dated 27.9.1991 confirmed the levy of tax under the OST Act, but reduced the penalty to Rs. 1250.00. Thereupon, the petitioner filed the Second Appeal before the Orissa Sales Tax Tribunal, Cuttack. The said Tribunal heard the Second Appeal and in course of hearing, the petitioner raised various contentions. Ultimately, the Tribunal upheld the levy of tax but deleted the penalty.</p><p>6. Thereafter the petitioner came up with a reference application under Section 24(1) of the Orissa Sales Tax Act framing certain questions for being referred to the Hon'ble High Court. The said prayer of the petitioner was rejected by the Tribunal. Then the petitioner moved Hon'ble High Court under Section 24(2)(b) of the Orissa Sales Tax Act, 1947 whereupon the High Court directed the Tribunal to state to case and refer the questions under Section 24(3) of the OST Act for a decision of the High Court.</p><p>7. Accordingly, the Tribunal stated the case and referred the aforesaid questions for a decision of the High Court.</p><p>8. Learned Counsel for the petitioner before the High Court submitted that in the transaction in question, there is no contract of sale between the petitioner and the client. It is only a contract of service and the photographs, which the petitioner produced by supplying the same has no commercial value and are not marketable. So, there is no question of a works contract. It is the consistent stand of the petitioner that the present photographs which are produced by the petitioner have no utility or value to any other person than the customer. By developing such photographs, the petitioner only renders service to his customers. The customer pays for the service rendered by the petitioner. It is the contention of the petitioner that his activity is similar to that of consulting firm preparing plan and sketches pursuant to client's specification or professional giving opinion on papers. All those activities are done to serve the client. Therefore, this does not come within the purview of the definition of 'goods', 'sale', 'dealer' or 'works contract'. It is the petitioner's case that he purchased the goods, namely, papers on payment of sales tax. Further levy of tax on the personal service rendered to the client of the petitioner will amount to double taxation. It is also the contention of the petitioner that the paper which is used in the photography are incidental and insignificant.</p><p>9. In support of its contention, learned Counsel for the petitioner has relied on several judgments. First reliance was place on the judgment of the Supreme Court in the case of Sales Tax Officer v. B.C. Kame reported in 39 STC 237(SC). At page 241 of the report, learned Judges of the Supreme Court held that a photographer takes the photograph and develops the negatives and does other photographic work and thereafter supplies the prints to his client. By doing so he cannot be said to enter into a contract for sale of goods. On the other hand, the contract is for use of skill and labour by the photographer to bring about the desired result. Learned Judges held that the job of a photographer is a contract for work and labour and it is not a contract of sale.</p><p>10. Reliance was also placed on a judgment of this High Court in the case of Photo Emporium v. Addl. District Magistrate reported in 77 STC 199 in which this High Court followed the ratio of the judgment of the Supreme Court in the case of B.C. Kame. In that case, the stand of the Revenue was disapproved by the Orissa High Court.</p><p>11. Similar view was taken in 110 STC 145 in the case of Foto Colour Labs Pvt. Ltd. v. Commercial Taxes Officer where the Tribunal held that the transfer of paper in the photograph is purely incidental and payment is only taken to give positive prints and not to get the photo papers. Therefore, the contract in between the petitioner and his client is not a contract of sale, and neither directly or indirectly works contract is involved in the supply of photo papers. Similar view was taken by the West Bengal Taxation Tribunal in the case of Studio Kamalalaya v. Commercial Tax Officer reported in 89 STC 307.</p><p>12. In the case of Bavens v. Onion of India report in 97 STC 161, learned Judges held that when a photographer takes a photograph of his customer, he develops the negative and supplies positive prints in the desired size to the customer. In doing so the photographer uses his own camera and his own film. The negative belongs to the photographer and not to the customer. No basic goods are provided by the customer which are subjected to processing by the photographer so as to make the contract a works contract. There is no accretion to goods or property or the nucleus of a property which belongs to the customer. It is the skill of the photographer which is most important to get the desired result.</p><p>13. Hon'ble Karnataka High Court followed the same principle in the case of Keshoram Surlndranath Photo-mag Pvt. Ltd. v. Assistant Commissioner of Commercial Taxes reported in 121 STC 175. In that judgment, learned Judges of the Karnataka High Court relied on the judgment of the Supreme Court in B.C. Kame's case and came to the conclusion that in the job of the photographer in supplying positive prints to his customer, no works contract is involved and photographs are not marketable or saleable commodity and as such no tax can be levied on it.</p><p>14. Against the said judgment of the Karnataka High Court, the State of Karnataka High Court filed a S.L.P. before the Hon'ble Supreme Court bearing SLP Nos. 6136-6163 of 2000 and the Hon'ble Supreme Court dismissed the SLP on 20th April, 2000.</p><p>15. In the case of Rainbow Colour Lab v. State of M.P. learned Judges of the Hon'ble Supreme Court reiterated its judgment in B.C. Kame's case and came to the following conclusion:</p><p>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.</p><p>Hon'ble Supreme Court in Bharat Sanchar Nigam Ltd. v. Union of India reported in 145 STC 91 again reiterated the principle in B.C. Kame's case and held that the work done by the photographer is only in the nature of a service contract not involving any sale of goods and held that the stand taken by the State cannot be sustained.</p><p>16. Learned Counsel for the petitioner submitted that the photographs taken by the petitioner are not goods which can be sold and is not a marketable commodity like any other goods. When the copies of photographs are made out, they have no utility or value to any other person than the customer. It is already admitted that the papers utilized for photographs are tax paid goods. Therefore, it is contended by the learned Counsel for the petitioner that the work of photography does not come within the purview of works contract as defined in Section 2(jj) of the Orissa Sales Tax Act.</p><p>17. Learned Counsel for the Revenue in this case virtually did not contest the submission made by the learned Counsel for the petitioner and in support of his contention, learned Counsel for the Revenue relied on a decision of the Supreme Court in the case of Imagic Creative Pvt. Ltd. v. Commissioner of Commercial Taxes and Ors. reported in (2008) 10 RC 236. In that judgment, learned Judges held that since the contract in question is a service contract, it is difficult to hold that in a case of this nature, sales tax would be payable on the value of the entire contract irrespective of the element of service provided.</p><p>For the reasons discussed above, we answer the first question in the negative and the second question, in the affirmative. We thus answer both the questions in favour of the assessee and against the Revenue.</p><p>The three revision applications are thus disposed of.</p><p>No costs.</p><p>B.N. Mahapatra, J.</p><p>18. I agree.<p></p><p>',
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	(int) 0 => '<p>A.K. Ganguly, C.J.',
	(int) 1 => '<p>1. Initially three S.J.Cs. being S.J.C. Nos. 10 of 1997, 8 of 1997 and 9 of 1997 were filed and subsequently renumbered as STREV Nos. 212, 214 and 216 of 2007 respectively. In view of the common questions of facts and law, all the three Revision Applications are heard and disposed of together.',
	(int) 2 => '<p>2. The following questions of law arising out of the order passed by the Orissa Sales Tax Tribunal on 8.12.1993 in Second Appeal Nos. 3345 to 3350 of 1991-92 have been referred to this Hon'ble High Court in terms of the order of this Hon'ble Court dated 24.2.1997. The questions are:',
	(int) 3 => '<p>(i) Whether on the facts and in the circumstances of the case, the Tribunal is right to held that tax is exigible for photographs as execution of works contract ?',
	(int) 4 => '<p>(ii) Whether on the facts and in the circumstances of the case, the conclusion of the Tribunal is perverse due to non-consideration and mis-consideration of facts and law and, therefore, it is liable to be set aside for re-hearing ?',
	(int) 5 => '<p>3. The materials facts out of which those questions arise are that the petitioner carries on the business of processing and developing photography. In the usual course of business, the petitioner takes photographs of persons or of family and then develops the negative by employing his skill and labour and then supplies the photographs to the clients. These photographs which are prepared by the petitioner are not commercial items because they are neither purchased nor sold. However, to develop these photographs employment of skill and labour is essential. It may be mentioned that petitioner does not carry on any sale of photographs of national leaders, God and Goddess.',
	(int) 6 => '<p>4. After the passing of 46th amendment of the Constitution of India and consequent amendments thereto in Orissa Sales Tax Act (OST Act), the Sales Tax Officer, Bhubaneswar-II Circle, Bhubaneswar sent notices to assess the petitioner as an unregistered dealer under Section 12 (5) of the OST Act, inter alia, contending that the petitioner's activities can be called 'works contract'. Pursuant to said notice, the petitioner gave its reply and appeared before the Sales Tax Officer and produced the books of account and documents including Receipts, Purchase Memos, Vouchers, Ledger and thereby denied its liability under the OST Act. The petitioner also submitted objection petitions on various dates i.e. 28.12.1985, 10.1.1986, 20.2.1986 and 29.2.1988 contending, inter alia, that the petitioner has no sales tax liability under OST Act and the notices, which were issued, are without jurisdiction.',
	(int) 7 => '<p>5. Ignoring the said objections of the petitioner, the Sales Tax Officer, Bhubaneswar-II Circle, Bhubaneswar assessed the petitioner as an unregistered dealer, inter alia, holding that the petitioner is liable to pay sales tax as petitioner has been alleged to carry activities of 'works contract'. Therefore, orders of assessment being dated 29.2.1988 for the years 1984-85 (9/84 to 3/85), 1985-86 and 1986- 87 under Section 12(5) of OST Act and under Rule 5 of the Orissa Additional Sales Tax Rules, 1975 were passed and a tax of Rs. 20,765.00 and penalty of Rs. 5,000.00 totalling to Rs. 25,765.00 was imposed on the petitioner. The petitioner then filed the First Appeal before the learned Assistant Commissioner of Sales Tax. The First Appellate Authority by an order dated 27.9.1991 confirmed the levy of tax under the OST Act, but reduced the penalty to Rs. 1250.00. Thereupon, the petitioner filed the Second Appeal before the Orissa Sales Tax Tribunal, Cuttack. The said Tribunal heard the Second Appeal and in course of hearing, the petitioner raised various contentions. Ultimately, the Tribunal upheld the levy of tax but deleted the penalty.',
	(int) 8 => '<p>6. Thereafter the petitioner came up with a reference application under Section 24(1) of the Orissa Sales Tax Act framing certain questions for being referred to the Hon'ble High Court. The said prayer of the petitioner was rejected by the Tribunal. Then the petitioner moved Hon'ble High Court under Section 24(2)(b) of the Orissa Sales Tax Act, 1947 whereupon the High Court directed the Tribunal to state to case and refer the questions under Section 24(3) of the OST Act for a decision of the High Court.',
	(int) 9 => '<p>7. Accordingly, the Tribunal stated the case and referred the aforesaid questions for a decision of the High Court.',
	(int) 10 => '<p>8. Learned Counsel for the petitioner before the High Court submitted that in the transaction in question, there is no contract of sale between the petitioner and the client. It is only a contract of service and the photographs, which the petitioner produced by supplying the same has no commercial value and are not marketable. So, there is no question of a works contract. It is the consistent stand of the petitioner that the present photographs which are produced by the petitioner have no utility or value to any other person than the customer. By developing such photographs, the petitioner only renders service to his customers. The customer pays for the service rendered by the petitioner. It is the contention of the petitioner that his activity is similar to that of consulting firm preparing plan and sketches pursuant to client's specification or professional giving opinion on papers. All those activities are done to serve the client. Therefore, this does not come within the purview of the definition of 'goods', 'sale', 'dealer' or 'works contract'. It is the petitioner's case that he purchased the goods, namely, papers on payment of sales tax. Further levy of tax on the personal service rendered to the client of the petitioner will amount to double taxation. It is also the contention of the petitioner that the paper which is used in the photography are incidental and insignificant.',
	(int) 11 => '<p>9. In support of its contention, learned Counsel for the petitioner has relied on several judgments. First reliance was place on the judgment of the Supreme Court in the case of Sales Tax Officer v. B.C. Kame reported in 39 STC 237(SC). At page 241 of the report, learned Judges of the Supreme Court held that a photographer takes the photograph and develops the negatives and does other photographic work and thereafter supplies the prints to his client. By doing so he cannot be said to enter into a contract for sale of goods. On the other hand, the contract is for use of skill and labour by the photographer to bring about the desired result. Learned Judges held that the job of a photographer is a contract for work and labour and it is not a contract of sale.',
	(int) 12 => '<p>10. Reliance was also placed on a judgment of this High Court in the case of Photo Emporium v. Addl. District Magistrate reported in 77 STC 199 in which this High Court followed the ratio of the judgment of the Supreme Court in the case of B.C. Kame. In that case, the stand of the Revenue was disapproved by the Orissa High Court.',
	(int) 13 => '<p>11. Similar view was taken in 110 STC 145 in the case of Foto Colour Labs Pvt. Ltd. v. Commercial Taxes Officer where the Tribunal held that the transfer of paper in the photograph is purely incidental and payment is only taken to give positive prints and not to get the photo papers. Therefore, the contract in between the petitioner and his client is not a contract of sale, and neither directly or indirectly works contract is involved in the supply of photo papers. Similar view was taken by the West Bengal Taxation Tribunal in the case of Studio Kamalalaya v. Commercial Tax Officer reported in 89 STC 307.',
	(int) 14 => '<p>12. In the case of Bavens v. Onion of India report in 97 STC 161, learned Judges held that when a photographer takes a photograph of his customer, he develops the negative and supplies positive prints in the desired size to the customer. In doing so the photographer uses his own camera and his own film. The negative belongs to the photographer and not to the customer. No basic goods are provided by the customer which are subjected to processing by the photographer so as to make the contract a works contract. There is no accretion to goods or property or the nucleus of a property which belongs to the customer. It is the skill of the photographer which is most important to get the desired result.',
	(int) 15 => '<p>13. Hon'ble Karnataka High Court followed the same principle in the case of Keshoram Surlndranath Photo-mag Pvt. Ltd. v. Assistant Commissioner of Commercial Taxes reported in 121 STC 175. In that judgment, learned Judges of the Karnataka High Court relied on the judgment of the Supreme Court in B.C. Kame's case and came to the conclusion that in the job of the photographer in supplying positive prints to his customer, no works contract is involved and photographs are not marketable or saleable commodity and as such no tax can be levied on it.',
	(int) 16 => '<p>14. Against the said judgment of the Karnataka High Court, the State of Karnataka High Court filed a S.L.P. before the Hon'ble Supreme Court bearing SLP Nos. 6136-6163 of 2000 and the Hon'ble Supreme Court dismissed the SLP on 20th April, 2000.',
	(int) 17 => '<p>15. In the case of Rainbow Colour Lab v. State of M.P. learned Judges of the Hon'ble Supreme Court reiterated its judgment in B.C. Kame's case and came to the following conclusion:',
	(int) 18 => '<p>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.',
	(int) 19 => '<p>Hon'ble Supreme Court in Bharat Sanchar Nigam Ltd. v. Union of India reported in 145 STC 91 again reiterated the principle in B.C. Kame's case and held that the work done by the photographer is only in the nature of a service contract not involving any sale of goods and held that the stand taken by the State cannot be sustained.',
	(int) 20 => '<p>16. Learned Counsel for the petitioner submitted that the photographs taken by the petitioner are not goods which can be sold and is not a marketable commodity like any other goods. When the copies of photographs are made out, they have no utility or value to any other person than the customer. It is already admitted that the papers utilized for photographs are tax paid goods. Therefore, it is contended by the learned Counsel for the petitioner that the work of photography does not come within the purview of works contract as defined in Section 2(jj) of the Orissa Sales Tax Act.',
	(int) 21 => '<p>17. Learned Counsel for the Revenue in this case virtually did not contest the submission made by the learned Counsel for the petitioner and in support of his contention, learned Counsel for the Revenue relied on a decision of the Supreme Court in the case of Imagic Creative Pvt. Ltd. v. Commissioner of Commercial Taxes and Ors. reported in (2008) 10 RC 236. In that judgment, learned Judges held that since the contract in question is a service contract, it is difficult to hold that in a case of this nature, sales tax would be payable on the value of the entire contract irrespective of the element of service provided.',
	(int) 22 => '<p>For the reasons discussed above, we answer the first question in the negative and the second question, in the affirmative. We thus answer both the questions in favour of the assessee and against the Revenue.',
	(int) 23 => '<p>The three revision applications are thus disposed of.',
	(int) 24 => '<p>No costs.',
	(int) 25 => '<p>B.N. Mahapatra, J.',
	(int) 26 => '<p>18. I agree.<p>',
	(int) 27 => '<p>'
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16. Learned Counsel for the petitioner submitted that the photographs taken by the petitioner are not goods which can be sold and is not a marketable commodity like any other goods. When the copies of photographs are made out, they have no utility or value to any other person than the customer. It is already admitted that the papers utilized for photographs are tax paid goods. Therefore, it is contended by the learned Counsel for the petitioner that the work of photography does not come within the purview of works contract as defined in Section 2(jj) of the Orissa Sales Tax Act.

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	'title_for_layout' => 'Studio Sujata Vs Commissioner of Sales Tax - Citation 531271 - Court Judgment | ',
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		'Judgement' => array(
			'id' => '531271',
			'acts' => '',
			'appealno' => '',
			'appellant' => 'Studio Sujata',
			'authreffered' => '',
			'casename' => 'Studio Sujata Vs. Commissioner of Sales Tax',
			'casenote' => 'Sales Tax - Assessment - Contract of Sale - Section 12 (5) of Orissa Sales Tax 1947 - Petitioner carries on business of processing and developing photography - Revenue assessed petitioner under Section 12(5) of Act on ground that activities of petitioner can be called works contract - Petitioner approached to Assistant of Sales Tax on ground that there is no contract of sale between the petitioner and the client, it is only service - Dismissed and affirmed by Tribunal - Hence present petition - Whether Tribunal is right to held that tax is exigible for photographs as execution of works contract or not? - Held, as per precedent laid down by Supreme Court in case of Sales Tax Officer v. B.C. Kame that photographer takes photograph and develops negatives and does other photographic work and thereafter supplies prints to his client - By doing so he cannot be said to enter into contract for sale of goods - Therefore, job of photographer is contract for work and labour and it is not contract of sale - Revenue committed mistake in assessing petitioner under Section 12(5) of Act on basis of contract of sale - Petition disposed of accordingly  - STATE FINANCIAL CORPORATIONS ACT, 1951 [63/1951]. Section 29; [P.K. Tripathy, A.K. Parichha & N.Prusty, JJ] Discharge of loan  Orissa Forest Act (14 of 1972), Section 56  Confiscation of vehicle - Held, The Authorities under Section 56 of the Orissa Forest Act, 1972 are not obliged to release the vehicle from the confiscation proceeding or to pay the sale proceeds of the vehicle after the order of confiscation in favour of Orissa State Financial Corporation when such vehicles were purchased on being financed by the Orissa State Financial Corporation and the loan had not been liquidated by the date of the seizure/confiscation of the vehicle. Concept of first charge or second charge has no applicability when the vehicle is not otherwise disposed of to determine the liabilities of the loanee. On the other hand the vehicle having been found indulged in forest offences was made subject matter of a confiscation proceedings, and therefore, the procedure followed for confiscation of the vehicle and for its sale is punitive in nature and not with a view to give benefit to anybody including the Department which initiated the confiscation proceeding. Apart from that, the claim of the Orissa State Financial Corporation as against its loanee (who had taken the vehicle on hire- purchase agreement) brings the loanee and the sureties within the default clause under the State Financial Corporation Act, 1951 or the heirs and successors of such persons. Procedure is provided in the Act, 1951 and the Rules thereof about the manner in which such loan is to be recovered, and in that context only the vehicle under the hire-purchase agreement is placed as the first charge. If such property is not available for any reason, then the loan is not automatically waived or the loanee and his sureties are not automatically redeemed of the liabilities to repay. The Financial Corporation is concerned with repayment of loan either from the property or persons offered as surety. Thus, a vehicle, which is subject matter of confiscation proceeding under the Act, 1872, being not available to the Orissa State Financial Corporation for adjustment of the unpaid loan, that does not at all bring out an anomalous situation so as to defeat the right of the Orissa State Financial Corporation. Agreement between the Orissa State Financial Corporation and the loanee is a pure and simple contract governed by the provisions of the Contract Act, 1872 read with the provisions in the Act, 1951 and its Rules. On the other hand, a confiscation proceeding under the Act, 1972 is punitive in nature for commission of a forest offence. Thus, by virtue of the provision in Section 56 read with Section 64 (2) of the Act, 1972, the action taken for confiscation of the vehicle cannot be extended to grant protection of the loan advanced by Orissa State Financial Corporation. By doing that it amounts to grant premium to the pick-pockets in as much as, by making payment of the confiscation amount in favour of the Orissa State Financial Corporation the loan burden of the accused of the forest offence is reduced to the extent of the sale proceeds of the vehicle. In other words, on payment of the sale proceeds of the confiscation proceeding to the Orissa State Financial Corporation towards discharge of the loan account of the accused of a forest offence, it would lead to a system to reward him by repayment of his loan. Then it does not become a penalty nor the action become punitive, but it remains as a reward to the accused of forest offence. Such a concept is totally not conceivable from any provision in the Act, 1972 or the Act, 1951. [AIR 2002 Orissa 130 Overruled]. -- STATE FINANCIAL CORPORATIONS ACT, 1951. 
Section 29; Discharge of loan  Orissa Forest Act (14 of 1972), Section 56  Confiscation of vehicle - Held, The Authorities under Section 56 of the Orissa Forest Act, 1972 are not obliged to release the vehicle from the confiscation proceeding or to pay the sale proceeds of the vehicle after the order of confiscation in favour of Orissa State Financial Corporation when such vehicles were purchased on being financed by the Orissa State Financial Corporation and the loan had not been liquidated by the date of the seizure/confiscation of the vehicle. Concept of first charge or second charge has no applicability when the vehicle is not otherwise disposed of to determine the liabilities of the loanee. On the other hand the vehicle having been found indulged in forest offences was made subject matter of a confiscation proceedings, and therefore, the procedure followed for confiscation of the vehicle and for its sale is punitive in nature and not with a view to give benefit to anybody including the Department which initiated the confiscation proceeding. Apart from that, the claim of the Orissa State Financial Corporation as against its loanee (who had taken the vehicle on hire- purchase agreement) brings the loanee and the sureties within the default clause under the State Financial Corporation Act, 1951 or the heirs and successors of such persons. Procedure is provided in the Act, 1951 and the Rules thereof about the manner in which such loan is to be recovered, and in that context only the vehicle under the hire-purchase agreement is placed as the first charge. If such property is not available for any reason, then the loan is not automatically waived or the loanee and his sureties are not automatically redeemed of the liabilities to repay. The Financial Corporation is concerned with repayment of loan either from the property or persons offered as surety. Thus, a vehicle, which is subject matter of confiscation proceeding under the Act, 1872, being not available to the Orissa State Financial Corporation for adjustment of the unpaid loan, that does not at all bring out an anomalous situation so as to defeat the right of the Orissa State Financial Corporation. Agreement between the Orissa State Financial Corporation and the loanee is a pure and simple contract governed by the provisions of the Contract Act, 1872 read with the provisions in the Act, 1951 and its Rules. On the other hand, a confiscation proceeding under the Act, 1972 is punitive in nature for commission of a forest offence. Thus, by virtue of the provision in Section 56 read with Section 64 (2) of the Act, 1972, the action taken for confiscation of the vehicle cannot be extended to grant protection of the loan advanced by Orissa State Financial Corporation. By doing that it amounts to grant premium to the pick-pockets in as much as, by making payment of the confiscation amount in favour of the Orissa State Financial Corporation the loan burden of the accused of the forest offence is reduced to the extent of the sale proceeds of the vehicle. In other words, on payment of the sale proceeds of the confiscation proceeding to the Orissa State Financial Corporation towards discharge of the loan account of the accused of a forest offence, it would lead to a system to reward him by repayment of his loan. Then it does not become a penalty nor the action become punitive, but it remains as a reward to the accused of forest offence. Such a concept is totally not conceivable from any provision in the Act, 1972 or the Act, 1951. [AIR 2002 Orissa 130 Overruled].  -  In that case, the stand of the Revenue was disapproved by the Orissa High Court. 16. Learned Counsel for the petitioner submitted that the photographs taken by the petitioner are not goods which can be sold and is not a marketable commodity like any other goods.',
			'caseanalysis' => null,
			'casesref' => 'Imagic Creative Pvt. Ltd. v. Commissioner of Commercial Taxes and Ors.;',
			'citingcases' => '',
			'counselplain' => '',
			'counseldef' => '',
			'court' => 'Orissa',
			'court_type' => 'HC',
			'decidedon' => '2008-04-02',
			'deposition' => '',
			'favorof' => null,
			'findings' => null,
			'judge' => ' A.K. Ganguly, C.J. and; B.N. Mahapatra, J.',
			'judgement' => '<p style="text-align: justify;">A.K. Ganguly, C.J.</p><p style="text-align: justify;">1. Initially three S.J.Cs. being S.J.C. Nos. 10 of 1997, 8 of 1997 and 9 of 1997 were filed and subsequently renumbered as STREV Nos. 212, 214 and 216 of 2007 respectively. In view of the common questions of facts and law, all the three Revision Applications are heard and disposed of together.</p><p style="text-align: justify;">2. The following questions of law arising out of the order passed by the Orissa Sales Tax Tribunal on 8.12.1993 in Second Appeal Nos. 3345 to 3350 of 1991-92 have been referred to this Hon'ble High Court in terms of the order of this Hon'ble Court dated 24.2.1997. The questions are:</p><p style="text-align: justify;">(i) Whether on the facts and in the circumstances of the case, the Tribunal is right to held that tax is exigible for photographs as execution of works contract ?</p><p style="text-align: justify;">(ii) Whether on the facts and in the circumstances of the case, the conclusion of the Tribunal is perverse due to non-consideration and mis-consideration of facts and law and, therefore, it is liable to be set aside for re-hearing ?</p><p style="text-align: justify;">3. The materials facts out of which those questions arise are that the petitioner carries on the business of processing and developing photography. In the usual course of business, the petitioner takes photographs of persons or of family and then develops the negative by employing his skill and labour and then supplies the photographs to the clients. These photographs which are prepared by the petitioner are not commercial items because they are neither purchased nor sold. However, to develop these photographs employment of skill and labour is essential. It may be mentioned that petitioner does not carry on any sale of photographs of national leaders, God and Goddess.</p><p style="text-align: justify;">4. After the passing of 46th amendment of the Constitution of India and consequent amendments thereto in Orissa Sales Tax Act (OST Act), the Sales Tax Officer, Bhubaneswar-II Circle, Bhubaneswar sent notices to assess the petitioner as an unregistered dealer under Section 12 (5) of the OST Act, inter alia, contending that the petitioner's activities can be called 'works contract'. Pursuant to said notice, the petitioner gave its reply and appeared before the Sales Tax Officer and produced the books of account and documents including Receipts, Purchase Memos, Vouchers, Ledger and thereby denied its liability under the OST Act. The petitioner also submitted objection petitions on various dates i.e. 28.12.1985, 10.1.1986, 20.2.1986 and 29.2.1988 contending, inter alia, that the petitioner has no sales tax liability under OST Act and the notices, which were issued, are without jurisdiction.</p><p style="text-align: justify;">5. Ignoring the said objections of the petitioner, the Sales Tax Officer, Bhubaneswar-II Circle, Bhubaneswar assessed the petitioner as an unregistered dealer, inter alia, holding that the petitioner is liable to pay sales tax as petitioner has been alleged to carry activities of 'works contract'. Therefore, orders of assessment being dated 29.2.1988 for the years 1984-85 (9/84 to 3/85), 1985-86 and 1986- 87 under Section 12(5) of OST Act and under Rule 5 of the Orissa Additional Sales Tax Rules, 1975 were passed and a tax of Rs. 20,765.00 and penalty of Rs. 5,000.00 totalling to Rs. 25,765.00 was imposed on the petitioner. The petitioner then filed the First Appeal before the learned Assistant Commissioner of Sales Tax. The First Appellate Authority by an order dated 27.9.1991 confirmed the levy of tax under the OST Act, but reduced the penalty to Rs. 1250.00. Thereupon, the petitioner filed the Second Appeal before the Orissa Sales Tax Tribunal, Cuttack. The said Tribunal heard the Second Appeal and in course of hearing, the petitioner raised various contentions. Ultimately, the Tribunal upheld the levy of tax but deleted the penalty.</p><p style="text-align: justify;">6. Thereafter the petitioner came up with a reference application under Section 24(1) of the Orissa Sales Tax Act framing certain questions for being referred to the Hon'ble High Court. The said prayer of the petitioner was rejected by the Tribunal. Then the petitioner moved Hon'ble High Court under Section 24(2)(b) of the Orissa Sales Tax Act, 1947 whereupon the High Court directed the Tribunal to state to case and refer the questions under Section 24(3) of the OST Act for a decision of the High Court.</p><p style="text-align: justify;">7. Accordingly, the Tribunal stated the case and referred the aforesaid questions for a decision of the High Court.</p><p style="text-align: justify;">8. Learned Counsel for the petitioner before the High Court submitted that in the transaction in question, there is no contract of sale between the petitioner and the client. It is only a contract of service and the photographs, which the petitioner produced by supplying the same has no commercial value and are not marketable. So, there is no question of a works contract. It is the consistent stand of the petitioner that the present photographs which are produced by the petitioner have no utility or value to any other person than the customer. By developing such photographs, the petitioner only renders service to his customers. The customer pays for the service rendered by the petitioner. It is the contention of the petitioner that his activity is similar to that of consulting firm preparing plan and sketches pursuant to client's specification or professional giving opinion on papers. All those activities are done to serve the client. Therefore, this does not come within the purview of the definition of 'goods', 'sale', 'dealer' or 'works contract'. It is the petitioner's case that he purchased the goods, namely, papers on payment of sales tax. Further levy of tax on the personal service rendered to the client of the petitioner will amount to double taxation. It is also the contention of the petitioner that the paper which is used in the photography are incidental and insignificant.</p><p style="text-align: justify;">9. In support of its contention, learned Counsel for the petitioner has relied on several judgments. First reliance was place on the judgment of the Supreme Court in the case of Sales Tax Officer v. B.C. Kame reported in 39 STC 237(SC). At page 241 of the report, learned Judges of the Supreme Court held that a photographer takes the photograph and develops the negatives and does other photographic work and thereafter supplies the prints to his client. By doing so he cannot be said to enter into a contract for sale of goods. On the other hand, the contract is for use of skill and labour by the photographer to bring about the desired result. Learned Judges held that the job of a photographer is a contract for work and labour and it is not a contract of sale.</p><p style="text-align: justify;">10. Reliance was also placed on a judgment of this High Court in the case of Photo Emporium v. Addl. District Magistrate reported in 77 STC 199 in which this High Court followed the ratio of the judgment of the Supreme Court in the case of B.C. Kame. In that case, the stand of the Revenue was disapproved by the Orissa High Court.</p><p style="text-align: justify;">11. Similar view was taken in 110 STC 145 in the case of Foto Colour Labs Pvt. Ltd. v. Commercial Taxes Officer where the Tribunal held that the transfer of paper in the photograph is purely incidental and payment is only taken to give positive prints and not to get the photo papers. Therefore, the contract in between the petitioner and his client is not a contract of sale, and neither directly or indirectly works contract is involved in the supply of photo papers. Similar view was taken by the West Bengal Taxation Tribunal in the case of Studio Kamalalaya v. Commercial Tax Officer reported in 89 STC 307.</p><p style="text-align: justify;">12. In the case of Bavens v. Onion of India report in 97 STC 161, learned Judges held that when a photographer takes a photograph of his customer, he develops the negative and supplies positive prints in the desired size to the customer. In doing so the photographer uses his own camera and his own film. The negative belongs to the photographer and not to the customer. No basic goods are provided by the customer which are subjected to processing by the photographer so as to make the contract a works contract. There is no accretion to goods or property or the nucleus of a property which belongs to the customer. It is the skill of the photographer which is most important to get the desired result.</p><p style="text-align: justify;">13. Hon'ble Karnataka High Court followed the same principle in the case of Keshoram Surlndranath Photo-mag Pvt. Ltd. v. Assistant Commissioner of Commercial Taxes reported in 121 STC 175. In that judgment, learned Judges of the Karnataka High Court relied on the judgment of the Supreme Court in B.C. Kame's case and came to the conclusion that in the job of the photographer in supplying positive prints to his customer, no works contract is involved and photographs are not marketable or saleable commodity and as such no tax can be levied on it.</p><p style="text-align: justify;">14. Against the said judgment of the Karnataka High Court, the State of Karnataka High Court filed a S.L.P. before the Hon'ble Supreme Court bearing SLP Nos. 6136-6163 of 2000 and the Hon'ble Supreme Court dismissed the SLP on 20th April, 2000.</p><p style="text-align: justify;">15. In the case of Rainbow Colour Lab v. State of M.P. learned Judges of the Hon'ble Supreme Court reiterated its judgment in B.C. Kame's case and came to the following conclusion:</p><p style="text-align: justify;">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.</p><p style="text-align: justify;">Hon'ble Supreme Court in Bharat Sanchar Nigam Ltd. v. Union of India reported in 145 STC 91 again reiterated the principle in B.C. Kame's case and held that the work done by the photographer is only in the nature of a service contract not involving any sale of goods and held that the stand taken by the State cannot be sustained.</p><p style="text-align: justify;">16. Learned Counsel for the petitioner submitted that the photographs taken by the petitioner are not goods which can be sold and is not a marketable commodity like any other goods. When the copies of photographs are made out, they have no utility or value to any other person than the customer. It is already admitted that the papers utilized for photographs are tax paid goods. Therefore, it is contended by the learned Counsel for the petitioner that the work of photography does not come within the purview of works contract as defined in Section 2(jj) of the Orissa Sales Tax Act.</p><p style="text-align: justify;">17. Learned Counsel for the Revenue in this case virtually did not contest the submission made by the learned Counsel for the petitioner and in support of his contention, learned Counsel for the Revenue relied on a decision of the Supreme Court in the case of Imagic Creative Pvt. Ltd. v. Commissioner of Commercial Taxes and Ors. reported in (2008) 10 RC 236. In that judgment, learned Judges held that since the contract in question is a service contract, it is difficult to hold that in a case of this nature, sales tax would be payable on the value of the entire contract irrespective of the element of service provided.</p><p style="text-align: justify;">For the reasons discussed above, we answer the first question in the negative and the second question, in the affirmative. We thus answer both the questions in favour of the assessee and against the Revenue.</p><p style="text-align: justify;">The three revision applications are thus disposed of.</p><p style="text-align: justify;">No costs.</p><p style="text-align: justify;">B.N. Mahapatra, J.</p><p style="text-align: justify;">18. I agree.<p style="text-align: justify;"></p><p style="text-align: justify;">',
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			'pubs' => '106(2008)CLT317; 2008(I)OLR953; (2008)17VST289(Orissa)',
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			'respondent' => 'Commissioner of Sales Tax',
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		'casename' => 'Studio Sujata Vs. Commissioner of Sales Tax',
		'casenote' => 'Sales Tax - Assessment - Contract of Sale - Section 12 (5) of Orissa Sales Tax 1947 - Petitioner carries on business of processing and developing photography - Revenue assessed petitioner under Section 12(5) of Act on ground that activities of petitioner can be called works contract - Petitioner approached to Assistant of Sales Tax on ground that there is no contract of sale between the petitioner and the client, it is only service - Dismissed and affirmed by Tribunal - Hence present petition - Whether Tribunal is right to held that tax is exigible for photographs as execution of works contract or not? - Held, as per precedent laid down by Supreme Court in case of Sales Tax Officer v. B.C. Kame that photographer takes photograph and develops negatives and does other photographic work and thereafter supplies prints to his client - By doing so he cannot be said to enter into contract for sale of goods - Therefore, job of photographer is contract for work and labour and it is not contract of sale - Revenue committed mistake in assessing petitioner under Section 12(5) of Act on basis of contract of sale - Petition disposed of accordingly  - STATE FINANCIAL CORPORATIONS ACT, 1951 [63/1951]. Section 29; [P.K. Tripathy, A.K. Parichha & N.Prusty, JJ] Discharge of loan  Orissa Forest Act (14 of 1972), Section 56  Confiscation of vehicle - Held, The Authorities under Section 56 of the Orissa Forest Act, 1972 are not obliged to release the vehicle from the confiscation proceeding or to pay the sale proceeds of the vehicle after the order of confiscation in favour of Orissa State Financial Corporation when such vehicles were purchased on being financed by the Orissa State Financial Corporation and the loan had not been liquidated by the date of the seizure/confiscation of the vehicle. Concept of first charge or second charge has no applicability when the vehicle is not otherwise disposed of to determine the liabilities of the loanee. On the other hand the vehicle having been found indulged in forest offences was made subject matter of a confiscation proceedings, and therefore, the procedure followed for confiscation of the vehicle and for its sale is punitive in nature and not with a view to give benefit to anybody including the Department which initiated the confiscation proceeding. Apart from that, the claim of the Orissa State Financial Corporation as against its loanee (who had taken the vehicle on hire- purchase agreement) brings the loanee and the sureties within the default clause under the State Financial Corporation Act, 1951 or the heirs and successors of such persons. Procedure is provided in the Act, 1951 and the Rules thereof about the manner in which such loan is to be recovered, and in that context only the vehicle under the hire-purchase agreement is placed as the first charge. If such property is not available for any reason, then the loan is not automatically waived or the loanee and his sureties are not automatically redeemed of the liabilities to repay. The Financial Corporation is concerned with repayment of loan either from the property or persons offered as surety. Thus, a vehicle, which is subject matter of confiscation proceeding under the Act, 1872, being not available to the Orissa State Financial Corporation for adjustment of the unpaid loan, that does not at all bring out an anomalous situation so as to defeat the right of the Orissa State Financial Corporation. Agreement between the Orissa State Financial Corporation and the loanee is a pure and simple contract governed by the provisions of the Contract Act, 1872 read with the provisions in the Act, 1951 and its Rules. On the other hand, a confiscation proceeding under the Act, 1972 is punitive in nature for commission of a forest offence. Thus, by virtue of the provision in Section 56 read with Section 64 (2) of the Act, 1972, the action taken for confiscation of the vehicle cannot be extended to grant protection of the loan advanced by Orissa State Financial Corporation. By doing that it amounts to grant premium to the pick-pockets in as much as, by making payment of the confiscation amount in favour of the Orissa State Financial Corporation the loan burden of the accused of the forest offence is reduced to the extent of the sale proceeds of the vehicle. In other words, on payment of the sale proceeds of the confiscation proceeding to the Orissa State Financial Corporation towards discharge of the loan account of the accused of a forest offence, it would lead to a system to reward him by repayment of his loan. Then it does not become a penalty nor the action become punitive, but it remains as a reward to the accused of forest offence. Such a concept is totally not conceivable from any provision in the Act, 1972 or the Act, 1951. [AIR 2002 Orissa 130 Overruled]. -- STATE FINANCIAL CORPORATIONS ACT, 1951. 
Section 29; Discharge of loan  Orissa Forest Act (14 of 1972), Section 56  Confiscation of vehicle - Held, The Authorities under Section 56 of the Orissa Forest Act, 1972 are not obliged to release the vehicle from the confiscation proceeding or to pay the sale proceeds of the vehicle after the order of confiscation in favour of Orissa State Financial Corporation when such vehicles were purchased on being financed by the Orissa State Financial Corporation and the loan had not been liquidated by the date of the seizure/confiscation of the vehicle. Concept of first charge or second charge has no applicability when the vehicle is not otherwise disposed of to determine the liabilities of the loanee. On the other hand the vehicle having been found indulged in forest offences was made subject matter of a confiscation proceedings, and therefore, the procedure followed for confiscation of the vehicle and for its sale is punitive in nature and not with a view to give benefit to anybody including the Department which initiated the confiscation proceeding. Apart from that, the claim of the Orissa State Financial Corporation as against its loanee (who had taken the vehicle on hire- purchase agreement) brings the loanee and the sureties within the default clause under the State Financial Corporation Act, 1951 or the heirs and successors of such persons. Procedure is provided in the Act, 1951 and the Rules thereof about the manner in which such loan is to be recovered, and in that context only the vehicle under the hire-purchase agreement is placed as the first charge. If such property is not available for any reason, then the loan is not automatically waived or the loanee and his sureties are not automatically redeemed of the liabilities to repay. The Financial Corporation is concerned with repayment of loan either from the property or persons offered as surety. Thus, a vehicle, which is subject matter of confiscation proceeding under the Act, 1872, being not available to the Orissa State Financial Corporation for adjustment of the unpaid loan, that does not at all bring out an anomalous situation so as to defeat the right of the Orissa State Financial Corporation. Agreement between the Orissa State Financial Corporation and the loanee is a pure and simple contract governed by the provisions of the Contract Act, 1872 read with the provisions in the Act, 1951 and its Rules. On the other hand, a confiscation proceeding under the Act, 1972 is punitive in nature for commission of a forest offence. Thus, by virtue of the provision in Section 56 read with Section 64 (2) of the Act, 1972, the action taken for confiscation of the vehicle cannot be extended to grant protection of the loan advanced by Orissa State Financial Corporation. By doing that it amounts to grant premium to the pick-pockets in as much as, by making payment of the confiscation amount in favour of the Orissa State Financial Corporation the loan burden of the accused of the forest offence is reduced to the extent of the sale proceeds of the vehicle. In other words, on payment of the sale proceeds of the confiscation proceeding to the Orissa State Financial Corporation towards discharge of the loan account of the accused of a forest offence, it would lead to a system to reward him by repayment of his loan. Then it does not become a penalty nor the action become punitive, but it remains as a reward to the accused of forest offence. Such a concept is totally not conceivable from any provision in the Act, 1972 or the Act, 1951. [AIR 2002 Orissa 130 Overruled].  -  In that case, the stand of the Revenue was disapproved by the Orissa High Court. 16. Learned Counsel for the petitioner submitted that the photographs taken by the petitioner are not goods which can be sold and is not a marketable commodity like any other goods.',
		'caseanalysis' => null,
		'casesref' => 'Imagic Creative Pvt. Ltd. v. Commissioner of Commercial Taxes and Ors.;',
		'citingcases' => '',
		'counselplain' => '',
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		'court' => 'Orissa',
		'court_type' => 'HC',
		'decidedon' => '2008-04-02',
		'deposition' => '',
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		'judge' => ' A.K. Ganguly, C.J. and; B.N. Mahapatra, J.',
		'judgement' => '<p>A.K. Ganguly, C.J.</p><p>1. Initially three S.J.Cs. being S.J.C. Nos. 10 of 1997, 8 of 1997 and 9 of 1997 were filed and subsequently renumbered as STREV Nos. 212, 214 and 216 of 2007 respectively. In view of the common questions of facts and law, all the three Revision Applications are heard and disposed of together.</p><p>2. The following questions of law arising out of the order passed by the Orissa Sales Tax Tribunal on 8.12.1993 in Second Appeal Nos. 3345 to 3350 of 1991-92 have been referred to this Hon'ble High Court in terms of the order of this Hon'ble Court dated 24.2.1997. The questions are:</p><p>(i) Whether on the facts and in the circumstances of the case, the Tribunal is right to held that tax is exigible for photographs as execution of works contract ?</p><p>(ii) Whether on the facts and in the circumstances of the case, the conclusion of the Tribunal is perverse due to non-consideration and mis-consideration of facts and law and, therefore, it is liable to be set aside for re-hearing ?</p><p>3. The materials facts out of which those questions arise are that the petitioner carries on the business of processing and developing photography. In the usual course of business, the petitioner takes photographs of persons or of family and then develops the negative by employing his skill and labour and then supplies the photographs to the clients. These photographs which are prepared by the petitioner are not commercial items because they are neither purchased nor sold. However, to develop these photographs employment of skill and labour is essential. It may be mentioned that petitioner does not carry on any sale of photographs of national leaders, God and Goddess.</p><p>4. After the passing of 46th amendment of the Constitution of India and consequent amendments thereto in Orissa Sales Tax Act (OST Act), the Sales Tax Officer, Bhubaneswar-II Circle, Bhubaneswar sent notices to assess the petitioner as an unregistered dealer under Section 12 (5) of the OST Act, inter alia, contending that the petitioner's activities can be called 'works contract'. Pursuant to said notice, the petitioner gave its reply and appeared before the Sales Tax Officer and produced the books of account and documents including Receipts, Purchase Memos, Vouchers, Ledger and thereby denied its liability under the OST Act. The petitioner also submitted objection petitions on various dates i.e. 28.12.1985, 10.1.1986, 20.2.1986 and 29.2.1988 contending, inter alia, that the petitioner has no sales tax liability under OST Act and the notices, which were issued, are without jurisdiction.</p><p>5. Ignoring the said objections of the petitioner, the Sales Tax Officer, Bhubaneswar-II Circle, Bhubaneswar assessed the petitioner as an unregistered dealer, inter alia, holding that the petitioner is liable to pay sales tax as petitioner has been alleged to carry activities of 'works contract'. Therefore, orders of assessment being dated 29.2.1988 for the years 1984-85 (9/84 to 3/85), 1985-86 and 1986- 87 under Section 12(5) of OST Act and under Rule 5 of the Orissa Additional Sales Tax Rules, 1975 were passed and a tax of Rs. 20,765.00 and penalty of Rs. 5,000.00 totalling to Rs. 25,765.00 was imposed on the petitioner. The petitioner then filed the First Appeal before the learned Assistant Commissioner of Sales Tax. The First Appellate Authority by an order dated 27.9.1991 confirmed the levy of tax under the OST Act, but reduced the penalty to Rs. 1250.00. Thereupon, the petitioner filed the Second Appeal before the Orissa Sales Tax Tribunal, Cuttack. The said Tribunal heard the Second Appeal and in course of hearing, the petitioner raised various contentions. Ultimately, the Tribunal upheld the levy of tax but deleted the penalty.</p><p>6. Thereafter the petitioner came up with a reference application under Section 24(1) of the Orissa Sales Tax Act framing certain questions for being referred to the Hon'ble High Court. The said prayer of the petitioner was rejected by the Tribunal. Then the petitioner moved Hon'ble High Court under Section 24(2)(b) of the Orissa Sales Tax Act, 1947 whereupon the High Court directed the Tribunal to state to case and refer the questions under Section 24(3) of the OST Act for a decision of the High Court.</p><p>7. Accordingly, the Tribunal stated the case and referred the aforesaid questions for a decision of the High Court.</p><p>8. Learned Counsel for the petitioner before the High Court submitted that in the transaction in question, there is no contract of sale between the petitioner and the client. It is only a contract of service and the photographs, which the petitioner produced by supplying the same has no commercial value and are not marketable. So, there is no question of a works contract. It is the consistent stand of the petitioner that the present photographs which are produced by the petitioner have no utility or value to any other person than the customer. By developing such photographs, the petitioner only renders service to his customers. The customer pays for the service rendered by the petitioner. It is the contention of the petitioner that his activity is similar to that of consulting firm preparing plan and sketches pursuant to client's specification or professional giving opinion on papers. All those activities are done to serve the client. Therefore, this does not come within the purview of the definition of 'goods', 'sale', 'dealer' or 'works contract'. It is the petitioner's case that he purchased the goods, namely, papers on payment of sales tax. Further levy of tax on the personal service rendered to the client of the petitioner will amount to double taxation. It is also the contention of the petitioner that the paper which is used in the photography are incidental and insignificant.</p><p>9. In support of its contention, learned Counsel for the petitioner has relied on several judgments. First reliance was place on the judgment of the Supreme Court in the case of Sales Tax Officer v. B.C. Kame reported in 39 STC 237(SC). At page 241 of the report, learned Judges of the Supreme Court held that a photographer takes the photograph and develops the negatives and does other photographic work and thereafter supplies the prints to his client. By doing so he cannot be said to enter into a contract for sale of goods. On the other hand, the contract is for use of skill and labour by the photographer to bring about the desired result. Learned Judges held that the job of a photographer is a contract for work and labour and it is not a contract of sale.</p><p>10. Reliance was also placed on a judgment of this High Court in the case of Photo Emporium v. Addl. District Magistrate reported in 77 STC 199 in which this High Court followed the ratio of the judgment of the Supreme Court in the case of B.C. Kame. In that case, the stand of the Revenue was disapproved by the Orissa High Court.</p><p>11. Similar view was taken in 110 STC 145 in the case of Foto Colour Labs Pvt. Ltd. v. Commercial Taxes Officer where the Tribunal held that the transfer of paper in the photograph is purely incidental and payment is only taken to give positive prints and not to get the photo papers. Therefore, the contract in between the petitioner and his client is not a contract of sale, and neither directly or indirectly works contract is involved in the supply of photo papers. Similar view was taken by the West Bengal Taxation Tribunal in the case of Studio Kamalalaya v. Commercial Tax Officer reported in 89 STC 307.</p><p>12. In the case of Bavens v. Onion of India report in 97 STC 161, learned Judges held that when a photographer takes a photograph of his customer, he develops the negative and supplies positive prints in the desired size to the customer. In doing so the photographer uses his own camera and his own film. The negative belongs to the photographer and not to the customer. No basic goods are provided by the customer which are subjected to processing by the photographer so as to make the contract a works contract. There is no accretion to goods or property or the nucleus of a property which belongs to the customer. It is the skill of the photographer which is most important to get the desired result.</p><p>13. Hon'ble Karnataka High Court followed the same principle in the case of Keshoram Surlndranath Photo-mag Pvt. Ltd. v. Assistant Commissioner of Commercial Taxes reported in 121 STC 175. In that judgment, learned Judges of the Karnataka High Court relied on the judgment of the Supreme Court in B.C. Kame's case and came to the conclusion that in the job of the photographer in supplying positive prints to his customer, no works contract is involved and photographs are not marketable or saleable commodity and as such no tax can be levied on it.</p><p>14. Against the said judgment of the Karnataka High Court, the State of Karnataka High Court filed a S.L.P. before the Hon'ble Supreme Court bearing SLP Nos. 6136-6163 of 2000 and the Hon'ble Supreme Court dismissed the SLP on 20th April, 2000.</p><p>15. In the case of Rainbow Colour Lab v. State of M.P. learned Judges of the Hon'ble Supreme Court reiterated its judgment in B.C. Kame's case and came to the following conclusion:</p><p>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.</p><p>Hon'ble Supreme Court in Bharat Sanchar Nigam Ltd. v. Union of India reported in 145 STC 91 again reiterated the principle in B.C. Kame's case and held that the work done by the photographer is only in the nature of a service contract not involving any sale of goods and held that the stand taken by the State cannot be sustained.</p><p>16. Learned Counsel for the petitioner submitted that the photographs taken by the petitioner are not goods which can be sold and is not a marketable commodity like any other goods. When the copies of photographs are made out, they have no utility or value to any other person than the customer. It is already admitted that the papers utilized for photographs are tax paid goods. Therefore, it is contended by the learned Counsel for the petitioner that the work of photography does not come within the purview of works contract as defined in Section 2(jj) of the Orissa Sales Tax Act.</p><p>17. Learned Counsel for the Revenue in this case virtually did not contest the submission made by the learned Counsel for the petitioner and in support of his contention, learned Counsel for the Revenue relied on a decision of the Supreme Court in the case of Imagic Creative Pvt. Ltd. v. Commissioner of Commercial Taxes and Ors. reported in (2008) 10 RC 236. In that judgment, learned Judges held that since the contract in question is a service contract, it is difficult to hold that in a case of this nature, sales tax would be payable on the value of the entire contract irrespective of the element of service provided.</p><p>For the reasons discussed above, we answer the first question in the negative and the second question, in the affirmative. We thus answer both the questions in favour of the assessee and against the Revenue.</p><p>The three revision applications are thus disposed of.</p><p>No costs.</p><p>B.N. Mahapatra, J.</p><p>18. I agree.<p></p><p>',
		'observations' => null,
		'overruledby' => null,
		'prhistory' => '',
		'pubs' => '106(2008)CLT317; 2008(I)OLR953; (2008)17VST289(Orissa)',
		'ratiodecidendi' => '',
		'respondent' => 'Commissioner of Sales Tax',
		'sub' => 'Sales Tax/VAT',
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		'circuit' => null
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	(int) 1 => 'studio-sujata-vs-commissioner-sales-tax'
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$ctype = ' High Court'
$caseref = 'Imagic Creative Pvt. Ltd. v. Commissioner of Commercial Taxes and Ors.<br>'
$content = array(
	(int) 0 => '<p>A.K. Ganguly, C.J.',
	(int) 1 => '<p>1. Initially three S.J.Cs. being S.J.C. Nos. 10 of 1997, 8 of 1997 and 9 of 1997 were filed and subsequently renumbered as STREV Nos. 212, 214 and 216 of 2007 respectively. In view of the common questions of facts and law, all the three Revision Applications are heard and disposed of together.',
	(int) 2 => '<p>2. The following questions of law arising out of the order passed by the Orissa Sales Tax Tribunal on 8.12.1993 in Second Appeal Nos. 3345 to 3350 of 1991-92 have been referred to this Hon'ble High Court in terms of the order of this Hon'ble Court dated 24.2.1997. The questions are:',
	(int) 3 => '<p>(i) Whether on the facts and in the circumstances of the case, the Tribunal is right to held that tax is exigible for photographs as execution of works contract ?',
	(int) 4 => '<p>(ii) Whether on the facts and in the circumstances of the case, the conclusion of the Tribunal is perverse due to non-consideration and mis-consideration of facts and law and, therefore, it is liable to be set aside for re-hearing ?',
	(int) 5 => '<p>3. The materials facts out of which those questions arise are that the petitioner carries on the business of processing and developing photography. In the usual course of business, the petitioner takes photographs of persons or of family and then develops the negative by employing his skill and labour and then supplies the photographs to the clients. These photographs which are prepared by the petitioner are not commercial items because they are neither purchased nor sold. However, to develop these photographs employment of skill and labour is essential. It may be mentioned that petitioner does not carry on any sale of photographs of national leaders, God and Goddess.',
	(int) 6 => '<p>4. After the passing of 46th amendment of the Constitution of India and consequent amendments thereto in Orissa Sales Tax Act (OST Act), the Sales Tax Officer, Bhubaneswar-II Circle, Bhubaneswar sent notices to assess the petitioner as an unregistered dealer under Section 12 (5) of the OST Act, inter alia, contending that the petitioner's activities can be called 'works contract'. Pursuant to said notice, the petitioner gave its reply and appeared before the Sales Tax Officer and produced the books of account and documents including Receipts, Purchase Memos, Vouchers, Ledger and thereby denied its liability under the OST Act. The petitioner also submitted objection petitions on various dates i.e. 28.12.1985, 10.1.1986, 20.2.1986 and 29.2.1988 contending, inter alia, that the petitioner has no sales tax liability under OST Act and the notices, which were issued, are without jurisdiction.',
	(int) 7 => '<p>5. Ignoring the said objections of the petitioner, the Sales Tax Officer, Bhubaneswar-II Circle, Bhubaneswar assessed the petitioner as an unregistered dealer, inter alia, holding that the petitioner is liable to pay sales tax as petitioner has been alleged to carry activities of 'works contract'. Therefore, orders of assessment being dated 29.2.1988 for the years 1984-85 (9/84 to 3/85), 1985-86 and 1986- 87 under Section 12(5) of OST Act and under Rule 5 of the Orissa Additional Sales Tax Rules, 1975 were passed and a tax of Rs. 20,765.00 and penalty of Rs. 5,000.00 totalling to Rs. 25,765.00 was imposed on the petitioner. The petitioner then filed the First Appeal before the learned Assistant Commissioner of Sales Tax. The First Appellate Authority by an order dated 27.9.1991 confirmed the levy of tax under the OST Act, but reduced the penalty to Rs. 1250.00. Thereupon, the petitioner filed the Second Appeal before the Orissa Sales Tax Tribunal, Cuttack. The said Tribunal heard the Second Appeal and in course of hearing, the petitioner raised various contentions. Ultimately, the Tribunal upheld the levy of tax but deleted the penalty.',
	(int) 8 => '<p>6. Thereafter the petitioner came up with a reference application under Section 24(1) of the Orissa Sales Tax Act framing certain questions for being referred to the Hon'ble High Court. The said prayer of the petitioner was rejected by the Tribunal. Then the petitioner moved Hon'ble High Court under Section 24(2)(b) of the Orissa Sales Tax Act, 1947 whereupon the High Court directed the Tribunal to state to case and refer the questions under Section 24(3) of the OST Act for a decision of the High Court.',
	(int) 9 => '<p>7. Accordingly, the Tribunal stated the case and referred the aforesaid questions for a decision of the High Court.',
	(int) 10 => '<p>8. Learned Counsel for the petitioner before the High Court submitted that in the transaction in question, there is no contract of sale between the petitioner and the client. It is only a contract of service and the photographs, which the petitioner produced by supplying the same has no commercial value and are not marketable. So, there is no question of a works contract. It is the consistent stand of the petitioner that the present photographs which are produced by the petitioner have no utility or value to any other person than the customer. By developing such photographs, the petitioner only renders service to his customers. The customer pays for the service rendered by the petitioner. It is the contention of the petitioner that his activity is similar to that of consulting firm preparing plan and sketches pursuant to client's specification or professional giving opinion on papers. All those activities are done to serve the client. Therefore, this does not come within the purview of the definition of 'goods', 'sale', 'dealer' or 'works contract'. It is the petitioner's case that he purchased the goods, namely, papers on payment of sales tax. Further levy of tax on the personal service rendered to the client of the petitioner will amount to double taxation. It is also the contention of the petitioner that the paper which is used in the photography are incidental and insignificant.',
	(int) 11 => '<p>9. In support of its contention, learned Counsel for the petitioner has relied on several judgments. First reliance was place on the judgment of the Supreme Court in the case of Sales Tax Officer v. B.C. Kame reported in 39 STC 237(SC). At page 241 of the report, learned Judges of the Supreme Court held that a photographer takes the photograph and develops the negatives and does other photographic work and thereafter supplies the prints to his client. By doing so he cannot be said to enter into a contract for sale of goods. On the other hand, the contract is for use of skill and labour by the photographer to bring about the desired result. Learned Judges held that the job of a photographer is a contract for work and labour and it is not a contract of sale.',
	(int) 12 => '<p>10. Reliance was also placed on a judgment of this High Court in the case of Photo Emporium v. Addl. District Magistrate reported in 77 STC 199 in which this High Court followed the ratio of the judgment of the Supreme Court in the case of B.C. Kame. In that case, the stand of the Revenue was disapproved by the Orissa High Court.',
	(int) 13 => '<p>11. Similar view was taken in 110 STC 145 in the case of Foto Colour Labs Pvt. Ltd. v. Commercial Taxes Officer where the Tribunal held that the transfer of paper in the photograph is purely incidental and payment is only taken to give positive prints and not to get the photo papers. Therefore, the contract in between the petitioner and his client is not a contract of sale, and neither directly or indirectly works contract is involved in the supply of photo papers. Similar view was taken by the West Bengal Taxation Tribunal in the case of Studio Kamalalaya v. Commercial Tax Officer reported in 89 STC 307.',
	(int) 14 => '<p>12. In the case of Bavens v. Onion of India report in 97 STC 161, learned Judges held that when a photographer takes a photograph of his customer, he develops the negative and supplies positive prints in the desired size to the customer. In doing so the photographer uses his own camera and his own film. The negative belongs to the photographer and not to the customer. No basic goods are provided by the customer which are subjected to processing by the photographer so as to make the contract a works contract. There is no accretion to goods or property or the nucleus of a property which belongs to the customer. It is the skill of the photographer which is most important to get the desired result.',
	(int) 15 => '<p>13. Hon'ble Karnataka High Court followed the same principle in the case of Keshoram Surlndranath Photo-mag Pvt. Ltd. v. Assistant Commissioner of Commercial Taxes reported in 121 STC 175. In that judgment, learned Judges of the Karnataka High Court relied on the judgment of the Supreme Court in B.C. Kame's case and came to the conclusion that in the job of the photographer in supplying positive prints to his customer, no works contract is involved and photographs are not marketable or saleable commodity and as such no tax can be levied on it.',
	(int) 16 => '<p>14. Against the said judgment of the Karnataka High Court, the State of Karnataka High Court filed a S.L.P. before the Hon'ble Supreme Court bearing SLP Nos. 6136-6163 of 2000 and the Hon'ble Supreme Court dismissed the SLP on 20th April, 2000.',
	(int) 17 => '<p>15. In the case of Rainbow Colour Lab v. State of M.P. learned Judges of the Hon'ble Supreme Court reiterated its judgment in B.C. Kame's case and came to the following conclusion:',
	(int) 18 => '<p>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.',
	(int) 19 => '<p>Hon'ble Supreme Court in Bharat Sanchar Nigam Ltd. v. Union of India reported in 145 STC 91 again reiterated the principle in B.C. Kame's case and held that the work done by the photographer is only in the nature of a service contract not involving any sale of goods and held that the stand taken by the State cannot be sustained.',
	(int) 20 => '<p>16. Learned Counsel for the petitioner submitted that the photographs taken by the petitioner are not goods which can be sold and is not a marketable commodity like any other goods. When the copies of photographs are made out, they have no utility or value to any other person than the customer. It is already admitted that the papers utilized for photographs are tax paid goods. Therefore, it is contended by the learned Counsel for the petitioner that the work of photography does not come within the purview of works contract as defined in Section 2(jj) of the Orissa Sales Tax Act.',
	(int) 21 => '<p>17. Learned Counsel for the Revenue in this case virtually did not contest the submission made by the learned Counsel for the petitioner and in support of his contention, learned Counsel for the Revenue relied on a decision of the Supreme Court in the case of Imagic Creative Pvt. Ltd. v. Commissioner of Commercial Taxes and Ors. reported in (2008) 10 RC 236. In that judgment, learned Judges held that since the contract in question is a service contract, it is difficult to hold that in a case of this nature, sales tax would be payable on the value of the entire contract irrespective of the element of service provided.',
	(int) 22 => '<p>For the reasons discussed above, we answer the first question in the negative and the second question, in the affirmative. We thus answer both the questions in favour of the assessee and against the Revenue.',
	(int) 23 => '<p>The three revision applications are thus disposed of.',
	(int) 24 => '<p>No costs.',
	(int) 25 => '<p>B.N. Mahapatra, J.',
	(int) 26 => '<p>18. I agree.<p>',
	(int) 27 => '<p>'
)
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17. Learned Counsel for the Revenue in this case virtually did not contest the submission made by the learned Counsel for the petitioner and in support of his contention, learned Counsel for the Revenue relied on a decision of the Supreme Court in the case of Imagic Creative Pvt. Ltd. v. Commissioner of Commercial Taxes and Ors. reported in (2008) 10 RC 236. In that judgment, learned Judges held that since the contract in question is a service contract, it is difficult to hold that in a case of this nature, sales tax would be payable on the value of the entire contract irrespective of the element of service provided.

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			'authreffered' => '',
			'casename' => 'Studio Sujata Vs. Commissioner of Sales Tax',
			'casenote' => 'Sales Tax - Assessment - Contract of Sale - Section 12 (5) of Orissa Sales Tax 1947 - Petitioner carries on business of processing and developing photography - Revenue assessed petitioner under Section 12(5) of Act on ground that activities of petitioner can be called works contract - Petitioner approached to Assistant of Sales Tax on ground that there is no contract of sale between the petitioner and the client, it is only service - Dismissed and affirmed by Tribunal - Hence present petition - Whether Tribunal is right to held that tax is exigible for photographs as execution of works contract or not? - Held, as per precedent laid down by Supreme Court in case of Sales Tax Officer v. B.C. Kame that photographer takes photograph and develops negatives and does other photographic work and thereafter supplies prints to his client - By doing so he cannot be said to enter into contract for sale of goods - Therefore, job of photographer is contract for work and labour and it is not contract of sale - Revenue committed mistake in assessing petitioner under Section 12(5) of Act on basis of contract of sale - Petition disposed of accordingly  - STATE FINANCIAL CORPORATIONS ACT, 1951 [63/1951]. Section 29; [P.K. Tripathy, A.K. Parichha & N.Prusty, JJ] Discharge of loan  Orissa Forest Act (14 of 1972), Section 56  Confiscation of vehicle - Held, The Authorities under Section 56 of the Orissa Forest Act, 1972 are not obliged to release the vehicle from the confiscation proceeding or to pay the sale proceeds of the vehicle after the order of confiscation in favour of Orissa State Financial Corporation when such vehicles were purchased on being financed by the Orissa State Financial Corporation and the loan had not been liquidated by the date of the seizure/confiscation of the vehicle. Concept of first charge or second charge has no applicability when the vehicle is not otherwise disposed of to determine the liabilities of the loanee. On the other hand the vehicle having been found indulged in forest offences was made subject matter of a confiscation proceedings, and therefore, the procedure followed for confiscation of the vehicle and for its sale is punitive in nature and not with a view to give benefit to anybody including the Department which initiated the confiscation proceeding. Apart from that, the claim of the Orissa State Financial Corporation as against its loanee (who had taken the vehicle on hire- purchase agreement) brings the loanee and the sureties within the default clause under the State Financial Corporation Act, 1951 or the heirs and successors of such persons. Procedure is provided in the Act, 1951 and the Rules thereof about the manner in which such loan is to be recovered, and in that context only the vehicle under the hire-purchase agreement is placed as the first charge. If such property is not available for any reason, then the loan is not automatically waived or the loanee and his sureties are not automatically redeemed of the liabilities to repay. The Financial Corporation is concerned with repayment of loan either from the property or persons offered as surety. Thus, a vehicle, which is subject matter of confiscation proceeding under the Act, 1872, being not available to the Orissa State Financial Corporation for adjustment of the unpaid loan, that does not at all bring out an anomalous situation so as to defeat the right of the Orissa State Financial Corporation. Agreement between the Orissa State Financial Corporation and the loanee is a pure and simple contract governed by the provisions of the Contract Act, 1872 read with the provisions in the Act, 1951 and its Rules. On the other hand, a confiscation proceeding under the Act, 1972 is punitive in nature for commission of a forest offence. Thus, by virtue of the provision in Section 56 read with Section 64 (2) of the Act, 1972, the action taken for confiscation of the vehicle cannot be extended to grant protection of the loan advanced by Orissa State Financial Corporation. By doing that it amounts to grant premium to the pick-pockets in as much as, by making payment of the confiscation amount in favour of the Orissa State Financial Corporation the loan burden of the accused of the forest offence is reduced to the extent of the sale proceeds of the vehicle. In other words, on payment of the sale proceeds of the confiscation proceeding to the Orissa State Financial Corporation towards discharge of the loan account of the accused of a forest offence, it would lead to a system to reward him by repayment of his loan. Then it does not become a penalty nor the action become punitive, but it remains as a reward to the accused of forest offence. Such a concept is totally not conceivable from any provision in the Act, 1972 or the Act, 1951. [AIR 2002 Orissa 130 Overruled]. -- STATE FINANCIAL CORPORATIONS ACT, 1951. 
Section 29; Discharge of loan  Orissa Forest Act (14 of 1972), Section 56  Confiscation of vehicle - Held, The Authorities under Section 56 of the Orissa Forest Act, 1972 are not obliged to release the vehicle from the confiscation proceeding or to pay the sale proceeds of the vehicle after the order of confiscation in favour of Orissa State Financial Corporation when such vehicles were purchased on being financed by the Orissa State Financial Corporation and the loan had not been liquidated by the date of the seizure/confiscation of the vehicle. Concept of first charge or second charge has no applicability when the vehicle is not otherwise disposed of to determine the liabilities of the loanee. On the other hand the vehicle having been found indulged in forest offences was made subject matter of a confiscation proceedings, and therefore, the procedure followed for confiscation of the vehicle and for its sale is punitive in nature and not with a view to give benefit to anybody including the Department which initiated the confiscation proceeding. Apart from that, the claim of the Orissa State Financial Corporation as against its loanee (who had taken the vehicle on hire- purchase agreement) brings the loanee and the sureties within the default clause under the State Financial Corporation Act, 1951 or the heirs and successors of such persons. Procedure is provided in the Act, 1951 and the Rules thereof about the manner in which such loan is to be recovered, and in that context only the vehicle under the hire-purchase agreement is placed as the first charge. If such property is not available for any reason, then the loan is not automatically waived or the loanee and his sureties are not automatically redeemed of the liabilities to repay. The Financial Corporation is concerned with repayment of loan either from the property or persons offered as surety. Thus, a vehicle, which is subject matter of confiscation proceeding under the Act, 1872, being not available to the Orissa State Financial Corporation for adjustment of the unpaid loan, that does not at all bring out an anomalous situation so as to defeat the right of the Orissa State Financial Corporation. Agreement between the Orissa State Financial Corporation and the loanee is a pure and simple contract governed by the provisions of the Contract Act, 1872 read with the provisions in the Act, 1951 and its Rules. On the other hand, a confiscation proceeding under the Act, 1972 is punitive in nature for commission of a forest offence. Thus, by virtue of the provision in Section 56 read with Section 64 (2) of the Act, 1972, the action taken for confiscation of the vehicle cannot be extended to grant protection of the loan advanced by Orissa State Financial Corporation. By doing that it amounts to grant premium to the pick-pockets in as much as, by making payment of the confiscation amount in favour of the Orissa State Financial Corporation the loan burden of the accused of the forest offence is reduced to the extent of the sale proceeds of the vehicle. In other words, on payment of the sale proceeds of the confiscation proceeding to the Orissa State Financial Corporation towards discharge of the loan account of the accused of a forest offence, it would lead to a system to reward him by repayment of his loan. Then it does not become a penalty nor the action become punitive, but it remains as a reward to the accused of forest offence. Such a concept is totally not conceivable from any provision in the Act, 1972 or the Act, 1951. [AIR 2002 Orissa 130 Overruled].  -  In that case, the stand of the Revenue was disapproved by the Orissa High Court. 16. Learned Counsel for the petitioner submitted that the photographs taken by the petitioner are not goods which can be sold and is not a marketable commodity like any other goods.',
			'caseanalysis' => null,
			'casesref' => 'Imagic Creative Pvt. Ltd. v. Commissioner of Commercial Taxes and Ors.;',
			'citingcases' => '',
			'counselplain' => '',
			'counseldef' => '',
			'court' => 'Orissa',
			'court_type' => 'HC',
			'decidedon' => '2008-04-02',
			'deposition' => '',
			'favorof' => null,
			'findings' => null,
			'judge' => ' A.K. Ganguly, C.J. and; B.N. Mahapatra, J.',
			'judgement' => '<p style="text-align: justify;">A.K. Ganguly, C.J.</p><p style="text-align: justify;">1. Initially three S.J.Cs. being S.J.C. Nos. 10 of 1997, 8 of 1997 and 9 of 1997 were filed and subsequently renumbered as STREV Nos. 212, 214 and 216 of 2007 respectively. In view of the common questions of facts and law, all the three Revision Applications are heard and disposed of together.</p><p style="text-align: justify;">2. The following questions of law arising out of the order passed by the Orissa Sales Tax Tribunal on 8.12.1993 in Second Appeal Nos. 3345 to 3350 of 1991-92 have been referred to this Hon'ble High Court in terms of the order of this Hon'ble Court dated 24.2.1997. The questions are:</p><p style="text-align: justify;">(i) Whether on the facts and in the circumstances of the case, the Tribunal is right to held that tax is exigible for photographs as execution of works contract ?</p><p style="text-align: justify;">(ii) Whether on the facts and in the circumstances of the case, the conclusion of the Tribunal is perverse due to non-consideration and mis-consideration of facts and law and, therefore, it is liable to be set aside for re-hearing ?</p><p style="text-align: justify;">3. The materials facts out of which those questions arise are that the petitioner carries on the business of processing and developing photography. In the usual course of business, the petitioner takes photographs of persons or of family and then develops the negative by employing his skill and labour and then supplies the photographs to the clients. These photographs which are prepared by the petitioner are not commercial items because they are neither purchased nor sold. However, to develop these photographs employment of skill and labour is essential. It may be mentioned that petitioner does not carry on any sale of photographs of national leaders, God and Goddess.</p><p style="text-align: justify;">4. After the passing of 46th amendment of the Constitution of India and consequent amendments thereto in Orissa Sales Tax Act (OST Act), the Sales Tax Officer, Bhubaneswar-II Circle, Bhubaneswar sent notices to assess the petitioner as an unregistered dealer under Section 12 (5) of the OST Act, inter alia, contending that the petitioner's activities can be called 'works contract'. Pursuant to said notice, the petitioner gave its reply and appeared before the Sales Tax Officer and produced the books of account and documents including Receipts, Purchase Memos, Vouchers, Ledger and thereby denied its liability under the OST Act. The petitioner also submitted objection petitions on various dates i.e. 28.12.1985, 10.1.1986, 20.2.1986 and 29.2.1988 contending, inter alia, that the petitioner has no sales tax liability under OST Act and the notices, which were issued, are without jurisdiction.</p><p style="text-align: justify;">5. Ignoring the said objections of the petitioner, the Sales Tax Officer, Bhubaneswar-II Circle, Bhubaneswar assessed the petitioner as an unregistered dealer, inter alia, holding that the petitioner is liable to pay sales tax as petitioner has been alleged to carry activities of 'works contract'. Therefore, orders of assessment being dated 29.2.1988 for the years 1984-85 (9/84 to 3/85), 1985-86 and 1986- 87 under Section 12(5) of OST Act and under Rule 5 of the Orissa Additional Sales Tax Rules, 1975 were passed and a tax of Rs. 20,765.00 and penalty of Rs. 5,000.00 totalling to Rs. 25,765.00 was imposed on the petitioner. The petitioner then filed the First Appeal before the learned Assistant Commissioner of Sales Tax. The First Appellate Authority by an order dated 27.9.1991 confirmed the levy of tax under the OST Act, but reduced the penalty to Rs. 1250.00. Thereupon, the petitioner filed the Second Appeal before the Orissa Sales Tax Tribunal, Cuttack. The said Tribunal heard the Second Appeal and in course of hearing, the petitioner raised various contentions. Ultimately, the Tribunal upheld the levy of tax but deleted the penalty.</p><p style="text-align: justify;">6. Thereafter the petitioner came up with a reference application under Section 24(1) of the Orissa Sales Tax Act framing certain questions for being referred to the Hon'ble High Court. The said prayer of the petitioner was rejected by the Tribunal. Then the petitioner moved Hon'ble High Court under Section 24(2)(b) of the Orissa Sales Tax Act, 1947 whereupon the High Court directed the Tribunal to state to case and refer the questions under Section 24(3) of the OST Act for a decision of the High Court.</p><p style="text-align: justify;">7. Accordingly, the Tribunal stated the case and referred the aforesaid questions for a decision of the High Court.</p><p style="text-align: justify;">8. Learned Counsel for the petitioner before the High Court submitted that in the transaction in question, there is no contract of sale between the petitioner and the client. It is only a contract of service and the photographs, which the petitioner produced by supplying the same has no commercial value and are not marketable. So, there is no question of a works contract. It is the consistent stand of the petitioner that the present photographs which are produced by the petitioner have no utility or value to any other person than the customer. By developing such photographs, the petitioner only renders service to his customers. The customer pays for the service rendered by the petitioner. It is the contention of the petitioner that his activity is similar to that of consulting firm preparing plan and sketches pursuant to client's specification or professional giving opinion on papers. All those activities are done to serve the client. Therefore, this does not come within the purview of the definition of 'goods', 'sale', 'dealer' or 'works contract'. It is the petitioner's case that he purchased the goods, namely, papers on payment of sales tax. Further levy of tax on the personal service rendered to the client of the petitioner will amount to double taxation. It is also the contention of the petitioner that the paper which is used in the photography are incidental and insignificant.</p><p style="text-align: justify;">9. In support of its contention, learned Counsel for the petitioner has relied on several judgments. First reliance was place on the judgment of the Supreme Court in the case of Sales Tax Officer v. B.C. Kame reported in 39 STC 237(SC). At page 241 of the report, learned Judges of the Supreme Court held that a photographer takes the photograph and develops the negatives and does other photographic work and thereafter supplies the prints to his client. By doing so he cannot be said to enter into a contract for sale of goods. On the other hand, the contract is for use of skill and labour by the photographer to bring about the desired result. Learned Judges held that the job of a photographer is a contract for work and labour and it is not a contract of sale.</p><p style="text-align: justify;">10. Reliance was also placed on a judgment of this High Court in the case of Photo Emporium v. Addl. District Magistrate reported in 77 STC 199 in which this High Court followed the ratio of the judgment of the Supreme Court in the case of B.C. Kame. In that case, the stand of the Revenue was disapproved by the Orissa High Court.</p><p style="text-align: justify;">11. Similar view was taken in 110 STC 145 in the case of Foto Colour Labs Pvt. Ltd. v. Commercial Taxes Officer where the Tribunal held that the transfer of paper in the photograph is purely incidental and payment is only taken to give positive prints and not to get the photo papers. Therefore, the contract in between the petitioner and his client is not a contract of sale, and neither directly or indirectly works contract is involved in the supply of photo papers. Similar view was taken by the West Bengal Taxation Tribunal in the case of Studio Kamalalaya v. Commercial Tax Officer reported in 89 STC 307.</p><p style="text-align: justify;">12. In the case of Bavens v. Onion of India report in 97 STC 161, learned Judges held that when a photographer takes a photograph of his customer, he develops the negative and supplies positive prints in the desired size to the customer. In doing so the photographer uses his own camera and his own film. The negative belongs to the photographer and not to the customer. No basic goods are provided by the customer which are subjected to processing by the photographer so as to make the contract a works contract. There is no accretion to goods or property or the nucleus of a property which belongs to the customer. It is the skill of the photographer which is most important to get the desired result.</p><p style="text-align: justify;">13. Hon'ble Karnataka High Court followed the same principle in the case of Keshoram Surlndranath Photo-mag Pvt. Ltd. v. Assistant Commissioner of Commercial Taxes reported in 121 STC 175. In that judgment, learned Judges of the Karnataka High Court relied on the judgment of the Supreme Court in B.C. Kame's case and came to the conclusion that in the job of the photographer in supplying positive prints to his customer, no works contract is involved and photographs are not marketable or saleable commodity and as such no tax can be levied on it.</p><p style="text-align: justify;">14. Against the said judgment of the Karnataka High Court, the State of Karnataka High Court filed a S.L.P. before the Hon'ble Supreme Court bearing SLP Nos. 6136-6163 of 2000 and the Hon'ble Supreme Court dismissed the SLP on 20th April, 2000.</p><p style="text-align: justify;">15. In the case of Rainbow Colour Lab v. State of M.P. learned Judges of the Hon'ble Supreme Court reiterated its judgment in B.C. Kame's case and came to the following conclusion:</p><p style="text-align: justify;">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.</p><p style="text-align: justify;">Hon'ble Supreme Court in Bharat Sanchar Nigam Ltd. v. Union of India reported in 145 STC 91 again reiterated the principle in B.C. Kame's case and held that the work done by the photographer is only in the nature of a service contract not involving any sale of goods and held that the stand taken by the State cannot be sustained.</p><p style="text-align: justify;">16. Learned Counsel for the petitioner submitted that the photographs taken by the petitioner are not goods which can be sold and is not a marketable commodity like any other goods. When the copies of photographs are made out, they have no utility or value to any other person than the customer. It is already admitted that the papers utilized for photographs are tax paid goods. Therefore, it is contended by the learned Counsel for the petitioner that the work of photography does not come within the purview of works contract as defined in Section 2(jj) of the Orissa Sales Tax Act.</p><p style="text-align: justify;">17. Learned Counsel for the Revenue in this case virtually did not contest the submission made by the learned Counsel for the petitioner and in support of his contention, learned Counsel for the Revenue relied on a decision of the Supreme Court in the case of Imagic Creative Pvt. Ltd. v. Commissioner of Commercial Taxes and Ors. reported in (2008) 10 RC 236. In that judgment, learned Judges held that since the contract in question is a service contract, it is difficult to hold that in a case of this nature, sales tax would be payable on the value of the entire contract irrespective of the element of service provided.</p><p style="text-align: justify;">For the reasons discussed above, we answer the first question in the negative and the second question, in the affirmative. We thus answer both the questions in favour of the assessee and against the Revenue.</p><p style="text-align: justify;">The three revision applications are thus disposed of.</p><p style="text-align: justify;">No costs.</p><p style="text-align: justify;">B.N. Mahapatra, J.</p><p style="text-align: justify;">18. I agree.<p style="text-align: justify;"></p><p style="text-align: justify;">',
			'observations' => null,
			'overruledby' => null,
			'prhistory' => '',
			'pubs' => '106(2008)CLT317; 2008(I)OLR953; (2008)17VST289(Orissa)',
			'ratiodecidendi' => '',
			'respondent' => 'Commissioner of Sales Tax',
			'sub' => 'Sales Tax/VAT',
			'link' => null,
			'circuit' => null
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$title_for_layout = 'Studio Sujata Vs Commissioner of Sales Tax - Citation 531271 - Court Judgment | '
$desc = array(
	'Judgement' => array(
		'id' => '531271',
		'acts' => '',
		'appealno' => '',
		'appellant' => 'Studio Sujata',
		'authreffered' => '',
		'casename' => 'Studio Sujata Vs. Commissioner of Sales Tax',
		'casenote' => 'Sales Tax - Assessment - Contract of Sale - Section 12 (5) of Orissa Sales Tax 1947 - Petitioner carries on business of processing and developing photography - Revenue assessed petitioner under Section 12(5) of Act on ground that activities of petitioner can be called works contract - Petitioner approached to Assistant of Sales Tax on ground that there is no contract of sale between the petitioner and the client, it is only service - Dismissed and affirmed by Tribunal - Hence present petition - Whether Tribunal is right to held that tax is exigible for photographs as execution of works contract or not? - Held, as per precedent laid down by Supreme Court in case of Sales Tax Officer v. B.C. Kame that photographer takes photograph and develops negatives and does other photographic work and thereafter supplies prints to his client - By doing so he cannot be said to enter into contract for sale of goods - Therefore, job of photographer is contract for work and labour and it is not contract of sale - Revenue committed mistake in assessing petitioner under Section 12(5) of Act on basis of contract of sale - Petition disposed of accordingly  - STATE FINANCIAL CORPORATIONS ACT, 1951 [63/1951]. Section 29; [P.K. Tripathy, A.K. Parichha & N.Prusty, JJ] Discharge of loan  Orissa Forest Act (14 of 1972), Section 56  Confiscation of vehicle - Held, The Authorities under Section 56 of the Orissa Forest Act, 1972 are not obliged to release the vehicle from the confiscation proceeding or to pay the sale proceeds of the vehicle after the order of confiscation in favour of Orissa State Financial Corporation when such vehicles were purchased on being financed by the Orissa State Financial Corporation and the loan had not been liquidated by the date of the seizure/confiscation of the vehicle. Concept of first charge or second charge has no applicability when the vehicle is not otherwise disposed of to determine the liabilities of the loanee. On the other hand the vehicle having been found indulged in forest offences was made subject matter of a confiscation proceedings, and therefore, the procedure followed for confiscation of the vehicle and for its sale is punitive in nature and not with a view to give benefit to anybody including the Department which initiated the confiscation proceeding. Apart from that, the claim of the Orissa State Financial Corporation as against its loanee (who had taken the vehicle on hire- purchase agreement) brings the loanee and the sureties within the default clause under the State Financial Corporation Act, 1951 or the heirs and successors of such persons. Procedure is provided in the Act, 1951 and the Rules thereof about the manner in which such loan is to be recovered, and in that context only the vehicle under the hire-purchase agreement is placed as the first charge. If such property is not available for any reason, then the loan is not automatically waived or the loanee and his sureties are not automatically redeemed of the liabilities to repay. The Financial Corporation is concerned with repayment of loan either from the property or persons offered as surety. Thus, a vehicle, which is subject matter of confiscation proceeding under the Act, 1872, being not available to the Orissa State Financial Corporation for adjustment of the unpaid loan, that does not at all bring out an anomalous situation so as to defeat the right of the Orissa State Financial Corporation. Agreement between the Orissa State Financial Corporation and the loanee is a pure and simple contract governed by the provisions of the Contract Act, 1872 read with the provisions in the Act, 1951 and its Rules. On the other hand, a confiscation proceeding under the Act, 1972 is punitive in nature for commission of a forest offence. Thus, by virtue of the provision in Section 56 read with Section 64 (2) of the Act, 1972, the action taken for confiscation of the vehicle cannot be extended to grant protection of the loan advanced by Orissa State Financial Corporation. By doing that it amounts to grant premium to the pick-pockets in as much as, by making payment of the confiscation amount in favour of the Orissa State Financial Corporation the loan burden of the accused of the forest offence is reduced to the extent of the sale proceeds of the vehicle. In other words, on payment of the sale proceeds of the confiscation proceeding to the Orissa State Financial Corporation towards discharge of the loan account of the accused of a forest offence, it would lead to a system to reward him by repayment of his loan. Then it does not become a penalty nor the action become punitive, but it remains as a reward to the accused of forest offence. Such a concept is totally not conceivable from any provision in the Act, 1972 or the Act, 1951. [AIR 2002 Orissa 130 Overruled]. -- STATE FINANCIAL CORPORATIONS ACT, 1951. 
Section 29; Discharge of loan  Orissa Forest Act (14 of 1972), Section 56  Confiscation of vehicle - Held, The Authorities under Section 56 of the Orissa Forest Act, 1972 are not obliged to release the vehicle from the confiscation proceeding or to pay the sale proceeds of the vehicle after the order of confiscation in favour of Orissa State Financial Corporation when such vehicles were purchased on being financed by the Orissa State Financial Corporation and the loan had not been liquidated by the date of the seizure/confiscation of the vehicle. Concept of first charge or second charge has no applicability when the vehicle is not otherwise disposed of to determine the liabilities of the loanee. On the other hand the vehicle having been found indulged in forest offences was made subject matter of a confiscation proceedings, and therefore, the procedure followed for confiscation of the vehicle and for its sale is punitive in nature and not with a view to give benefit to anybody including the Department which initiated the confiscation proceeding. Apart from that, the claim of the Orissa State Financial Corporation as against its loanee (who had taken the vehicle on hire- purchase agreement) brings the loanee and the sureties within the default clause under the State Financial Corporation Act, 1951 or the heirs and successors of such persons. Procedure is provided in the Act, 1951 and the Rules thereof about the manner in which such loan is to be recovered, and in that context only the vehicle under the hire-purchase agreement is placed as the first charge. If such property is not available for any reason, then the loan is not automatically waived or the loanee and his sureties are not automatically redeemed of the liabilities to repay. The Financial Corporation is concerned with repayment of loan either from the property or persons offered as surety. Thus, a vehicle, which is subject matter of confiscation proceeding under the Act, 1872, being not available to the Orissa State Financial Corporation for adjustment of the unpaid loan, that does not at all bring out an anomalous situation so as to defeat the right of the Orissa State Financial Corporation. Agreement between the Orissa State Financial Corporation and the loanee is a pure and simple contract governed by the provisions of the Contract Act, 1872 read with the provisions in the Act, 1951 and its Rules. On the other hand, a confiscation proceeding under the Act, 1972 is punitive in nature for commission of a forest offence. Thus, by virtue of the provision in Section 56 read with Section 64 (2) of the Act, 1972, the action taken for confiscation of the vehicle cannot be extended to grant protection of the loan advanced by Orissa State Financial Corporation. By doing that it amounts to grant premium to the pick-pockets in as much as, by making payment of the confiscation amount in favour of the Orissa State Financial Corporation the loan burden of the accused of the forest offence is reduced to the extent of the sale proceeds of the vehicle. In other words, on payment of the sale proceeds of the confiscation proceeding to the Orissa State Financial Corporation towards discharge of the loan account of the accused of a forest offence, it would lead to a system to reward him by repayment of his loan. Then it does not become a penalty nor the action become punitive, but it remains as a reward to the accused of forest offence. Such a concept is totally not conceivable from any provision in the Act, 1972 or the Act, 1951. [AIR 2002 Orissa 130 Overruled].  -  In that case, the stand of the Revenue was disapproved by the Orissa High Court. 16. Learned Counsel for the petitioner submitted that the photographs taken by the petitioner are not goods which can be sold and is not a marketable commodity like any other goods.',
		'caseanalysis' => null,
		'casesref' => 'Imagic Creative Pvt. Ltd. v. Commissioner of Commercial Taxes and Ors.;',
		'citingcases' => '',
		'counselplain' => '',
		'counseldef' => '',
		'court' => 'Orissa',
		'court_type' => 'HC',
		'decidedon' => '2008-04-02',
		'deposition' => '',
		'favorof' => null,
		'findings' => null,
		'judge' => ' A.K. Ganguly, C.J. and; B.N. Mahapatra, J.',
		'judgement' => '<p>A.K. Ganguly, C.J.</p><p>1. Initially three S.J.Cs. being S.J.C. Nos. 10 of 1997, 8 of 1997 and 9 of 1997 were filed and subsequently renumbered as STREV Nos. 212, 214 and 216 of 2007 respectively. In view of the common questions of facts and law, all the three Revision Applications are heard and disposed of together.</p><p>2. The following questions of law arising out of the order passed by the Orissa Sales Tax Tribunal on 8.12.1993 in Second Appeal Nos. 3345 to 3350 of 1991-92 have been referred to this Hon'ble High Court in terms of the order of this Hon'ble Court dated 24.2.1997. The questions are:</p><p>(i) Whether on the facts and in the circumstances of the case, the Tribunal is right to held that tax is exigible for photographs as execution of works contract ?</p><p>(ii) Whether on the facts and in the circumstances of the case, the conclusion of the Tribunal is perverse due to non-consideration and mis-consideration of facts and law and, therefore, it is liable to be set aside for re-hearing ?</p><p>3. The materials facts out of which those questions arise are that the petitioner carries on the business of processing and developing photography. In the usual course of business, the petitioner takes photographs of persons or of family and then develops the negative by employing his skill and labour and then supplies the photographs to the clients. These photographs which are prepared by the petitioner are not commercial items because they are neither purchased nor sold. However, to develop these photographs employment of skill and labour is essential. It may be mentioned that petitioner does not carry on any sale of photographs of national leaders, God and Goddess.</p><p>4. After the passing of 46th amendment of the Constitution of India and consequent amendments thereto in Orissa Sales Tax Act (OST Act), the Sales Tax Officer, Bhubaneswar-II Circle, Bhubaneswar sent notices to assess the petitioner as an unregistered dealer under Section 12 (5) of the OST Act, inter alia, contending that the petitioner's activities can be called 'works contract'. Pursuant to said notice, the petitioner gave its reply and appeared before the Sales Tax Officer and produced the books of account and documents including Receipts, Purchase Memos, Vouchers, Ledger and thereby denied its liability under the OST Act. The petitioner also submitted objection petitions on various dates i.e. 28.12.1985, 10.1.1986, 20.2.1986 and 29.2.1988 contending, inter alia, that the petitioner has no sales tax liability under OST Act and the notices, which were issued, are without jurisdiction.</p><p>5. Ignoring the said objections of the petitioner, the Sales Tax Officer, Bhubaneswar-II Circle, Bhubaneswar assessed the petitioner as an unregistered dealer, inter alia, holding that the petitioner is liable to pay sales tax as petitioner has been alleged to carry activities of 'works contract'. Therefore, orders of assessment being dated 29.2.1988 for the years 1984-85 (9/84 to 3/85), 1985-86 and 1986- 87 under Section 12(5) of OST Act and under Rule 5 of the Orissa Additional Sales Tax Rules, 1975 were passed and a tax of Rs. 20,765.00 and penalty of Rs. 5,000.00 totalling to Rs. 25,765.00 was imposed on the petitioner. The petitioner then filed the First Appeal before the learned Assistant Commissioner of Sales Tax. The First Appellate Authority by an order dated 27.9.1991 confirmed the levy of tax under the OST Act, but reduced the penalty to Rs. 1250.00. Thereupon, the petitioner filed the Second Appeal before the Orissa Sales Tax Tribunal, Cuttack. The said Tribunal heard the Second Appeal and in course of hearing, the petitioner raised various contentions. Ultimately, the Tribunal upheld the levy of tax but deleted the penalty.</p><p>6. Thereafter the petitioner came up with a reference application under Section 24(1) of the Orissa Sales Tax Act framing certain questions for being referred to the Hon'ble High Court. The said prayer of the petitioner was rejected by the Tribunal. Then the petitioner moved Hon'ble High Court under Section 24(2)(b) of the Orissa Sales Tax Act, 1947 whereupon the High Court directed the Tribunal to state to case and refer the questions under Section 24(3) of the OST Act for a decision of the High Court.</p><p>7. Accordingly, the Tribunal stated the case and referred the aforesaid questions for a decision of the High Court.</p><p>8. Learned Counsel for the petitioner before the High Court submitted that in the transaction in question, there is no contract of sale between the petitioner and the client. It is only a contract of service and the photographs, which the petitioner produced by supplying the same has no commercial value and are not marketable. So, there is no question of a works contract. It is the consistent stand of the petitioner that the present photographs which are produced by the petitioner have no utility or value to any other person than the customer. By developing such photographs, the petitioner only renders service to his customers. The customer pays for the service rendered by the petitioner. It is the contention of the petitioner that his activity is similar to that of consulting firm preparing plan and sketches pursuant to client's specification or professional giving opinion on papers. All those activities are done to serve the client. Therefore, this does not come within the purview of the definition of 'goods', 'sale', 'dealer' or 'works contract'. It is the petitioner's case that he purchased the goods, namely, papers on payment of sales tax. Further levy of tax on the personal service rendered to the client of the petitioner will amount to double taxation. It is also the contention of the petitioner that the paper which is used in the photography are incidental and insignificant.</p><p>9. In support of its contention, learned Counsel for the petitioner has relied on several judgments. First reliance was place on the judgment of the Supreme Court in the case of Sales Tax Officer v. B.C. Kame reported in 39 STC 237(SC). At page 241 of the report, learned Judges of the Supreme Court held that a photographer takes the photograph and develops the negatives and does other photographic work and thereafter supplies the prints to his client. By doing so he cannot be said to enter into a contract for sale of goods. On the other hand, the contract is for use of skill and labour by the photographer to bring about the desired result. Learned Judges held that the job of a photographer is a contract for work and labour and it is not a contract of sale.</p><p>10. Reliance was also placed on a judgment of this High Court in the case of Photo Emporium v. Addl. District Magistrate reported in 77 STC 199 in which this High Court followed the ratio of the judgment of the Supreme Court in the case of B.C. Kame. In that case, the stand of the Revenue was disapproved by the Orissa High Court.</p><p>11. Similar view was taken in 110 STC 145 in the case of Foto Colour Labs Pvt. Ltd. v. Commercial Taxes Officer where the Tribunal held that the transfer of paper in the photograph is purely incidental and payment is only taken to give positive prints and not to get the photo papers. Therefore, the contract in between the petitioner and his client is not a contract of sale, and neither directly or indirectly works contract is involved in the supply of photo papers. Similar view was taken by the West Bengal Taxation Tribunal in the case of Studio Kamalalaya v. Commercial Tax Officer reported in 89 STC 307.</p><p>12. In the case of Bavens v. Onion of India report in 97 STC 161, learned Judges held that when a photographer takes a photograph of his customer, he develops the negative and supplies positive prints in the desired size to the customer. In doing so the photographer uses his own camera and his own film. The negative belongs to the photographer and not to the customer. No basic goods are provided by the customer which are subjected to processing by the photographer so as to make the contract a works contract. There is no accretion to goods or property or the nucleus of a property which belongs to the customer. It is the skill of the photographer which is most important to get the desired result.</p><p>13. Hon'ble Karnataka High Court followed the same principle in the case of Keshoram Surlndranath Photo-mag Pvt. Ltd. v. Assistant Commissioner of Commercial Taxes reported in 121 STC 175. In that judgment, learned Judges of the Karnataka High Court relied on the judgment of the Supreme Court in B.C. Kame's case and came to the conclusion that in the job of the photographer in supplying positive prints to his customer, no works contract is involved and photographs are not marketable or saleable commodity and as such no tax can be levied on it.</p><p>14. Against the said judgment of the Karnataka High Court, the State of Karnataka High Court filed a S.L.P. before the Hon'ble Supreme Court bearing SLP Nos. 6136-6163 of 2000 and the Hon'ble Supreme Court dismissed the SLP on 20th April, 2000.</p><p>15. In the case of Rainbow Colour Lab v. State of M.P. learned Judges of the Hon'ble Supreme Court reiterated its judgment in B.C. Kame's case and came to the following conclusion:</p><p>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.</p><p>Hon'ble Supreme Court in Bharat Sanchar Nigam Ltd. v. Union of India reported in 145 STC 91 again reiterated the principle in B.C. Kame's case and held that the work done by the photographer is only in the nature of a service contract not involving any sale of goods and held that the stand taken by the State cannot be sustained.</p><p>16. Learned Counsel for the petitioner submitted that the photographs taken by the petitioner are not goods which can be sold and is not a marketable commodity like any other goods. When the copies of photographs are made out, they have no utility or value to any other person than the customer. It is already admitted that the papers utilized for photographs are tax paid goods. Therefore, it is contended by the learned Counsel for the petitioner that the work of photography does not come within the purview of works contract as defined in Section 2(jj) of the Orissa Sales Tax Act.</p><p>17. Learned Counsel for the Revenue in this case virtually did not contest the submission made by the learned Counsel for the petitioner and in support of his contention, learned Counsel for the Revenue relied on a decision of the Supreme Court in the case of Imagic Creative Pvt. Ltd. v. Commissioner of Commercial Taxes and Ors. reported in (2008) 10 RC 236. In that judgment, learned Judges held that since the contract in question is a service contract, it is difficult to hold that in a case of this nature, sales tax would be payable on the value of the entire contract irrespective of the element of service provided.</p><p>For the reasons discussed above, we answer the first question in the negative and the second question, in the affirmative. We thus answer both the questions in favour of the assessee and against the Revenue.</p><p>The three revision applications are thus disposed of.</p><p>No costs.</p><p>B.N. Mahapatra, J.</p><p>18. I agree.<p></p><p>',
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		'pubs' => '106(2008)CLT317; 2008(I)OLR953; (2008)17VST289(Orissa)',
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		'sub' => 'Sales Tax/VAT',
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	(int) 0 => '<p>A.K. Ganguly, C.J.',
	(int) 1 => '<p>1. Initially three S.J.Cs. being S.J.C. Nos. 10 of 1997, 8 of 1997 and 9 of 1997 were filed and subsequently renumbered as STREV Nos. 212, 214 and 216 of 2007 respectively. In view of the common questions of facts and law, all the three Revision Applications are heard and disposed of together.',
	(int) 2 => '<p>2. The following questions of law arising out of the order passed by the Orissa Sales Tax Tribunal on 8.12.1993 in Second Appeal Nos. 3345 to 3350 of 1991-92 have been referred to this Hon'ble High Court in terms of the order of this Hon'ble Court dated 24.2.1997. The questions are:',
	(int) 3 => '<p>(i) Whether on the facts and in the circumstances of the case, the Tribunal is right to held that tax is exigible for photographs as execution of works contract ?',
	(int) 4 => '<p>(ii) Whether on the facts and in the circumstances of the case, the conclusion of the Tribunal is perverse due to non-consideration and mis-consideration of facts and law and, therefore, it is liable to be set aside for re-hearing ?',
	(int) 5 => '<p>3. The materials facts out of which those questions arise are that the petitioner carries on the business of processing and developing photography. In the usual course of business, the petitioner takes photographs of persons or of family and then develops the negative by employing his skill and labour and then supplies the photographs to the clients. These photographs which are prepared by the petitioner are not commercial items because they are neither purchased nor sold. However, to develop these photographs employment of skill and labour is essential. It may be mentioned that petitioner does not carry on any sale of photographs of national leaders, God and Goddess.',
	(int) 6 => '<p>4. After the passing of 46th amendment of the Constitution of India and consequent amendments thereto in Orissa Sales Tax Act (OST Act), the Sales Tax Officer, Bhubaneswar-II Circle, Bhubaneswar sent notices to assess the petitioner as an unregistered dealer under Section 12 (5) of the OST Act, inter alia, contending that the petitioner's activities can be called 'works contract'. Pursuant to said notice, the petitioner gave its reply and appeared before the Sales Tax Officer and produced the books of account and documents including Receipts, Purchase Memos, Vouchers, Ledger and thereby denied its liability under the OST Act. The petitioner also submitted objection petitions on various dates i.e. 28.12.1985, 10.1.1986, 20.2.1986 and 29.2.1988 contending, inter alia, that the petitioner has no sales tax liability under OST Act and the notices, which were issued, are without jurisdiction.',
	(int) 7 => '<p>5. Ignoring the said objections of the petitioner, the Sales Tax Officer, Bhubaneswar-II Circle, Bhubaneswar assessed the petitioner as an unregistered dealer, inter alia, holding that the petitioner is liable to pay sales tax as petitioner has been alleged to carry activities of 'works contract'. Therefore, orders of assessment being dated 29.2.1988 for the years 1984-85 (9/84 to 3/85), 1985-86 and 1986- 87 under Section 12(5) of OST Act and under Rule 5 of the Orissa Additional Sales Tax Rules, 1975 were passed and a tax of Rs. 20,765.00 and penalty of Rs. 5,000.00 totalling to Rs. 25,765.00 was imposed on the petitioner. The petitioner then filed the First Appeal before the learned Assistant Commissioner of Sales Tax. The First Appellate Authority by an order dated 27.9.1991 confirmed the levy of tax under the OST Act, but reduced the penalty to Rs. 1250.00. Thereupon, the petitioner filed the Second Appeal before the Orissa Sales Tax Tribunal, Cuttack. The said Tribunal heard the Second Appeal and in course of hearing, the petitioner raised various contentions. Ultimately, the Tribunal upheld the levy of tax but deleted the penalty.',
	(int) 8 => '<p>6. Thereafter the petitioner came up with a reference application under Section 24(1) of the Orissa Sales Tax Act framing certain questions for being referred to the Hon'ble High Court. The said prayer of the petitioner was rejected by the Tribunal. Then the petitioner moved Hon'ble High Court under Section 24(2)(b) of the Orissa Sales Tax Act, 1947 whereupon the High Court directed the Tribunal to state to case and refer the questions under Section 24(3) of the OST Act for a decision of the High Court.',
	(int) 9 => '<p>7. Accordingly, the Tribunal stated the case and referred the aforesaid questions for a decision of the High Court.',
	(int) 10 => '<p>8. Learned Counsel for the petitioner before the High Court submitted that in the transaction in question, there is no contract of sale between the petitioner and the client. It is only a contract of service and the photographs, which the petitioner produced by supplying the same has no commercial value and are not marketable. So, there is no question of a works contract. It is the consistent stand of the petitioner that the present photographs which are produced by the petitioner have no utility or value to any other person than the customer. By developing such photographs, the petitioner only renders service to his customers. The customer pays for the service rendered by the petitioner. It is the contention of the petitioner that his activity is similar to that of consulting firm preparing plan and sketches pursuant to client's specification or professional giving opinion on papers. All those activities are done to serve the client. Therefore, this does not come within the purview of the definition of 'goods', 'sale', 'dealer' or 'works contract'. It is the petitioner's case that he purchased the goods, namely, papers on payment of sales tax. Further levy of tax on the personal service rendered to the client of the petitioner will amount to double taxation. It is also the contention of the petitioner that the paper which is used in the photography are incidental and insignificant.',
	(int) 11 => '<p>9. In support of its contention, learned Counsel for the petitioner has relied on several judgments. First reliance was place on the judgment of the Supreme Court in the case of Sales Tax Officer v. B.C. Kame reported in 39 STC 237(SC). At page 241 of the report, learned Judges of the Supreme Court held that a photographer takes the photograph and develops the negatives and does other photographic work and thereafter supplies the prints to his client. By doing so he cannot be said to enter into a contract for sale of goods. On the other hand, the contract is for use of skill and labour by the photographer to bring about the desired result. Learned Judges held that the job of a photographer is a contract for work and labour and it is not a contract of sale.',
	(int) 12 => '<p>10. Reliance was also placed on a judgment of this High Court in the case of Photo Emporium v. Addl. District Magistrate reported in 77 STC 199 in which this High Court followed the ratio of the judgment of the Supreme Court in the case of B.C. Kame. In that case, the stand of the Revenue was disapproved by the Orissa High Court.',
	(int) 13 => '<p>11. Similar view was taken in 110 STC 145 in the case of Foto Colour Labs Pvt. Ltd. v. Commercial Taxes Officer where the Tribunal held that the transfer of paper in the photograph is purely incidental and payment is only taken to give positive prints and not to get the photo papers. Therefore, the contract in between the petitioner and his client is not a contract of sale, and neither directly or indirectly works contract is involved in the supply of photo papers. Similar view was taken by the West Bengal Taxation Tribunal in the case of Studio Kamalalaya v. Commercial Tax Officer reported in 89 STC 307.',
	(int) 14 => '<p>12. In the case of Bavens v. Onion of India report in 97 STC 161, learned Judges held that when a photographer takes a photograph of his customer, he develops the negative and supplies positive prints in the desired size to the customer. In doing so the photographer uses his own camera and his own film. The negative belongs to the photographer and not to the customer. No basic goods are provided by the customer which are subjected to processing by the photographer so as to make the contract a works contract. There is no accretion to goods or property or the nucleus of a property which belongs to the customer. It is the skill of the photographer which is most important to get the desired result.',
	(int) 15 => '<p>13. Hon'ble Karnataka High Court followed the same principle in the case of Keshoram Surlndranath Photo-mag Pvt. Ltd. v. Assistant Commissioner of Commercial Taxes reported in 121 STC 175. In that judgment, learned Judges of the Karnataka High Court relied on the judgment of the Supreme Court in B.C. Kame's case and came to the conclusion that in the job of the photographer in supplying positive prints to his customer, no works contract is involved and photographs are not marketable or saleable commodity and as such no tax can be levied on it.',
	(int) 16 => '<p>14. Against the said judgment of the Karnataka High Court, the State of Karnataka High Court filed a S.L.P. before the Hon'ble Supreme Court bearing SLP Nos. 6136-6163 of 2000 and the Hon'ble Supreme Court dismissed the SLP on 20th April, 2000.',
	(int) 17 => '<p>15. In the case of Rainbow Colour Lab v. State of M.P. learned Judges of the Hon'ble Supreme Court reiterated its judgment in B.C. Kame's case and came to the following conclusion:',
	(int) 18 => '<p>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.',
	(int) 19 => '<p>Hon'ble Supreme Court in Bharat Sanchar Nigam Ltd. v. Union of India reported in 145 STC 91 again reiterated the principle in B.C. Kame's case and held that the work done by the photographer is only in the nature of a service contract not involving any sale of goods and held that the stand taken by the State cannot be sustained.',
	(int) 20 => '<p>16. Learned Counsel for the petitioner submitted that the photographs taken by the petitioner are not goods which can be sold and is not a marketable commodity like any other goods. When the copies of photographs are made out, they have no utility or value to any other person than the customer. It is already admitted that the papers utilized for photographs are tax paid goods. Therefore, it is contended by the learned Counsel for the petitioner that the work of photography does not come within the purview of works contract as defined in Section 2(jj) of the Orissa Sales Tax Act.',
	(int) 21 => '<p>17. Learned Counsel for the Revenue in this case virtually did not contest the submission made by the learned Counsel for the petitioner and in support of his contention, learned Counsel for the Revenue relied on a decision of the Supreme Court in the case of Imagic Creative Pvt. Ltd. v. Commissioner of Commercial Taxes and Ors. reported in (2008) 10 RC 236. In that judgment, learned Judges held that since the contract in question is a service contract, it is difficult to hold that in a case of this nature, sales tax would be payable on the value of the entire contract irrespective of the element of service provided.',
	(int) 22 => '<p>For the reasons discussed above, we answer the first question in the negative and the second question, in the affirmative. We thus answer both the questions in favour of the assessee and against the Revenue.',
	(int) 23 => '<p>The three revision applications are thus disposed of.',
	(int) 24 => '<p>No costs.',
	(int) 25 => '<p>B.N. Mahapatra, J.',
	(int) 26 => '<p>18. I agree.<p>',
	(int) 27 => '<p>'
)
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For the reasons discussed above, we answer the first question in the negative and the second question, in the affirmative. We thus answer both the questions in favour of the assessee and against the Revenue.

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	'title_for_layout' => 'Studio Sujata Vs Commissioner of Sales Tax - Citation 531271 - Court Judgment | ',
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		'Judgement' => array(
			'id' => '531271',
			'acts' => '',
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			'appellant' => 'Studio Sujata',
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			'casename' => 'Studio Sujata Vs. Commissioner of Sales Tax',
			'casenote' => 'Sales Tax - Assessment - Contract of Sale - Section 12 (5) of Orissa Sales Tax 1947 - Petitioner carries on business of processing and developing photography - Revenue assessed petitioner under Section 12(5) of Act on ground that activities of petitioner can be called works contract - Petitioner approached to Assistant of Sales Tax on ground that there is no contract of sale between the petitioner and the client, it is only service - Dismissed and affirmed by Tribunal - Hence present petition - Whether Tribunal is right to held that tax is exigible for photographs as execution of works contract or not? - Held, as per precedent laid down by Supreme Court in case of Sales Tax Officer v. B.C. Kame that photographer takes photograph and develops negatives and does other photographic work and thereafter supplies prints to his client - By doing so he cannot be said to enter into contract for sale of goods - Therefore, job of photographer is contract for work and labour and it is not contract of sale - Revenue committed mistake in assessing petitioner under Section 12(5) of Act on basis of contract of sale - Petition disposed of accordingly  - STATE FINANCIAL CORPORATIONS ACT, 1951 [63/1951]. Section 29; [P.K. Tripathy, A.K. Parichha & N.Prusty, JJ] Discharge of loan  Orissa Forest Act (14 of 1972), Section 56  Confiscation of vehicle - Held, The Authorities under Section 56 of the Orissa Forest Act, 1972 are not obliged to release the vehicle from the confiscation proceeding or to pay the sale proceeds of the vehicle after the order of confiscation in favour of Orissa State Financial Corporation when such vehicles were purchased on being financed by the Orissa State Financial Corporation and the loan had not been liquidated by the date of the seizure/confiscation of the vehicle. Concept of first charge or second charge has no applicability when the vehicle is not otherwise disposed of to determine the liabilities of the loanee. On the other hand the vehicle having been found indulged in forest offences was made subject matter of a confiscation proceedings, and therefore, the procedure followed for confiscation of the vehicle and for its sale is punitive in nature and not with a view to give benefit to anybody including the Department which initiated the confiscation proceeding. Apart from that, the claim of the Orissa State Financial Corporation as against its loanee (who had taken the vehicle on hire- purchase agreement) brings the loanee and the sureties within the default clause under the State Financial Corporation Act, 1951 or the heirs and successors of such persons. Procedure is provided in the Act, 1951 and the Rules thereof about the manner in which such loan is to be recovered, and in that context only the vehicle under the hire-purchase agreement is placed as the first charge. If such property is not available for any reason, then the loan is not automatically waived or the loanee and his sureties are not automatically redeemed of the liabilities to repay. The Financial Corporation is concerned with repayment of loan either from the property or persons offered as surety. Thus, a vehicle, which is subject matter of confiscation proceeding under the Act, 1872, being not available to the Orissa State Financial Corporation for adjustment of the unpaid loan, that does not at all bring out an anomalous situation so as to defeat the right of the Orissa State Financial Corporation. Agreement between the Orissa State Financial Corporation and the loanee is a pure and simple contract governed by the provisions of the Contract Act, 1872 read with the provisions in the Act, 1951 and its Rules. On the other hand, a confiscation proceeding under the Act, 1972 is punitive in nature for commission of a forest offence. Thus, by virtue of the provision in Section 56 read with Section 64 (2) of the Act, 1972, the action taken for confiscation of the vehicle cannot be extended to grant protection of the loan advanced by Orissa State Financial Corporation. By doing that it amounts to grant premium to the pick-pockets in as much as, by making payment of the confiscation amount in favour of the Orissa State Financial Corporation the loan burden of the accused of the forest offence is reduced to the extent of the sale proceeds of the vehicle. In other words, on payment of the sale proceeds of the confiscation proceeding to the Orissa State Financial Corporation towards discharge of the loan account of the accused of a forest offence, it would lead to a system to reward him by repayment of his loan. Then it does not become a penalty nor the action become punitive, but it remains as a reward to the accused of forest offence. Such a concept is totally not conceivable from any provision in the Act, 1972 or the Act, 1951. [AIR 2002 Orissa 130 Overruled]. -- STATE FINANCIAL CORPORATIONS ACT, 1951. 
Section 29; Discharge of loan  Orissa Forest Act (14 of 1972), Section 56  Confiscation of vehicle - Held, The Authorities under Section 56 of the Orissa Forest Act, 1972 are not obliged to release the vehicle from the confiscation proceeding or to pay the sale proceeds of the vehicle after the order of confiscation in favour of Orissa State Financial Corporation when such vehicles were purchased on being financed by the Orissa State Financial Corporation and the loan had not been liquidated by the date of the seizure/confiscation of the vehicle. Concept of first charge or second charge has no applicability when the vehicle is not otherwise disposed of to determine the liabilities of the loanee. On the other hand the vehicle having been found indulged in forest offences was made subject matter of a confiscation proceedings, and therefore, the procedure followed for confiscation of the vehicle and for its sale is punitive in nature and not with a view to give benefit to anybody including the Department which initiated the confiscation proceeding. Apart from that, the claim of the Orissa State Financial Corporation as against its loanee (who had taken the vehicle on hire- purchase agreement) brings the loanee and the sureties within the default clause under the State Financial Corporation Act, 1951 or the heirs and successors of such persons. Procedure is provided in the Act, 1951 and the Rules thereof about the manner in which such loan is to be recovered, and in that context only the vehicle under the hire-purchase agreement is placed as the first charge. If such property is not available for any reason, then the loan is not automatically waived or the loanee and his sureties are not automatically redeemed of the liabilities to repay. The Financial Corporation is concerned with repayment of loan either from the property or persons offered as surety. Thus, a vehicle, which is subject matter of confiscation proceeding under the Act, 1872, being not available to the Orissa State Financial Corporation for adjustment of the unpaid loan, that does not at all bring out an anomalous situation so as to defeat the right of the Orissa State Financial Corporation. Agreement between the Orissa State Financial Corporation and the loanee is a pure and simple contract governed by the provisions of the Contract Act, 1872 read with the provisions in the Act, 1951 and its Rules. On the other hand, a confiscation proceeding under the Act, 1972 is punitive in nature for commission of a forest offence. Thus, by virtue of the provision in Section 56 read with Section 64 (2) of the Act, 1972, the action taken for confiscation of the vehicle cannot be extended to grant protection of the loan advanced by Orissa State Financial Corporation. By doing that it amounts to grant premium to the pick-pockets in as much as, by making payment of the confiscation amount in favour of the Orissa State Financial Corporation the loan burden of the accused of the forest offence is reduced to the extent of the sale proceeds of the vehicle. In other words, on payment of the sale proceeds of the confiscation proceeding to the Orissa State Financial Corporation towards discharge of the loan account of the accused of a forest offence, it would lead to a system to reward him by repayment of his loan. Then it does not become a penalty nor the action become punitive, but it remains as a reward to the accused of forest offence. Such a concept is totally not conceivable from any provision in the Act, 1972 or the Act, 1951. [AIR 2002 Orissa 130 Overruled].  -  In that case, the stand of the Revenue was disapproved by the Orissa High Court. 16. Learned Counsel for the petitioner submitted that the photographs taken by the petitioner are not goods which can be sold and is not a marketable commodity like any other goods.',
			'caseanalysis' => null,
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			'judge' => ' A.K. Ganguly, C.J. and; B.N. Mahapatra, J.',
			'judgement' => '<p style="text-align: justify;">A.K. Ganguly, C.J.</p><p style="text-align: justify;">1. Initially three S.J.Cs. being S.J.C. Nos. 10 of 1997, 8 of 1997 and 9 of 1997 were filed and subsequently renumbered as STREV Nos. 212, 214 and 216 of 2007 respectively. In view of the common questions of facts and law, all the three Revision Applications are heard and disposed of together.</p><p style="text-align: justify;">2. The following questions of law arising out of the order passed by the Orissa Sales Tax Tribunal on 8.12.1993 in Second Appeal Nos. 3345 to 3350 of 1991-92 have been referred to this Hon'ble High Court in terms of the order of this Hon'ble Court dated 24.2.1997. The questions are:</p><p style="text-align: justify;">(i) Whether on the facts and in the circumstances of the case, the Tribunal is right to held that tax is exigible for photographs as execution of works contract ?</p><p style="text-align: justify;">(ii) Whether on the facts and in the circumstances of the case, the conclusion of the Tribunal is perverse due to non-consideration and mis-consideration of facts and law and, therefore, it is liable to be set aside for re-hearing ?</p><p style="text-align: justify;">3. The materials facts out of which those questions arise are that the petitioner carries on the business of processing and developing photography. In the usual course of business, the petitioner takes photographs of persons or of family and then develops the negative by employing his skill and labour and then supplies the photographs to the clients. These photographs which are prepared by the petitioner are not commercial items because they are neither purchased nor sold. However, to develop these photographs employment of skill and labour is essential. It may be mentioned that petitioner does not carry on any sale of photographs of national leaders, God and Goddess.</p><p style="text-align: justify;">4. After the passing of 46th amendment of the Constitution of India and consequent amendments thereto in Orissa Sales Tax Act (OST Act), the Sales Tax Officer, Bhubaneswar-II Circle, Bhubaneswar sent notices to assess the petitioner as an unregistered dealer under Section 12 (5) of the OST Act, inter alia, contending that the petitioner's activities can be called 'works contract'. Pursuant to said notice, the petitioner gave its reply and appeared before the Sales Tax Officer and produced the books of account and documents including Receipts, Purchase Memos, Vouchers, Ledger and thereby denied its liability under the OST Act. The petitioner also submitted objection petitions on various dates i.e. 28.12.1985, 10.1.1986, 20.2.1986 and 29.2.1988 contending, inter alia, that the petitioner has no sales tax liability under OST Act and the notices, which were issued, are without jurisdiction.</p><p style="text-align: justify;">5. Ignoring the said objections of the petitioner, the Sales Tax Officer, Bhubaneswar-II Circle, Bhubaneswar assessed the petitioner as an unregistered dealer, inter alia, holding that the petitioner is liable to pay sales tax as petitioner has been alleged to carry activities of 'works contract'. Therefore, orders of assessment being dated 29.2.1988 for the years 1984-85 (9/84 to 3/85), 1985-86 and 1986- 87 under Section 12(5) of OST Act and under Rule 5 of the Orissa Additional Sales Tax Rules, 1975 were passed and a tax of Rs. 20,765.00 and penalty of Rs. 5,000.00 totalling to Rs. 25,765.00 was imposed on the petitioner. The petitioner then filed the First Appeal before the learned Assistant Commissioner of Sales Tax. The First Appellate Authority by an order dated 27.9.1991 confirmed the levy of tax under the OST Act, but reduced the penalty to Rs. 1250.00. Thereupon, the petitioner filed the Second Appeal before the Orissa Sales Tax Tribunal, Cuttack. The said Tribunal heard the Second Appeal and in course of hearing, the petitioner raised various contentions. Ultimately, the Tribunal upheld the levy of tax but deleted the penalty.</p><p style="text-align: justify;">6. Thereafter the petitioner came up with a reference application under Section 24(1) of the Orissa Sales Tax Act framing certain questions for being referred to the Hon'ble High Court. The said prayer of the petitioner was rejected by the Tribunal. Then the petitioner moved Hon'ble High Court under Section 24(2)(b) of the Orissa Sales Tax Act, 1947 whereupon the High Court directed the Tribunal to state to case and refer the questions under Section 24(3) of the OST Act for a decision of the High Court.</p><p style="text-align: justify;">7. Accordingly, the Tribunal stated the case and referred the aforesaid questions for a decision of the High Court.</p><p style="text-align: justify;">8. Learned Counsel for the petitioner before the High Court submitted that in the transaction in question, there is no contract of sale between the petitioner and the client. It is only a contract of service and the photographs, which the petitioner produced by supplying the same has no commercial value and are not marketable. So, there is no question of a works contract. It is the consistent stand of the petitioner that the present photographs which are produced by the petitioner have no utility or value to any other person than the customer. By developing such photographs, the petitioner only renders service to his customers. The customer pays for the service rendered by the petitioner. It is the contention of the petitioner that his activity is similar to that of consulting firm preparing plan and sketches pursuant to client's specification or professional giving opinion on papers. All those activities are done to serve the client. Therefore, this does not come within the purview of the definition of 'goods', 'sale', 'dealer' or 'works contract'. It is the petitioner's case that he purchased the goods, namely, papers on payment of sales tax. Further levy of tax on the personal service rendered to the client of the petitioner will amount to double taxation. It is also the contention of the petitioner that the paper which is used in the photography are incidental and insignificant.</p><p style="text-align: justify;">9. In support of its contention, learned Counsel for the petitioner has relied on several judgments. First reliance was place on the judgment of the Supreme Court in the case of Sales Tax Officer v. B.C. Kame reported in 39 STC 237(SC). At page 241 of the report, learned Judges of the Supreme Court held that a photographer takes the photograph and develops the negatives and does other photographic work and thereafter supplies the prints to his client. By doing so he cannot be said to enter into a contract for sale of goods. On the other hand, the contract is for use of skill and labour by the photographer to bring about the desired result. Learned Judges held that the job of a photographer is a contract for work and labour and it is not a contract of sale.</p><p style="text-align: justify;">10. Reliance was also placed on a judgment of this High Court in the case of Photo Emporium v. Addl. District Magistrate reported in 77 STC 199 in which this High Court followed the ratio of the judgment of the Supreme Court in the case of B.C. Kame. In that case, the stand of the Revenue was disapproved by the Orissa High Court.</p><p style="text-align: justify;">11. Similar view was taken in 110 STC 145 in the case of Foto Colour Labs Pvt. Ltd. v. Commercial Taxes Officer where the Tribunal held that the transfer of paper in the photograph is purely incidental and payment is only taken to give positive prints and not to get the photo papers. Therefore, the contract in between the petitioner and his client is not a contract of sale, and neither directly or indirectly works contract is involved in the supply of photo papers. Similar view was taken by the West Bengal Taxation Tribunal in the case of Studio Kamalalaya v. Commercial Tax Officer reported in 89 STC 307.</p><p style="text-align: justify;">12. In the case of Bavens v. Onion of India report in 97 STC 161, learned Judges held that when a photographer takes a photograph of his customer, he develops the negative and supplies positive prints in the desired size to the customer. In doing so the photographer uses his own camera and his own film. The negative belongs to the photographer and not to the customer. No basic goods are provided by the customer which are subjected to processing by the photographer so as to make the contract a works contract. There is no accretion to goods or property or the nucleus of a property which belongs to the customer. It is the skill of the photographer which is most important to get the desired result.</p><p style="text-align: justify;">13. Hon'ble Karnataka High Court followed the same principle in the case of Keshoram Surlndranath Photo-mag Pvt. Ltd. v. Assistant Commissioner of Commercial Taxes reported in 121 STC 175. In that judgment, learned Judges of the Karnataka High Court relied on the judgment of the Supreme Court in B.C. Kame's case and came to the conclusion that in the job of the photographer in supplying positive prints to his customer, no works contract is involved and photographs are not marketable or saleable commodity and as such no tax can be levied on it.</p><p style="text-align: justify;">14. Against the said judgment of the Karnataka High Court, the State of Karnataka High Court filed a S.L.P. before the Hon'ble Supreme Court bearing SLP Nos. 6136-6163 of 2000 and the Hon'ble Supreme Court dismissed the SLP on 20th April, 2000.</p><p style="text-align: justify;">15. In the case of Rainbow Colour Lab v. State of M.P. learned Judges of the Hon'ble Supreme Court reiterated its judgment in B.C. Kame's case and came to the following conclusion:</p><p style="text-align: justify;">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.</p><p style="text-align: justify;">Hon'ble Supreme Court in Bharat Sanchar Nigam Ltd. v. Union of India reported in 145 STC 91 again reiterated the principle in B.C. Kame's case and held that the work done by the photographer is only in the nature of a service contract not involving any sale of goods and held that the stand taken by the State cannot be sustained.</p><p style="text-align: justify;">16. Learned Counsel for the petitioner submitted that the photographs taken by the petitioner are not goods which can be sold and is not a marketable commodity like any other goods. When the copies of photographs are made out, they have no utility or value to any other person than the customer. It is already admitted that the papers utilized for photographs are tax paid goods. Therefore, it is contended by the learned Counsel for the petitioner that the work of photography does not come within the purview of works contract as defined in Section 2(jj) of the Orissa Sales Tax Act.</p><p style="text-align: justify;">17. Learned Counsel for the Revenue in this case virtually did not contest the submission made by the learned Counsel for the petitioner and in support of his contention, learned Counsel for the Revenue relied on a decision of the Supreme Court in the case of Imagic Creative Pvt. Ltd. v. Commissioner of Commercial Taxes and Ors. reported in (2008) 10 RC 236. In that judgment, learned Judges held that since the contract in question is a service contract, it is difficult to hold that in a case of this nature, sales tax would be payable on the value of the entire contract irrespective of the element of service provided.</p><p style="text-align: justify;">For the reasons discussed above, we answer the first question in the negative and the second question, in the affirmative. We thus answer both the questions in favour of the assessee and against the Revenue.</p><p style="text-align: justify;">The three revision applications are thus disposed of.</p><p style="text-align: justify;">No costs.</p><p style="text-align: justify;">B.N. Mahapatra, J.</p><p style="text-align: justify;">18. I agree.<p style="text-align: justify;"></p><p style="text-align: justify;">',
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$title_for_layout = 'Studio Sujata Vs Commissioner of Sales Tax - Citation 531271 - Court Judgment | '
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	'Judgement' => array(
		'id' => '531271',
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		'appellant' => 'Studio Sujata',
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		'casename' => 'Studio Sujata Vs. Commissioner of Sales Tax',
		'casenote' => 'Sales Tax - Assessment - Contract of Sale - Section 12 (5) of Orissa Sales Tax 1947 - Petitioner carries on business of processing and developing photography - Revenue assessed petitioner under Section 12(5) of Act on ground that activities of petitioner can be called works contract - Petitioner approached to Assistant of Sales Tax on ground that there is no contract of sale between the petitioner and the client, it is only service - Dismissed and affirmed by Tribunal - Hence present petition - Whether Tribunal is right to held that tax is exigible for photographs as execution of works contract or not? - Held, as per precedent laid down by Supreme Court in case of Sales Tax Officer v. B.C. Kame that photographer takes photograph and develops negatives and does other photographic work and thereafter supplies prints to his client - By doing so he cannot be said to enter into contract for sale of goods - Therefore, job of photographer is contract for work and labour and it is not contract of sale - Revenue committed mistake in assessing petitioner under Section 12(5) of Act on basis of contract of sale - Petition disposed of accordingly  - STATE FINANCIAL CORPORATIONS ACT, 1951 [63/1951]. Section 29; [P.K. Tripathy, A.K. Parichha & N.Prusty, JJ] Discharge of loan  Orissa Forest Act (14 of 1972), Section 56  Confiscation of vehicle - Held, The Authorities under Section 56 of the Orissa Forest Act, 1972 are not obliged to release the vehicle from the confiscation proceeding or to pay the sale proceeds of the vehicle after the order of confiscation in favour of Orissa State Financial Corporation when such vehicles were purchased on being financed by the Orissa State Financial Corporation and the loan had not been liquidated by the date of the seizure/confiscation of the vehicle. Concept of first charge or second charge has no applicability when the vehicle is not otherwise disposed of to determine the liabilities of the loanee. On the other hand the vehicle having been found indulged in forest offences was made subject matter of a confiscation proceedings, and therefore, the procedure followed for confiscation of the vehicle and for its sale is punitive in nature and not with a view to give benefit to anybody including the Department which initiated the confiscation proceeding. Apart from that, the claim of the Orissa State Financial Corporation as against its loanee (who had taken the vehicle on hire- purchase agreement) brings the loanee and the sureties within the default clause under the State Financial Corporation Act, 1951 or the heirs and successors of such persons. Procedure is provided in the Act, 1951 and the Rules thereof about the manner in which such loan is to be recovered, and in that context only the vehicle under the hire-purchase agreement is placed as the first charge. If such property is not available for any reason, then the loan is not automatically waived or the loanee and his sureties are not automatically redeemed of the liabilities to repay. The Financial Corporation is concerned with repayment of loan either from the property or persons offered as surety. Thus, a vehicle, which is subject matter of confiscation proceeding under the Act, 1872, being not available to the Orissa State Financial Corporation for adjustment of the unpaid loan, that does not at all bring out an anomalous situation so as to defeat the right of the Orissa State Financial Corporation. Agreement between the Orissa State Financial Corporation and the loanee is a pure and simple contract governed by the provisions of the Contract Act, 1872 read with the provisions in the Act, 1951 and its Rules. On the other hand, a confiscation proceeding under the Act, 1972 is punitive in nature for commission of a forest offence. Thus, by virtue of the provision in Section 56 read with Section 64 (2) of the Act, 1972, the action taken for confiscation of the vehicle cannot be extended to grant protection of the loan advanced by Orissa State Financial Corporation. By doing that it amounts to grant premium to the pick-pockets in as much as, by making payment of the confiscation amount in favour of the Orissa State Financial Corporation the loan burden of the accused of the forest offence is reduced to the extent of the sale proceeds of the vehicle. In other words, on payment of the sale proceeds of the confiscation proceeding to the Orissa State Financial Corporation towards discharge of the loan account of the accused of a forest offence, it would lead to a system to reward him by repayment of his loan. Then it does not become a penalty nor the action become punitive, but it remains as a reward to the accused of forest offence. Such a concept is totally not conceivable from any provision in the Act, 1972 or the Act, 1951. [AIR 2002 Orissa 130 Overruled]. -- STATE FINANCIAL CORPORATIONS ACT, 1951. 
Section 29; Discharge of loan  Orissa Forest Act (14 of 1972), Section 56  Confiscation of vehicle - Held, The Authorities under Section 56 of the Orissa Forest Act, 1972 are not obliged to release the vehicle from the confiscation proceeding or to pay the sale proceeds of the vehicle after the order of confiscation in favour of Orissa State Financial Corporation when such vehicles were purchased on being financed by the Orissa State Financial Corporation and the loan had not been liquidated by the date of the seizure/confiscation of the vehicle. Concept of first charge or second charge has no applicability when the vehicle is not otherwise disposed of to determine the liabilities of the loanee. On the other hand the vehicle having been found indulged in forest offences was made subject matter of a confiscation proceedings, and therefore, the procedure followed for confiscation of the vehicle and for its sale is punitive in nature and not with a view to give benefit to anybody including the Department which initiated the confiscation proceeding. Apart from that, the claim of the Orissa State Financial Corporation as against its loanee (who had taken the vehicle on hire- purchase agreement) brings the loanee and the sureties within the default clause under the State Financial Corporation Act, 1951 or the heirs and successors of such persons. Procedure is provided in the Act, 1951 and the Rules thereof about the manner in which such loan is to be recovered, and in that context only the vehicle under the hire-purchase agreement is placed as the first charge. If such property is not available for any reason, then the loan is not automatically waived or the loanee and his sureties are not automatically redeemed of the liabilities to repay. The Financial Corporation is concerned with repayment of loan either from the property or persons offered as surety. Thus, a vehicle, which is subject matter of confiscation proceeding under the Act, 1872, being not available to the Orissa State Financial Corporation for adjustment of the unpaid loan, that does not at all bring out an anomalous situation so as to defeat the right of the Orissa State Financial Corporation. Agreement between the Orissa State Financial Corporation and the loanee is a pure and simple contract governed by the provisions of the Contract Act, 1872 read with the provisions in the Act, 1951 and its Rules. On the other hand, a confiscation proceeding under the Act, 1972 is punitive in nature for commission of a forest offence. Thus, by virtue of the provision in Section 56 read with Section 64 (2) of the Act, 1972, the action taken for confiscation of the vehicle cannot be extended to grant protection of the loan advanced by Orissa State Financial Corporation. By doing that it amounts to grant premium to the pick-pockets in as much as, by making payment of the confiscation amount in favour of the Orissa State Financial Corporation the loan burden of the accused of the forest offence is reduced to the extent of the sale proceeds of the vehicle. In other words, on payment of the sale proceeds of the confiscation proceeding to the Orissa State Financial Corporation towards discharge of the loan account of the accused of a forest offence, it would lead to a system to reward him by repayment of his loan. Then it does not become a penalty nor the action become punitive, but it remains as a reward to the accused of forest offence. Such a concept is totally not conceivable from any provision in the Act, 1972 or the Act, 1951. [AIR 2002 Orissa 130 Overruled].  -  In that case, the stand of the Revenue was disapproved by the Orissa High Court. 16. Learned Counsel for the petitioner submitted that the photographs taken by the petitioner are not goods which can be sold and is not a marketable commodity like any other goods.',
		'caseanalysis' => null,
		'casesref' => 'Imagic Creative Pvt. Ltd. v. Commissioner of Commercial Taxes and Ors.;',
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		'court' => 'Orissa',
		'court_type' => 'HC',
		'decidedon' => '2008-04-02',
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		'judge' => ' A.K. Ganguly, C.J. and; B.N. Mahapatra, J.',
		'judgement' => '<p>A.K. Ganguly, C.J.</p><p>1. Initially three S.J.Cs. being S.J.C. Nos. 10 of 1997, 8 of 1997 and 9 of 1997 were filed and subsequently renumbered as STREV Nos. 212, 214 and 216 of 2007 respectively. In view of the common questions of facts and law, all the three Revision Applications are heard and disposed of together.</p><p>2. The following questions of law arising out of the order passed by the Orissa Sales Tax Tribunal on 8.12.1993 in Second Appeal Nos. 3345 to 3350 of 1991-92 have been referred to this Hon'ble High Court in terms of the order of this Hon'ble Court dated 24.2.1997. The questions are:</p><p>(i) Whether on the facts and in the circumstances of the case, the Tribunal is right to held that tax is exigible for photographs as execution of works contract ?</p><p>(ii) Whether on the facts and in the circumstances of the case, the conclusion of the Tribunal is perverse due to non-consideration and mis-consideration of facts and law and, therefore, it is liable to be set aside for re-hearing ?</p><p>3. The materials facts out of which those questions arise are that the petitioner carries on the business of processing and developing photography. In the usual course of business, the petitioner takes photographs of persons or of family and then develops the negative by employing his skill and labour and then supplies the photographs to the clients. These photographs which are prepared by the petitioner are not commercial items because they are neither purchased nor sold. However, to develop these photographs employment of skill and labour is essential. It may be mentioned that petitioner does not carry on any sale of photographs of national leaders, God and Goddess.</p><p>4. After the passing of 46th amendment of the Constitution of India and consequent amendments thereto in Orissa Sales Tax Act (OST Act), the Sales Tax Officer, Bhubaneswar-II Circle, Bhubaneswar sent notices to assess the petitioner as an unregistered dealer under Section 12 (5) of the OST Act, inter alia, contending that the petitioner's activities can be called 'works contract'. Pursuant to said notice, the petitioner gave its reply and appeared before the Sales Tax Officer and produced the books of account and documents including Receipts, Purchase Memos, Vouchers, Ledger and thereby denied its liability under the OST Act. The petitioner also submitted objection petitions on various dates i.e. 28.12.1985, 10.1.1986, 20.2.1986 and 29.2.1988 contending, inter alia, that the petitioner has no sales tax liability under OST Act and the notices, which were issued, are without jurisdiction.</p><p>5. Ignoring the said objections of the petitioner, the Sales Tax Officer, Bhubaneswar-II Circle, Bhubaneswar assessed the petitioner as an unregistered dealer, inter alia, holding that the petitioner is liable to pay sales tax as petitioner has been alleged to carry activities of 'works contract'. Therefore, orders of assessment being dated 29.2.1988 for the years 1984-85 (9/84 to 3/85), 1985-86 and 1986- 87 under Section 12(5) of OST Act and under Rule 5 of the Orissa Additional Sales Tax Rules, 1975 were passed and a tax of Rs. 20,765.00 and penalty of Rs. 5,000.00 totalling to Rs. 25,765.00 was imposed on the petitioner. The petitioner then filed the First Appeal before the learned Assistant Commissioner of Sales Tax. The First Appellate Authority by an order dated 27.9.1991 confirmed the levy of tax under the OST Act, but reduced the penalty to Rs. 1250.00. Thereupon, the petitioner filed the Second Appeal before the Orissa Sales Tax Tribunal, Cuttack. The said Tribunal heard the Second Appeal and in course of hearing, the petitioner raised various contentions. Ultimately, the Tribunal upheld the levy of tax but deleted the penalty.</p><p>6. Thereafter the petitioner came up with a reference application under Section 24(1) of the Orissa Sales Tax Act framing certain questions for being referred to the Hon'ble High Court. The said prayer of the petitioner was rejected by the Tribunal. Then the petitioner moved Hon'ble High Court under Section 24(2)(b) of the Orissa Sales Tax Act, 1947 whereupon the High Court directed the Tribunal to state to case and refer the questions under Section 24(3) of the OST Act for a decision of the High Court.</p><p>7. Accordingly, the Tribunal stated the case and referred the aforesaid questions for a decision of the High Court.</p><p>8. Learned Counsel for the petitioner before the High Court submitted that in the transaction in question, there is no contract of sale between the petitioner and the client. It is only a contract of service and the photographs, which the petitioner produced by supplying the same has no commercial value and are not marketable. So, there is no question of a works contract. It is the consistent stand of the petitioner that the present photographs which are produced by the petitioner have no utility or value to any other person than the customer. By developing such photographs, the petitioner only renders service to his customers. The customer pays for the service rendered by the petitioner. It is the contention of the petitioner that his activity is similar to that of consulting firm preparing plan and sketches pursuant to client's specification or professional giving opinion on papers. All those activities are done to serve the client. Therefore, this does not come within the purview of the definition of 'goods', 'sale', 'dealer' or 'works contract'. It is the petitioner's case that he purchased the goods, namely, papers on payment of sales tax. Further levy of tax on the personal service rendered to the client of the petitioner will amount to double taxation. It is also the contention of the petitioner that the paper which is used in the photography are incidental and insignificant.</p><p>9. In support of its contention, learned Counsel for the petitioner has relied on several judgments. First reliance was place on the judgment of the Supreme Court in the case of Sales Tax Officer v. B.C. Kame reported in 39 STC 237(SC). At page 241 of the report, learned Judges of the Supreme Court held that a photographer takes the photograph and develops the negatives and does other photographic work and thereafter supplies the prints to his client. By doing so he cannot be said to enter into a contract for sale of goods. On the other hand, the contract is for use of skill and labour by the photographer to bring about the desired result. Learned Judges held that the job of a photographer is a contract for work and labour and it is not a contract of sale.</p><p>10. Reliance was also placed on a judgment of this High Court in the case of Photo Emporium v. Addl. District Magistrate reported in 77 STC 199 in which this High Court followed the ratio of the judgment of the Supreme Court in the case of B.C. Kame. In that case, the stand of the Revenue was disapproved by the Orissa High Court.</p><p>11. Similar view was taken in 110 STC 145 in the case of Foto Colour Labs Pvt. Ltd. v. Commercial Taxes Officer where the Tribunal held that the transfer of paper in the photograph is purely incidental and payment is only taken to give positive prints and not to get the photo papers. Therefore, the contract in between the petitioner and his client is not a contract of sale, and neither directly or indirectly works contract is involved in the supply of photo papers. Similar view was taken by the West Bengal Taxation Tribunal in the case of Studio Kamalalaya v. Commercial Tax Officer reported in 89 STC 307.</p><p>12. In the case of Bavens v. Onion of India report in 97 STC 161, learned Judges held that when a photographer takes a photograph of his customer, he develops the negative and supplies positive prints in the desired size to the customer. In doing so the photographer uses his own camera and his own film. The negative belongs to the photographer and not to the customer. No basic goods are provided by the customer which are subjected to processing by the photographer so as to make the contract a works contract. There is no accretion to goods or property or the nucleus of a property which belongs to the customer. It is the skill of the photographer which is most important to get the desired result.</p><p>13. Hon'ble Karnataka High Court followed the same principle in the case of Keshoram Surlndranath Photo-mag Pvt. Ltd. v. Assistant Commissioner of Commercial Taxes reported in 121 STC 175. In that judgment, learned Judges of the Karnataka High Court relied on the judgment of the Supreme Court in B.C. Kame's case and came to the conclusion that in the job of the photographer in supplying positive prints to his customer, no works contract is involved and photographs are not marketable or saleable commodity and as such no tax can be levied on it.</p><p>14. Against the said judgment of the Karnataka High Court, the State of Karnataka High Court filed a S.L.P. before the Hon'ble Supreme Court bearing SLP Nos. 6136-6163 of 2000 and the Hon'ble Supreme Court dismissed the SLP on 20th April, 2000.</p><p>15. In the case of Rainbow Colour Lab v. State of M.P. learned Judges of the Hon'ble Supreme Court reiterated its judgment in B.C. Kame's case and came to the following conclusion:</p><p>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.</p><p>Hon'ble Supreme Court in Bharat Sanchar Nigam Ltd. v. Union of India reported in 145 STC 91 again reiterated the principle in B.C. Kame's case and held that the work done by the photographer is only in the nature of a service contract not involving any sale of goods and held that the stand taken by the State cannot be sustained.</p><p>16. Learned Counsel for the petitioner submitted that the photographs taken by the petitioner are not goods which can be sold and is not a marketable commodity like any other goods. When the copies of photographs are made out, they have no utility or value to any other person than the customer. It is already admitted that the papers utilized for photographs are tax paid goods. Therefore, it is contended by the learned Counsel for the petitioner that the work of photography does not come within the purview of works contract as defined in Section 2(jj) of the Orissa Sales Tax Act.</p><p>17. Learned Counsel for the Revenue in this case virtually did not contest the submission made by the learned Counsel for the petitioner and in support of his contention, learned Counsel for the Revenue relied on a decision of the Supreme Court in the case of Imagic Creative Pvt. Ltd. v. Commissioner of Commercial Taxes and Ors. reported in (2008) 10 RC 236. In that judgment, learned Judges held that since the contract in question is a service contract, it is difficult to hold that in a case of this nature, sales tax would be payable on the value of the entire contract irrespective of the element of service provided.</p><p>For the reasons discussed above, we answer the first question in the negative and the second question, in the affirmative. We thus answer both the questions in favour of the assessee and against the Revenue.</p><p>The three revision applications are thus disposed of.</p><p>No costs.</p><p>B.N. Mahapatra, J.</p><p>18. I agree.<p></p><p>',
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	(int) 0 => '<p>A.K. Ganguly, C.J.',
	(int) 1 => '<p>1. Initially three S.J.Cs. being S.J.C. Nos. 10 of 1997, 8 of 1997 and 9 of 1997 were filed and subsequently renumbered as STREV Nos. 212, 214 and 216 of 2007 respectively. In view of the common questions of facts and law, all the three Revision Applications are heard and disposed of together.',
	(int) 2 => '<p>2. The following questions of law arising out of the order passed by the Orissa Sales Tax Tribunal on 8.12.1993 in Second Appeal Nos. 3345 to 3350 of 1991-92 have been referred to this Hon'ble High Court in terms of the order of this Hon'ble Court dated 24.2.1997. The questions are:',
	(int) 3 => '<p>(i) Whether on the facts and in the circumstances of the case, the Tribunal is right to held that tax is exigible for photographs as execution of works contract ?',
	(int) 4 => '<p>(ii) Whether on the facts and in the circumstances of the case, the conclusion of the Tribunal is perverse due to non-consideration and mis-consideration of facts and law and, therefore, it is liable to be set aside for re-hearing ?',
	(int) 5 => '<p>3. The materials facts out of which those questions arise are that the petitioner carries on the business of processing and developing photography. In the usual course of business, the petitioner takes photographs of persons or of family and then develops the negative by employing his skill and labour and then supplies the photographs to the clients. These photographs which are prepared by the petitioner are not commercial items because they are neither purchased nor sold. However, to develop these photographs employment of skill and labour is essential. It may be mentioned that petitioner does not carry on any sale of photographs of national leaders, God and Goddess.',
	(int) 6 => '<p>4. After the passing of 46th amendment of the Constitution of India and consequent amendments thereto in Orissa Sales Tax Act (OST Act), the Sales Tax Officer, Bhubaneswar-II Circle, Bhubaneswar sent notices to assess the petitioner as an unregistered dealer under Section 12 (5) of the OST Act, inter alia, contending that the petitioner's activities can be called 'works contract'. Pursuant to said notice, the petitioner gave its reply and appeared before the Sales Tax Officer and produced the books of account and documents including Receipts, Purchase Memos, Vouchers, Ledger and thereby denied its liability under the OST Act. The petitioner also submitted objection petitions on various dates i.e. 28.12.1985, 10.1.1986, 20.2.1986 and 29.2.1988 contending, inter alia, that the petitioner has no sales tax liability under OST Act and the notices, which were issued, are without jurisdiction.',
	(int) 7 => '<p>5. Ignoring the said objections of the petitioner, the Sales Tax Officer, Bhubaneswar-II Circle, Bhubaneswar assessed the petitioner as an unregistered dealer, inter alia, holding that the petitioner is liable to pay sales tax as petitioner has been alleged to carry activities of 'works contract'. Therefore, orders of assessment being dated 29.2.1988 for the years 1984-85 (9/84 to 3/85), 1985-86 and 1986- 87 under Section 12(5) of OST Act and under Rule 5 of the Orissa Additional Sales Tax Rules, 1975 were passed and a tax of Rs. 20,765.00 and penalty of Rs. 5,000.00 totalling to Rs. 25,765.00 was imposed on the petitioner. The petitioner then filed the First Appeal before the learned Assistant Commissioner of Sales Tax. The First Appellate Authority by an order dated 27.9.1991 confirmed the levy of tax under the OST Act, but reduced the penalty to Rs. 1250.00. Thereupon, the petitioner filed the Second Appeal before the Orissa Sales Tax Tribunal, Cuttack. The said Tribunal heard the Second Appeal and in course of hearing, the petitioner raised various contentions. Ultimately, the Tribunal upheld the levy of tax but deleted the penalty.',
	(int) 8 => '<p>6. Thereafter the petitioner came up with a reference application under Section 24(1) of the Orissa Sales Tax Act framing certain questions for being referred to the Hon'ble High Court. The said prayer of the petitioner was rejected by the Tribunal. Then the petitioner moved Hon'ble High Court under Section 24(2)(b) of the Orissa Sales Tax Act, 1947 whereupon the High Court directed the Tribunal to state to case and refer the questions under Section 24(3) of the OST Act for a decision of the High Court.',
	(int) 9 => '<p>7. Accordingly, the Tribunal stated the case and referred the aforesaid questions for a decision of the High Court.',
	(int) 10 => '<p>8. Learned Counsel for the petitioner before the High Court submitted that in the transaction in question, there is no contract of sale between the petitioner and the client. It is only a contract of service and the photographs, which the petitioner produced by supplying the same has no commercial value and are not marketable. So, there is no question of a works contract. It is the consistent stand of the petitioner that the present photographs which are produced by the petitioner have no utility or value to any other person than the customer. By developing such photographs, the petitioner only renders service to his customers. The customer pays for the service rendered by the petitioner. It is the contention of the petitioner that his activity is similar to that of consulting firm preparing plan and sketches pursuant to client's specification or professional giving opinion on papers. All those activities are done to serve the client. Therefore, this does not come within the purview of the definition of 'goods', 'sale', 'dealer' or 'works contract'. It is the petitioner's case that he purchased the goods, namely, papers on payment of sales tax. Further levy of tax on the personal service rendered to the client of the petitioner will amount to double taxation. It is also the contention of the petitioner that the paper which is used in the photography are incidental and insignificant.',
	(int) 11 => '<p>9. In support of its contention, learned Counsel for the petitioner has relied on several judgments. First reliance was place on the judgment of the Supreme Court in the case of Sales Tax Officer v. B.C. Kame reported in 39 STC 237(SC). At page 241 of the report, learned Judges of the Supreme Court held that a photographer takes the photograph and develops the negatives and does other photographic work and thereafter supplies the prints to his client. By doing so he cannot be said to enter into a contract for sale of goods. On the other hand, the contract is for use of skill and labour by the photographer to bring about the desired result. Learned Judges held that the job of a photographer is a contract for work and labour and it is not a contract of sale.',
	(int) 12 => '<p>10. Reliance was also placed on a judgment of this High Court in the case of Photo Emporium v. Addl. District Magistrate reported in 77 STC 199 in which this High Court followed the ratio of the judgment of the Supreme Court in the case of B.C. Kame. In that case, the stand of the Revenue was disapproved by the Orissa High Court.',
	(int) 13 => '<p>11. Similar view was taken in 110 STC 145 in the case of Foto Colour Labs Pvt. Ltd. v. Commercial Taxes Officer where the Tribunal held that the transfer of paper in the photograph is purely incidental and payment is only taken to give positive prints and not to get the photo papers. Therefore, the contract in between the petitioner and his client is not a contract of sale, and neither directly or indirectly works contract is involved in the supply of photo papers. Similar view was taken by the West Bengal Taxation Tribunal in the case of Studio Kamalalaya v. Commercial Tax Officer reported in 89 STC 307.',
	(int) 14 => '<p>12. In the case of Bavens v. Onion of India report in 97 STC 161, learned Judges held that when a photographer takes a photograph of his customer, he develops the negative and supplies positive prints in the desired size to the customer. In doing so the photographer uses his own camera and his own film. The negative belongs to the photographer and not to the customer. No basic goods are provided by the customer which are subjected to processing by the photographer so as to make the contract a works contract. There is no accretion to goods or property or the nucleus of a property which belongs to the customer. It is the skill of the photographer which is most important to get the desired result.',
	(int) 15 => '<p>13. Hon'ble Karnataka High Court followed the same principle in the case of Keshoram Surlndranath Photo-mag Pvt. Ltd. v. Assistant Commissioner of Commercial Taxes reported in 121 STC 175. In that judgment, learned Judges of the Karnataka High Court relied on the judgment of the Supreme Court in B.C. Kame's case and came to the conclusion that in the job of the photographer in supplying positive prints to his customer, no works contract is involved and photographs are not marketable or saleable commodity and as such no tax can be levied on it.',
	(int) 16 => '<p>14. Against the said judgment of the Karnataka High Court, the State of Karnataka High Court filed a S.L.P. before the Hon'ble Supreme Court bearing SLP Nos. 6136-6163 of 2000 and the Hon'ble Supreme Court dismissed the SLP on 20th April, 2000.',
	(int) 17 => '<p>15. In the case of Rainbow Colour Lab v. State of M.P. learned Judges of the Hon'ble Supreme Court reiterated its judgment in B.C. Kame's case and came to the following conclusion:',
	(int) 18 => '<p>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.',
	(int) 19 => '<p>Hon'ble Supreme Court in Bharat Sanchar Nigam Ltd. v. Union of India reported in 145 STC 91 again reiterated the principle in B.C. Kame's case and held that the work done by the photographer is only in the nature of a service contract not involving any sale of goods and held that the stand taken by the State cannot be sustained.',
	(int) 20 => '<p>16. Learned Counsel for the petitioner submitted that the photographs taken by the petitioner are not goods which can be sold and is not a marketable commodity like any other goods. When the copies of photographs are made out, they have no utility or value to any other person than the customer. It is already admitted that the papers utilized for photographs are tax paid goods. Therefore, it is contended by the learned Counsel for the petitioner that the work of photography does not come within the purview of works contract as defined in Section 2(jj) of the Orissa Sales Tax Act.',
	(int) 21 => '<p>17. Learned Counsel for the Revenue in this case virtually did not contest the submission made by the learned Counsel for the petitioner and in support of his contention, learned Counsel for the Revenue relied on a decision of the Supreme Court in the case of Imagic Creative Pvt. Ltd. v. Commissioner of Commercial Taxes and Ors. reported in (2008) 10 RC 236. In that judgment, learned Judges held that since the contract in question is a service contract, it is difficult to hold that in a case of this nature, sales tax would be payable on the value of the entire contract irrespective of the element of service provided.',
	(int) 22 => '<p>For the reasons discussed above, we answer the first question in the negative and the second question, in the affirmative. We thus answer both the questions in favour of the assessee and against the Revenue.',
	(int) 23 => '<p>The three revision applications are thus disposed of.',
	(int) 24 => '<p>No costs.',
	(int) 25 => '<p>B.N. Mahapatra, J.',
	(int) 26 => '<p>18. I agree.<p>',
	(int) 27 => '<p>'
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The three revision applications are thus disposed of.

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	'title_for_layout' => 'Studio Sujata Vs Commissioner of Sales Tax - Citation 531271 - Court Judgment | ',
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		'Judgement' => array(
			'id' => '531271',
			'acts' => '',
			'appealno' => '',
			'appellant' => 'Studio Sujata',
			'authreffered' => '',
			'casename' => 'Studio Sujata Vs. Commissioner of Sales Tax',
			'casenote' => 'Sales Tax - Assessment - Contract of Sale - Section 12 (5) of Orissa Sales Tax 1947 - Petitioner carries on business of processing and developing photography - Revenue assessed petitioner under Section 12(5) of Act on ground that activities of petitioner can be called works contract - Petitioner approached to Assistant of Sales Tax on ground that there is no contract of sale between the petitioner and the client, it is only service - Dismissed and affirmed by Tribunal - Hence present petition - Whether Tribunal is right to held that tax is exigible for photographs as execution of works contract or not? - Held, as per precedent laid down by Supreme Court in case of Sales Tax Officer v. B.C. Kame that photographer takes photograph and develops negatives and does other photographic work and thereafter supplies prints to his client - By doing so he cannot be said to enter into contract for sale of goods - Therefore, job of photographer is contract for work and labour and it is not contract of sale - Revenue committed mistake in assessing petitioner under Section 12(5) of Act on basis of contract of sale - Petition disposed of accordingly  - STATE FINANCIAL CORPORATIONS ACT, 1951 [63/1951]. Section 29; [P.K. Tripathy, A.K. Parichha & N.Prusty, JJ] Discharge of loan  Orissa Forest Act (14 of 1972), Section 56  Confiscation of vehicle - Held, The Authorities under Section 56 of the Orissa Forest Act, 1972 are not obliged to release the vehicle from the confiscation proceeding or to pay the sale proceeds of the vehicle after the order of confiscation in favour of Orissa State Financial Corporation when such vehicles were purchased on being financed by the Orissa State Financial Corporation and the loan had not been liquidated by the date of the seizure/confiscation of the vehicle. Concept of first charge or second charge has no applicability when the vehicle is not otherwise disposed of to determine the liabilities of the loanee. On the other hand the vehicle having been found indulged in forest offences was made subject matter of a confiscation proceedings, and therefore, the procedure followed for confiscation of the vehicle and for its sale is punitive in nature and not with a view to give benefit to anybody including the Department which initiated the confiscation proceeding. Apart from that, the claim of the Orissa State Financial Corporation as against its loanee (who had taken the vehicle on hire- purchase agreement) brings the loanee and the sureties within the default clause under the State Financial Corporation Act, 1951 or the heirs and successors of such persons. Procedure is provided in the Act, 1951 and the Rules thereof about the manner in which such loan is to be recovered, and in that context only the vehicle under the hire-purchase agreement is placed as the first charge. If such property is not available for any reason, then the loan is not automatically waived or the loanee and his sureties are not automatically redeemed of the liabilities to repay. The Financial Corporation is concerned with repayment of loan either from the property or persons offered as surety. Thus, a vehicle, which is subject matter of confiscation proceeding under the Act, 1872, being not available to the Orissa State Financial Corporation for adjustment of the unpaid loan, that does not at all bring out an anomalous situation so as to defeat the right of the Orissa State Financial Corporation. Agreement between the Orissa State Financial Corporation and the loanee is a pure and simple contract governed by the provisions of the Contract Act, 1872 read with the provisions in the Act, 1951 and its Rules. On the other hand, a confiscation proceeding under the Act, 1972 is punitive in nature for commission of a forest offence. Thus, by virtue of the provision in Section 56 read with Section 64 (2) of the Act, 1972, the action taken for confiscation of the vehicle cannot be extended to grant protection of the loan advanced by Orissa State Financial Corporation. By doing that it amounts to grant premium to the pick-pockets in as much as, by making payment of the confiscation amount in favour of the Orissa State Financial Corporation the loan burden of the accused of the forest offence is reduced to the extent of the sale proceeds of the vehicle. In other words, on payment of the sale proceeds of the confiscation proceeding to the Orissa State Financial Corporation towards discharge of the loan account of the accused of a forest offence, it would lead to a system to reward him by repayment of his loan. Then it does not become a penalty nor the action become punitive, but it remains as a reward to the accused of forest offence. Such a concept is totally not conceivable from any provision in the Act, 1972 or the Act, 1951. [AIR 2002 Orissa 130 Overruled]. -- STATE FINANCIAL CORPORATIONS ACT, 1951. 
Section 29; Discharge of loan  Orissa Forest Act (14 of 1972), Section 56  Confiscation of vehicle - Held, The Authorities under Section 56 of the Orissa Forest Act, 1972 are not obliged to release the vehicle from the confiscation proceeding or to pay the sale proceeds of the vehicle after the order of confiscation in favour of Orissa State Financial Corporation when such vehicles were purchased on being financed by the Orissa State Financial Corporation and the loan had not been liquidated by the date of the seizure/confiscation of the vehicle. Concept of first charge or second charge has no applicability when the vehicle is not otherwise disposed of to determine the liabilities of the loanee. On the other hand the vehicle having been found indulged in forest offences was made subject matter of a confiscation proceedings, and therefore, the procedure followed for confiscation of the vehicle and for its sale is punitive in nature and not with a view to give benefit to anybody including the Department which initiated the confiscation proceeding. Apart from that, the claim of the Orissa State Financial Corporation as against its loanee (who had taken the vehicle on hire- purchase agreement) brings the loanee and the sureties within the default clause under the State Financial Corporation Act, 1951 or the heirs and successors of such persons. Procedure is provided in the Act, 1951 and the Rules thereof about the manner in which such loan is to be recovered, and in that context only the vehicle under the hire-purchase agreement is placed as the first charge. If such property is not available for any reason, then the loan is not automatically waived or the loanee and his sureties are not automatically redeemed of the liabilities to repay. The Financial Corporation is concerned with repayment of loan either from the property or persons offered as surety. Thus, a vehicle, which is subject matter of confiscation proceeding under the Act, 1872, being not available to the Orissa State Financial Corporation for adjustment of the unpaid loan, that does not at all bring out an anomalous situation so as to defeat the right of the Orissa State Financial Corporation. Agreement between the Orissa State Financial Corporation and the loanee is a pure and simple contract governed by the provisions of the Contract Act, 1872 read with the provisions in the Act, 1951 and its Rules. On the other hand, a confiscation proceeding under the Act, 1972 is punitive in nature for commission of a forest offence. Thus, by virtue of the provision in Section 56 read with Section 64 (2) of the Act, 1972, the action taken for confiscation of the vehicle cannot be extended to grant protection of the loan advanced by Orissa State Financial Corporation. By doing that it amounts to grant premium to the pick-pockets in as much as, by making payment of the confiscation amount in favour of the Orissa State Financial Corporation the loan burden of the accused of the forest offence is reduced to the extent of the sale proceeds of the vehicle. In other words, on payment of the sale proceeds of the confiscation proceeding to the Orissa State Financial Corporation towards discharge of the loan account of the accused of a forest offence, it would lead to a system to reward him by repayment of his loan. Then it does not become a penalty nor the action become punitive, but it remains as a reward to the accused of forest offence. Such a concept is totally not conceivable from any provision in the Act, 1972 or the Act, 1951. [AIR 2002 Orissa 130 Overruled].  -  In that case, the stand of the Revenue was disapproved by the Orissa High Court. 16. Learned Counsel for the petitioner submitted that the photographs taken by the petitioner are not goods which can be sold and is not a marketable commodity like any other goods.',
			'caseanalysis' => null,
			'casesref' => 'Imagic Creative Pvt. Ltd. v. Commissioner of Commercial Taxes and Ors.;',
			'citingcases' => '',
			'counselplain' => '',
			'counseldef' => '',
			'court' => 'Orissa',
			'court_type' => 'HC',
			'decidedon' => '2008-04-02',
			'deposition' => '',
			'favorof' => null,
			'findings' => null,
			'judge' => ' A.K. Ganguly, C.J. and; B.N. Mahapatra, J.',
			'judgement' => '<p style="text-align: justify;">A.K. Ganguly, C.J.</p><p style="text-align: justify;">1. Initially three S.J.Cs. being S.J.C. Nos. 10 of 1997, 8 of 1997 and 9 of 1997 were filed and subsequently renumbered as STREV Nos. 212, 214 and 216 of 2007 respectively. In view of the common questions of facts and law, all the three Revision Applications are heard and disposed of together.</p><p style="text-align: justify;">2. The following questions of law arising out of the order passed by the Orissa Sales Tax Tribunal on 8.12.1993 in Second Appeal Nos. 3345 to 3350 of 1991-92 have been referred to this Hon'ble High Court in terms of the order of this Hon'ble Court dated 24.2.1997. The questions are:</p><p style="text-align: justify;">(i) Whether on the facts and in the circumstances of the case, the Tribunal is right to held that tax is exigible for photographs as execution of works contract ?</p><p style="text-align: justify;">(ii) Whether on the facts and in the circumstances of the case, the conclusion of the Tribunal is perverse due to non-consideration and mis-consideration of facts and law and, therefore, it is liable to be set aside for re-hearing ?</p><p style="text-align: justify;">3. The materials facts out of which those questions arise are that the petitioner carries on the business of processing and developing photography. In the usual course of business, the petitioner takes photographs of persons or of family and then develops the negative by employing his skill and labour and then supplies the photographs to the clients. These photographs which are prepared by the petitioner are not commercial items because they are neither purchased nor sold. However, to develop these photographs employment of skill and labour is essential. It may be mentioned that petitioner does not carry on any sale of photographs of national leaders, God and Goddess.</p><p style="text-align: justify;">4. After the passing of 46th amendment of the Constitution of India and consequent amendments thereto in Orissa Sales Tax Act (OST Act), the Sales Tax Officer, Bhubaneswar-II Circle, Bhubaneswar sent notices to assess the petitioner as an unregistered dealer under Section 12 (5) of the OST Act, inter alia, contending that the petitioner's activities can be called 'works contract'. Pursuant to said notice, the petitioner gave its reply and appeared before the Sales Tax Officer and produced the books of account and documents including Receipts, Purchase Memos, Vouchers, Ledger and thereby denied its liability under the OST Act. The petitioner also submitted objection petitions on various dates i.e. 28.12.1985, 10.1.1986, 20.2.1986 and 29.2.1988 contending, inter alia, that the petitioner has no sales tax liability under OST Act and the notices, which were issued, are without jurisdiction.</p><p style="text-align: justify;">5. Ignoring the said objections of the petitioner, the Sales Tax Officer, Bhubaneswar-II Circle, Bhubaneswar assessed the petitioner as an unregistered dealer, inter alia, holding that the petitioner is liable to pay sales tax as petitioner has been alleged to carry activities of 'works contract'. Therefore, orders of assessment being dated 29.2.1988 for the years 1984-85 (9/84 to 3/85), 1985-86 and 1986- 87 under Section 12(5) of OST Act and under Rule 5 of the Orissa Additional Sales Tax Rules, 1975 were passed and a tax of Rs. 20,765.00 and penalty of Rs. 5,000.00 totalling to Rs. 25,765.00 was imposed on the petitioner. The petitioner then filed the First Appeal before the learned Assistant Commissioner of Sales Tax. The First Appellate Authority by an order dated 27.9.1991 confirmed the levy of tax under the OST Act, but reduced the penalty to Rs. 1250.00. Thereupon, the petitioner filed the Second Appeal before the Orissa Sales Tax Tribunal, Cuttack. The said Tribunal heard the Second Appeal and in course of hearing, the petitioner raised various contentions. Ultimately, the Tribunal upheld the levy of tax but deleted the penalty.</p><p style="text-align: justify;">6. Thereafter the petitioner came up with a reference application under Section 24(1) of the Orissa Sales Tax Act framing certain questions for being referred to the Hon'ble High Court. The said prayer of the petitioner was rejected by the Tribunal. Then the petitioner moved Hon'ble High Court under Section 24(2)(b) of the Orissa Sales Tax Act, 1947 whereupon the High Court directed the Tribunal to state to case and refer the questions under Section 24(3) of the OST Act for a decision of the High Court.</p><p style="text-align: justify;">7. Accordingly, the Tribunal stated the case and referred the aforesaid questions for a decision of the High Court.</p><p style="text-align: justify;">8. Learned Counsel for the petitioner before the High Court submitted that in the transaction in question, there is no contract of sale between the petitioner and the client. It is only a contract of service and the photographs, which the petitioner produced by supplying the same has no commercial value and are not marketable. So, there is no question of a works contract. It is the consistent stand of the petitioner that the present photographs which are produced by the petitioner have no utility or value to any other person than the customer. By developing such photographs, the petitioner only renders service to his customers. The customer pays for the service rendered by the petitioner. It is the contention of the petitioner that his activity is similar to that of consulting firm preparing plan and sketches pursuant to client's specification or professional giving opinion on papers. All those activities are done to serve the client. Therefore, this does not come within the purview of the definition of 'goods', 'sale', 'dealer' or 'works contract'. It is the petitioner's case that he purchased the goods, namely, papers on payment of sales tax. Further levy of tax on the personal service rendered to the client of the petitioner will amount to double taxation. It is also the contention of the petitioner that the paper which is used in the photography are incidental and insignificant.</p><p style="text-align: justify;">9. In support of its contention, learned Counsel for the petitioner has relied on several judgments. First reliance was place on the judgment of the Supreme Court in the case of Sales Tax Officer v. B.C. Kame reported in 39 STC 237(SC). At page 241 of the report, learned Judges of the Supreme Court held that a photographer takes the photograph and develops the negatives and does other photographic work and thereafter supplies the prints to his client. By doing so he cannot be said to enter into a contract for sale of goods. On the other hand, the contract is for use of skill and labour by the photographer to bring about the desired result. Learned Judges held that the job of a photographer is a contract for work and labour and it is not a contract of sale.</p><p style="text-align: justify;">10. Reliance was also placed on a judgment of this High Court in the case of Photo Emporium v. Addl. District Magistrate reported in 77 STC 199 in which this High Court followed the ratio of the judgment of the Supreme Court in the case of B.C. Kame. In that case, the stand of the Revenue was disapproved by the Orissa High Court.</p><p style="text-align: justify;">11. Similar view was taken in 110 STC 145 in the case of Foto Colour Labs Pvt. Ltd. v. Commercial Taxes Officer where the Tribunal held that the transfer of paper in the photograph is purely incidental and payment is only taken to give positive prints and not to get the photo papers. Therefore, the contract in between the petitioner and his client is not a contract of sale, and neither directly or indirectly works contract is involved in the supply of photo papers. Similar view was taken by the West Bengal Taxation Tribunal in the case of Studio Kamalalaya v. Commercial Tax Officer reported in 89 STC 307.</p><p style="text-align: justify;">12. In the case of Bavens v. Onion of India report in 97 STC 161, learned Judges held that when a photographer takes a photograph of his customer, he develops the negative and supplies positive prints in the desired size to the customer. In doing so the photographer uses his own camera and his own film. The negative belongs to the photographer and not to the customer. No basic goods are provided by the customer which are subjected to processing by the photographer so as to make the contract a works contract. There is no accretion to goods or property or the nucleus of a property which belongs to the customer. It is the skill of the photographer which is most important to get the desired result.</p><p style="text-align: justify;">13. Hon'ble Karnataka High Court followed the same principle in the case of Keshoram Surlndranath Photo-mag Pvt. Ltd. v. Assistant Commissioner of Commercial Taxes reported in 121 STC 175. In that judgment, learned Judges of the Karnataka High Court relied on the judgment of the Supreme Court in B.C. Kame's case and came to the conclusion that in the job of the photographer in supplying positive prints to his customer, no works contract is involved and photographs are not marketable or saleable commodity and as such no tax can be levied on it.</p><p style="text-align: justify;">14. Against the said judgment of the Karnataka High Court, the State of Karnataka High Court filed a S.L.P. before the Hon'ble Supreme Court bearing SLP Nos. 6136-6163 of 2000 and the Hon'ble Supreme Court dismissed the SLP on 20th April, 2000.</p><p style="text-align: justify;">15. In the case of Rainbow Colour Lab v. State of M.P. learned Judges of the Hon'ble Supreme Court reiterated its judgment in B.C. Kame's case and came to the following conclusion:</p><p style="text-align: justify;">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.</p><p style="text-align: justify;">Hon'ble Supreme Court in Bharat Sanchar Nigam Ltd. v. Union of India reported in 145 STC 91 again reiterated the principle in B.C. Kame's case and held that the work done by the photographer is only in the nature of a service contract not involving any sale of goods and held that the stand taken by the State cannot be sustained.</p><p style="text-align: justify;">16. Learned Counsel for the petitioner submitted that the photographs taken by the petitioner are not goods which can be sold and is not a marketable commodity like any other goods. When the copies of photographs are made out, they have no utility or value to any other person than the customer. It is already admitted that the papers utilized for photographs are tax paid goods. Therefore, it is contended by the learned Counsel for the petitioner that the work of photography does not come within the purview of works contract as defined in Section 2(jj) of the Orissa Sales Tax Act.</p><p style="text-align: justify;">17. Learned Counsel for the Revenue in this case virtually did not contest the submission made by the learned Counsel for the petitioner and in support of his contention, learned Counsel for the Revenue relied on a decision of the Supreme Court in the case of Imagic Creative Pvt. Ltd. v. Commissioner of Commercial Taxes and Ors. reported in (2008) 10 RC 236. In that judgment, learned Judges held that since the contract in question is a service contract, it is difficult to hold that in a case of this nature, sales tax would be payable on the value of the entire contract irrespective of the element of service provided.</p><p style="text-align: justify;">For the reasons discussed above, we answer the first question in the negative and the second question, in the affirmative. We thus answer both the questions in favour of the assessee and against the Revenue.</p><p style="text-align: justify;">The three revision applications are thus disposed of.</p><p style="text-align: justify;">No costs.</p><p style="text-align: justify;">B.N. Mahapatra, J.</p><p style="text-align: justify;">18. I agree.<p style="text-align: justify;"></p><p style="text-align: justify;">',
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			'pubs' => '106(2008)CLT317; 2008(I)OLR953; (2008)17VST289(Orissa)',
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		'casename' => 'Studio Sujata Vs. Commissioner of Sales Tax',
		'casenote' => 'Sales Tax - Assessment - Contract of Sale - Section 12 (5) of Orissa Sales Tax 1947 - Petitioner carries on business of processing and developing photography - Revenue assessed petitioner under Section 12(5) of Act on ground that activities of petitioner can be called works contract - Petitioner approached to Assistant of Sales Tax on ground that there is no contract of sale between the petitioner and the client, it is only service - Dismissed and affirmed by Tribunal - Hence present petition - Whether Tribunal is right to held that tax is exigible for photographs as execution of works contract or not? - Held, as per precedent laid down by Supreme Court in case of Sales Tax Officer v. B.C. Kame that photographer takes photograph and develops negatives and does other photographic work and thereafter supplies prints to his client - By doing so he cannot be said to enter into contract for sale of goods - Therefore, job of photographer is contract for work and labour and it is not contract of sale - Revenue committed mistake in assessing petitioner under Section 12(5) of Act on basis of contract of sale - Petition disposed of accordingly  - STATE FINANCIAL CORPORATIONS ACT, 1951 [63/1951]. Section 29; [P.K. Tripathy, A.K. Parichha & N.Prusty, JJ] Discharge of loan  Orissa Forest Act (14 of 1972), Section 56  Confiscation of vehicle - Held, The Authorities under Section 56 of the Orissa Forest Act, 1972 are not obliged to release the vehicle from the confiscation proceeding or to pay the sale proceeds of the vehicle after the order of confiscation in favour of Orissa State Financial Corporation when such vehicles were purchased on being financed by the Orissa State Financial Corporation and the loan had not been liquidated by the date of the seizure/confiscation of the vehicle. Concept of first charge or second charge has no applicability when the vehicle is not otherwise disposed of to determine the liabilities of the loanee. On the other hand the vehicle having been found indulged in forest offences was made subject matter of a confiscation proceedings, and therefore, the procedure followed for confiscation of the vehicle and for its sale is punitive in nature and not with a view to give benefit to anybody including the Department which initiated the confiscation proceeding. Apart from that, the claim of the Orissa State Financial Corporation as against its loanee (who had taken the vehicle on hire- purchase agreement) brings the loanee and the sureties within the default clause under the State Financial Corporation Act, 1951 or the heirs and successors of such persons. Procedure is provided in the Act, 1951 and the Rules thereof about the manner in which such loan is to be recovered, and in that context only the vehicle under the hire-purchase agreement is placed as the first charge. If such property is not available for any reason, then the loan is not automatically waived or the loanee and his sureties are not automatically redeemed of the liabilities to repay. The Financial Corporation is concerned with repayment of loan either from the property or persons offered as surety. Thus, a vehicle, which is subject matter of confiscation proceeding under the Act, 1872, being not available to the Orissa State Financial Corporation for adjustment of the unpaid loan, that does not at all bring out an anomalous situation so as to defeat the right of the Orissa State Financial Corporation. Agreement between the Orissa State Financial Corporation and the loanee is a pure and simple contract governed by the provisions of the Contract Act, 1872 read with the provisions in the Act, 1951 and its Rules. On the other hand, a confiscation proceeding under the Act, 1972 is punitive in nature for commission of a forest offence. Thus, by virtue of the provision in Section 56 read with Section 64 (2) of the Act, 1972, the action taken for confiscation of the vehicle cannot be extended to grant protection of the loan advanced by Orissa State Financial Corporation. By doing that it amounts to grant premium to the pick-pockets in as much as, by making payment of the confiscation amount in favour of the Orissa State Financial Corporation the loan burden of the accused of the forest offence is reduced to the extent of the sale proceeds of the vehicle. In other words, on payment of the sale proceeds of the confiscation proceeding to the Orissa State Financial Corporation towards discharge of the loan account of the accused of a forest offence, it would lead to a system to reward him by repayment of his loan. Then it does not become a penalty nor the action become punitive, but it remains as a reward to the accused of forest offence. Such a concept is totally not conceivable from any provision in the Act, 1972 or the Act, 1951. [AIR 2002 Orissa 130 Overruled]. -- STATE FINANCIAL CORPORATIONS ACT, 1951. 
Section 29; Discharge of loan  Orissa Forest Act (14 of 1972), Section 56  Confiscation of vehicle - Held, The Authorities under Section 56 of the Orissa Forest Act, 1972 are not obliged to release the vehicle from the confiscation proceeding or to pay the sale proceeds of the vehicle after the order of confiscation in favour of Orissa State Financial Corporation when such vehicles were purchased on being financed by the Orissa State Financial Corporation and the loan had not been liquidated by the date of the seizure/confiscation of the vehicle. Concept of first charge or second charge has no applicability when the vehicle is not otherwise disposed of to determine the liabilities of the loanee. On the other hand the vehicle having been found indulged in forest offences was made subject matter of a confiscation proceedings, and therefore, the procedure followed for confiscation of the vehicle and for its sale is punitive in nature and not with a view to give benefit to anybody including the Department which initiated the confiscation proceeding. Apart from that, the claim of the Orissa State Financial Corporation as against its loanee (who had taken the vehicle on hire- purchase agreement) brings the loanee and the sureties within the default clause under the State Financial Corporation Act, 1951 or the heirs and successors of such persons. Procedure is provided in the Act, 1951 and the Rules thereof about the manner in which such loan is to be recovered, and in that context only the vehicle under the hire-purchase agreement is placed as the first charge. If such property is not available for any reason, then the loan is not automatically waived or the loanee and his sureties are not automatically redeemed of the liabilities to repay. The Financial Corporation is concerned with repayment of loan either from the property or persons offered as surety. Thus, a vehicle, which is subject matter of confiscation proceeding under the Act, 1872, being not available to the Orissa State Financial Corporation for adjustment of the unpaid loan, that does not at all bring out an anomalous situation so as to defeat the right of the Orissa State Financial Corporation. Agreement between the Orissa State Financial Corporation and the loanee is a pure and simple contract governed by the provisions of the Contract Act, 1872 read with the provisions in the Act, 1951 and its Rules. On the other hand, a confiscation proceeding under the Act, 1972 is punitive in nature for commission of a forest offence. Thus, by virtue of the provision in Section 56 read with Section 64 (2) of the Act, 1972, the action taken for confiscation of the vehicle cannot be extended to grant protection of the loan advanced by Orissa State Financial Corporation. By doing that it amounts to grant premium to the pick-pockets in as much as, by making payment of the confiscation amount in favour of the Orissa State Financial Corporation the loan burden of the accused of the forest offence is reduced to the extent of the sale proceeds of the vehicle. In other words, on payment of the sale proceeds of the confiscation proceeding to the Orissa State Financial Corporation towards discharge of the loan account of the accused of a forest offence, it would lead to a system to reward him by repayment of his loan. Then it does not become a penalty nor the action become punitive, but it remains as a reward to the accused of forest offence. Such a concept is totally not conceivable from any provision in the Act, 1972 or the Act, 1951. [AIR 2002 Orissa 130 Overruled].  -  In that case, the stand of the Revenue was disapproved by the Orissa High Court. 16. Learned Counsel for the petitioner submitted that the photographs taken by the petitioner are not goods which can be sold and is not a marketable commodity like any other goods.',
		'caseanalysis' => null,
		'casesref' => 'Imagic Creative Pvt. Ltd. v. Commissioner of Commercial Taxes and Ors.;',
		'citingcases' => '',
		'counselplain' => '',
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		'court' => 'Orissa',
		'court_type' => 'HC',
		'decidedon' => '2008-04-02',
		'deposition' => '',
		'favorof' => null,
		'findings' => null,
		'judge' => ' A.K. Ganguly, C.J. and; B.N. Mahapatra, J.',
		'judgement' => '<p>A.K. Ganguly, C.J.</p><p>1. Initially three S.J.Cs. being S.J.C. Nos. 10 of 1997, 8 of 1997 and 9 of 1997 were filed and subsequently renumbered as STREV Nos. 212, 214 and 216 of 2007 respectively. In view of the common questions of facts and law, all the three Revision Applications are heard and disposed of together.</p><p>2. The following questions of law arising out of the order passed by the Orissa Sales Tax Tribunal on 8.12.1993 in Second Appeal Nos. 3345 to 3350 of 1991-92 have been referred to this Hon'ble High Court in terms of the order of this Hon'ble Court dated 24.2.1997. The questions are:</p><p>(i) Whether on the facts and in the circumstances of the case, the Tribunal is right to held that tax is exigible for photographs as execution of works contract ?</p><p>(ii) Whether on the facts and in the circumstances of the case, the conclusion of the Tribunal is perverse due to non-consideration and mis-consideration of facts and law and, therefore, it is liable to be set aside for re-hearing ?</p><p>3. The materials facts out of which those questions arise are that the petitioner carries on the business of processing and developing photography. In the usual course of business, the petitioner takes photographs of persons or of family and then develops the negative by employing his skill and labour and then supplies the photographs to the clients. These photographs which are prepared by the petitioner are not commercial items because they are neither purchased nor sold. However, to develop these photographs employment of skill and labour is essential. It may be mentioned that petitioner does not carry on any sale of photographs of national leaders, God and Goddess.</p><p>4. After the passing of 46th amendment of the Constitution of India and consequent amendments thereto in Orissa Sales Tax Act (OST Act), the Sales Tax Officer, Bhubaneswar-II Circle, Bhubaneswar sent notices to assess the petitioner as an unregistered dealer under Section 12 (5) of the OST Act, inter alia, contending that the petitioner's activities can be called 'works contract'. Pursuant to said notice, the petitioner gave its reply and appeared before the Sales Tax Officer and produced the books of account and documents including Receipts, Purchase Memos, Vouchers, Ledger and thereby denied its liability under the OST Act. The petitioner also submitted objection petitions on various dates i.e. 28.12.1985, 10.1.1986, 20.2.1986 and 29.2.1988 contending, inter alia, that the petitioner has no sales tax liability under OST Act and the notices, which were issued, are without jurisdiction.</p><p>5. Ignoring the said objections of the petitioner, the Sales Tax Officer, Bhubaneswar-II Circle, Bhubaneswar assessed the petitioner as an unregistered dealer, inter alia, holding that the petitioner is liable to pay sales tax as petitioner has been alleged to carry activities of 'works contract'. Therefore, orders of assessment being dated 29.2.1988 for the years 1984-85 (9/84 to 3/85), 1985-86 and 1986- 87 under Section 12(5) of OST Act and under Rule 5 of the Orissa Additional Sales Tax Rules, 1975 were passed and a tax of Rs. 20,765.00 and penalty of Rs. 5,000.00 totalling to Rs. 25,765.00 was imposed on the petitioner. The petitioner then filed the First Appeal before the learned Assistant Commissioner of Sales Tax. The First Appellate Authority by an order dated 27.9.1991 confirmed the levy of tax under the OST Act, but reduced the penalty to Rs. 1250.00. Thereupon, the petitioner filed the Second Appeal before the Orissa Sales Tax Tribunal, Cuttack. The said Tribunal heard the Second Appeal and in course of hearing, the petitioner raised various contentions. Ultimately, the Tribunal upheld the levy of tax but deleted the penalty.</p><p>6. Thereafter the petitioner came up with a reference application under Section 24(1) of the Orissa Sales Tax Act framing certain questions for being referred to the Hon'ble High Court. The said prayer of the petitioner was rejected by the Tribunal. Then the petitioner moved Hon'ble High Court under Section 24(2)(b) of the Orissa Sales Tax Act, 1947 whereupon the High Court directed the Tribunal to state to case and refer the questions under Section 24(3) of the OST Act for a decision of the High Court.</p><p>7. Accordingly, the Tribunal stated the case and referred the aforesaid questions for a decision of the High Court.</p><p>8. Learned Counsel for the petitioner before the High Court submitted that in the transaction in question, there is no contract of sale between the petitioner and the client. It is only a contract of service and the photographs, which the petitioner produced by supplying the same has no commercial value and are not marketable. So, there is no question of a works contract. It is the consistent stand of the petitioner that the present photographs which are produced by the petitioner have no utility or value to any other person than the customer. By developing such photographs, the petitioner only renders service to his customers. The customer pays for the service rendered by the petitioner. It is the contention of the petitioner that his activity is similar to that of consulting firm preparing plan and sketches pursuant to client's specification or professional giving opinion on papers. All those activities are done to serve the client. Therefore, this does not come within the purview of the definition of 'goods', 'sale', 'dealer' or 'works contract'. It is the petitioner's case that he purchased the goods, namely, papers on payment of sales tax. Further levy of tax on the personal service rendered to the client of the petitioner will amount to double taxation. It is also the contention of the petitioner that the paper which is used in the photography are incidental and insignificant.</p><p>9. In support of its contention, learned Counsel for the petitioner has relied on several judgments. First reliance was place on the judgment of the Supreme Court in the case of Sales Tax Officer v. B.C. Kame reported in 39 STC 237(SC). At page 241 of the report, learned Judges of the Supreme Court held that a photographer takes the photograph and develops the negatives and does other photographic work and thereafter supplies the prints to his client. By doing so he cannot be said to enter into a contract for sale of goods. On the other hand, the contract is for use of skill and labour by the photographer to bring about the desired result. Learned Judges held that the job of a photographer is a contract for work and labour and it is not a contract of sale.</p><p>10. Reliance was also placed on a judgment of this High Court in the case of Photo Emporium v. Addl. District Magistrate reported in 77 STC 199 in which this High Court followed the ratio of the judgment of the Supreme Court in the case of B.C. Kame. In that case, the stand of the Revenue was disapproved by the Orissa High Court.</p><p>11. Similar view was taken in 110 STC 145 in the case of Foto Colour Labs Pvt. Ltd. v. Commercial Taxes Officer where the Tribunal held that the transfer of paper in the photograph is purely incidental and payment is only taken to give positive prints and not to get the photo papers. Therefore, the contract in between the petitioner and his client is not a contract of sale, and neither directly or indirectly works contract is involved in the supply of photo papers. Similar view was taken by the West Bengal Taxation Tribunal in the case of Studio Kamalalaya v. Commercial Tax Officer reported in 89 STC 307.</p><p>12. In the case of Bavens v. Onion of India report in 97 STC 161, learned Judges held that when a photographer takes a photograph of his customer, he develops the negative and supplies positive prints in the desired size to the customer. In doing so the photographer uses his own camera and his own film. The negative belongs to the photographer and not to the customer. No basic goods are provided by the customer which are subjected to processing by the photographer so as to make the contract a works contract. There is no accretion to goods or property or the nucleus of a property which belongs to the customer. It is the skill of the photographer which is most important to get the desired result.</p><p>13. Hon'ble Karnataka High Court followed the same principle in the case of Keshoram Surlndranath Photo-mag Pvt. Ltd. v. Assistant Commissioner of Commercial Taxes reported in 121 STC 175. In that judgment, learned Judges of the Karnataka High Court relied on the judgment of the Supreme Court in B.C. Kame's case and came to the conclusion that in the job of the photographer in supplying positive prints to his customer, no works contract is involved and photographs are not marketable or saleable commodity and as such no tax can be levied on it.</p><p>14. Against the said judgment of the Karnataka High Court, the State of Karnataka High Court filed a S.L.P. before the Hon'ble Supreme Court bearing SLP Nos. 6136-6163 of 2000 and the Hon'ble Supreme Court dismissed the SLP on 20th April, 2000.</p><p>15. In the case of Rainbow Colour Lab v. State of M.P. learned Judges of the Hon'ble Supreme Court reiterated its judgment in B.C. Kame's case and came to the following conclusion:</p><p>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.</p><p>Hon'ble Supreme Court in Bharat Sanchar Nigam Ltd. v. Union of India reported in 145 STC 91 again reiterated the principle in B.C. Kame's case and held that the work done by the photographer is only in the nature of a service contract not involving any sale of goods and held that the stand taken by the State cannot be sustained.</p><p>16. Learned Counsel for the petitioner submitted that the photographs taken by the petitioner are not goods which can be sold and is not a marketable commodity like any other goods. When the copies of photographs are made out, they have no utility or value to any other person than the customer. It is already admitted that the papers utilized for photographs are tax paid goods. Therefore, it is contended by the learned Counsel for the petitioner that the work of photography does not come within the purview of works contract as defined in Section 2(jj) of the Orissa Sales Tax Act.</p><p>17. Learned Counsel for the Revenue in this case virtually did not contest the submission made by the learned Counsel for the petitioner and in support of his contention, learned Counsel for the Revenue relied on a decision of the Supreme Court in the case of Imagic Creative Pvt. Ltd. v. Commissioner of Commercial Taxes and Ors. reported in (2008) 10 RC 236. In that judgment, learned Judges held that since the contract in question is a service contract, it is difficult to hold that in a case of this nature, sales tax would be payable on the value of the entire contract irrespective of the element of service provided.</p><p>For the reasons discussed above, we answer the first question in the negative and the second question, in the affirmative. We thus answer both the questions in favour of the assessee and against the Revenue.</p><p>The three revision applications are thus disposed of.</p><p>No costs.</p><p>B.N. Mahapatra, J.</p><p>18. I agree.<p></p><p>',
		'observations' => null,
		'overruledby' => null,
		'prhistory' => '',
		'pubs' => '106(2008)CLT317; 2008(I)OLR953; (2008)17VST289(Orissa)',
		'ratiodecidendi' => '',
		'respondent' => 'Commissioner of Sales Tax',
		'sub' => 'Sales Tax/VAT',
		'link' => null,
		'circuit' => null
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$casename_url = 'studio-sujata-vs-commissioner-sales-tax'
$args = array(
	(int) 0 => '531271',
	(int) 1 => 'studio-sujata-vs-commissioner-sales-tax'
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$url = 'https://sooperkanoon.com/case/amp/531271/studio-sujata-vs-commissioner-sales-tax'
$ctype = ' High Court'
$caseref = 'Imagic Creative Pvt. Ltd. v. Commissioner of Commercial Taxes and Ors.<br>'
$content = array(
	(int) 0 => '<p>A.K. Ganguly, C.J.',
	(int) 1 => '<p>1. Initially three S.J.Cs. being S.J.C. Nos. 10 of 1997, 8 of 1997 and 9 of 1997 were filed and subsequently renumbered as STREV Nos. 212, 214 and 216 of 2007 respectively. In view of the common questions of facts and law, all the three Revision Applications are heard and disposed of together.',
	(int) 2 => '<p>2. The following questions of law arising out of the order passed by the Orissa Sales Tax Tribunal on 8.12.1993 in Second Appeal Nos. 3345 to 3350 of 1991-92 have been referred to this Hon'ble High Court in terms of the order of this Hon'ble Court dated 24.2.1997. The questions are:',
	(int) 3 => '<p>(i) Whether on the facts and in the circumstances of the case, the Tribunal is right to held that tax is exigible for photographs as execution of works contract ?',
	(int) 4 => '<p>(ii) Whether on the facts and in the circumstances of the case, the conclusion of the Tribunal is perverse due to non-consideration and mis-consideration of facts and law and, therefore, it is liable to be set aside for re-hearing ?',
	(int) 5 => '<p>3. The materials facts out of which those questions arise are that the petitioner carries on the business of processing and developing photography. In the usual course of business, the petitioner takes photographs of persons or of family and then develops the negative by employing his skill and labour and then supplies the photographs to the clients. These photographs which are prepared by the petitioner are not commercial items because they are neither purchased nor sold. However, to develop these photographs employment of skill and labour is essential. It may be mentioned that petitioner does not carry on any sale of photographs of national leaders, God and Goddess.',
	(int) 6 => '<p>4. After the passing of 46th amendment of the Constitution of India and consequent amendments thereto in Orissa Sales Tax Act (OST Act), the Sales Tax Officer, Bhubaneswar-II Circle, Bhubaneswar sent notices to assess the petitioner as an unregistered dealer under Section 12 (5) of the OST Act, inter alia, contending that the petitioner's activities can be called 'works contract'. Pursuant to said notice, the petitioner gave its reply and appeared before the Sales Tax Officer and produced the books of account and documents including Receipts, Purchase Memos, Vouchers, Ledger and thereby denied its liability under the OST Act. The petitioner also submitted objection petitions on various dates i.e. 28.12.1985, 10.1.1986, 20.2.1986 and 29.2.1988 contending, inter alia, that the petitioner has no sales tax liability under OST Act and the notices, which were issued, are without jurisdiction.',
	(int) 7 => '<p>5. Ignoring the said objections of the petitioner, the Sales Tax Officer, Bhubaneswar-II Circle, Bhubaneswar assessed the petitioner as an unregistered dealer, inter alia, holding that the petitioner is liable to pay sales tax as petitioner has been alleged to carry activities of 'works contract'. Therefore, orders of assessment being dated 29.2.1988 for the years 1984-85 (9/84 to 3/85), 1985-86 and 1986- 87 under Section 12(5) of OST Act and under Rule 5 of the Orissa Additional Sales Tax Rules, 1975 were passed and a tax of Rs. 20,765.00 and penalty of Rs. 5,000.00 totalling to Rs. 25,765.00 was imposed on the petitioner. The petitioner then filed the First Appeal before the learned Assistant Commissioner of Sales Tax. The First Appellate Authority by an order dated 27.9.1991 confirmed the levy of tax under the OST Act, but reduced the penalty to Rs. 1250.00. Thereupon, the petitioner filed the Second Appeal before the Orissa Sales Tax Tribunal, Cuttack. The said Tribunal heard the Second Appeal and in course of hearing, the petitioner raised various contentions. Ultimately, the Tribunal upheld the levy of tax but deleted the penalty.',
	(int) 8 => '<p>6. Thereafter the petitioner came up with a reference application under Section 24(1) of the Orissa Sales Tax Act framing certain questions for being referred to the Hon'ble High Court. The said prayer of the petitioner was rejected by the Tribunal. Then the petitioner moved Hon'ble High Court under Section 24(2)(b) of the Orissa Sales Tax Act, 1947 whereupon the High Court directed the Tribunal to state to case and refer the questions under Section 24(3) of the OST Act for a decision of the High Court.',
	(int) 9 => '<p>7. Accordingly, the Tribunal stated the case and referred the aforesaid questions for a decision of the High Court.',
	(int) 10 => '<p>8. Learned Counsel for the petitioner before the High Court submitted that in the transaction in question, there is no contract of sale between the petitioner and the client. It is only a contract of service and the photographs, which the petitioner produced by supplying the same has no commercial value and are not marketable. So, there is no question of a works contract. It is the consistent stand of the petitioner that the present photographs which are produced by the petitioner have no utility or value to any other person than the customer. By developing such photographs, the petitioner only renders service to his customers. The customer pays for the service rendered by the petitioner. It is the contention of the petitioner that his activity is similar to that of consulting firm preparing plan and sketches pursuant to client's specification or professional giving opinion on papers. All those activities are done to serve the client. Therefore, this does not come within the purview of the definition of 'goods', 'sale', 'dealer' or 'works contract'. It is the petitioner's case that he purchased the goods, namely, papers on payment of sales tax. Further levy of tax on the personal service rendered to the client of the petitioner will amount to double taxation. It is also the contention of the petitioner that the paper which is used in the photography are incidental and insignificant.',
	(int) 11 => '<p>9. In support of its contention, learned Counsel for the petitioner has relied on several judgments. First reliance was place on the judgment of the Supreme Court in the case of Sales Tax Officer v. B.C. Kame reported in 39 STC 237(SC). At page 241 of the report, learned Judges of the Supreme Court held that a photographer takes the photograph and develops the negatives and does other photographic work and thereafter supplies the prints to his client. By doing so he cannot be said to enter into a contract for sale of goods. On the other hand, the contract is for use of skill and labour by the photographer to bring about the desired result. Learned Judges held that the job of a photographer is a contract for work and labour and it is not a contract of sale.',
	(int) 12 => '<p>10. Reliance was also placed on a judgment of this High Court in the case of Photo Emporium v. Addl. District Magistrate reported in 77 STC 199 in which this High Court followed the ratio of the judgment of the Supreme Court in the case of B.C. Kame. In that case, the stand of the Revenue was disapproved by the Orissa High Court.',
	(int) 13 => '<p>11. Similar view was taken in 110 STC 145 in the case of Foto Colour Labs Pvt. Ltd. v. Commercial Taxes Officer where the Tribunal held that the transfer of paper in the photograph is purely incidental and payment is only taken to give positive prints and not to get the photo papers. Therefore, the contract in between the petitioner and his client is not a contract of sale, and neither directly or indirectly works contract is involved in the supply of photo papers. Similar view was taken by the West Bengal Taxation Tribunal in the case of Studio Kamalalaya v. Commercial Tax Officer reported in 89 STC 307.',
	(int) 14 => '<p>12. In the case of Bavens v. Onion of India report in 97 STC 161, learned Judges held that when a photographer takes a photograph of his customer, he develops the negative and supplies positive prints in the desired size to the customer. In doing so the photographer uses his own camera and his own film. The negative belongs to the photographer and not to the customer. No basic goods are provided by the customer which are subjected to processing by the photographer so as to make the contract a works contract. There is no accretion to goods or property or the nucleus of a property which belongs to the customer. It is the skill of the photographer which is most important to get the desired result.',
	(int) 15 => '<p>13. Hon'ble Karnataka High Court followed the same principle in the case of Keshoram Surlndranath Photo-mag Pvt. Ltd. v. Assistant Commissioner of Commercial Taxes reported in 121 STC 175. In that judgment, learned Judges of the Karnataka High Court relied on the judgment of the Supreme Court in B.C. Kame's case and came to the conclusion that in the job of the photographer in supplying positive prints to his customer, no works contract is involved and photographs are not marketable or saleable commodity and as such no tax can be levied on it.',
	(int) 16 => '<p>14. Against the said judgment of the Karnataka High Court, the State of Karnataka High Court filed a S.L.P. before the Hon'ble Supreme Court bearing SLP Nos. 6136-6163 of 2000 and the Hon'ble Supreme Court dismissed the SLP on 20th April, 2000.',
	(int) 17 => '<p>15. In the case of Rainbow Colour Lab v. State of M.P. learned Judges of the Hon'ble Supreme Court reiterated its judgment in B.C. Kame's case and came to the following conclusion:',
	(int) 18 => '<p>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.',
	(int) 19 => '<p>Hon'ble Supreme Court in Bharat Sanchar Nigam Ltd. v. Union of India reported in 145 STC 91 again reiterated the principle in B.C. Kame's case and held that the work done by the photographer is only in the nature of a service contract not involving any sale of goods and held that the stand taken by the State cannot be sustained.',
	(int) 20 => '<p>16. Learned Counsel for the petitioner submitted that the photographs taken by the petitioner are not goods which can be sold and is not a marketable commodity like any other goods. When the copies of photographs are made out, they have no utility or value to any other person than the customer. It is already admitted that the papers utilized for photographs are tax paid goods. Therefore, it is contended by the learned Counsel for the petitioner that the work of photography does not come within the purview of works contract as defined in Section 2(jj) of the Orissa Sales Tax Act.',
	(int) 21 => '<p>17. Learned Counsel for the Revenue in this case virtually did not contest the submission made by the learned Counsel for the petitioner and in support of his contention, learned Counsel for the Revenue relied on a decision of the Supreme Court in the case of Imagic Creative Pvt. Ltd. v. Commissioner of Commercial Taxes and Ors. reported in (2008) 10 RC 236. In that judgment, learned Judges held that since the contract in question is a service contract, it is difficult to hold that in a case of this nature, sales tax would be payable on the value of the entire contract irrespective of the element of service provided.',
	(int) 22 => '<p>For the reasons discussed above, we answer the first question in the negative and the second question, in the affirmative. We thus answer both the questions in favour of the assessee and against the Revenue.',
	(int) 23 => '<p>The three revision applications are thus disposed of.',
	(int) 24 => '<p>No costs.',
	(int) 25 => '<p>B.N. Mahapatra, J.',
	(int) 26 => '<p>18. I agree.<p>',
	(int) 27 => '<p>'
)
$paragraphAfter = (int) 1
$cnt = (int) 28
$i = (int) 24
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No costs.

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			'appellant' => 'Studio Sujata',
			'authreffered' => '',
			'casename' => 'Studio Sujata Vs. Commissioner of Sales Tax',
			'casenote' => 'Sales Tax - Assessment - Contract of Sale - Section 12 (5) of Orissa Sales Tax 1947 - Petitioner carries on business of processing and developing photography - Revenue assessed petitioner under Section 12(5) of Act on ground that activities of petitioner can be called works contract - Petitioner approached to Assistant of Sales Tax on ground that there is no contract of sale between the petitioner and the client, it is only service - Dismissed and affirmed by Tribunal - Hence present petition - Whether Tribunal is right to held that tax is exigible for photographs as execution of works contract or not? - Held, as per precedent laid down by Supreme Court in case of Sales Tax Officer v. B.C. Kame that photographer takes photograph and develops negatives and does other photographic work and thereafter supplies prints to his client - By doing so he cannot be said to enter into contract for sale of goods - Therefore, job of photographer is contract for work and labour and it is not contract of sale - Revenue committed mistake in assessing petitioner under Section 12(5) of Act on basis of contract of sale - Petition disposed of accordingly  - STATE FINANCIAL CORPORATIONS ACT, 1951 [63/1951]. Section 29; [P.K. Tripathy, A.K. Parichha & N.Prusty, JJ] Discharge of loan  Orissa Forest Act (14 of 1972), Section 56  Confiscation of vehicle - Held, The Authorities under Section 56 of the Orissa Forest Act, 1972 are not obliged to release the vehicle from the confiscation proceeding or to pay the sale proceeds of the vehicle after the order of confiscation in favour of Orissa State Financial Corporation when such vehicles were purchased on being financed by the Orissa State Financial Corporation and the loan had not been liquidated by the date of the seizure/confiscation of the vehicle. Concept of first charge or second charge has no applicability when the vehicle is not otherwise disposed of to determine the liabilities of the loanee. On the other hand the vehicle having been found indulged in forest offences was made subject matter of a confiscation proceedings, and therefore, the procedure followed for confiscation of the vehicle and for its sale is punitive in nature and not with a view to give benefit to anybody including the Department which initiated the confiscation proceeding. Apart from that, the claim of the Orissa State Financial Corporation as against its loanee (who had taken the vehicle on hire- purchase agreement) brings the loanee and the sureties within the default clause under the State Financial Corporation Act, 1951 or the heirs and successors of such persons. Procedure is provided in the Act, 1951 and the Rules thereof about the manner in which such loan is to be recovered, and in that context only the vehicle under the hire-purchase agreement is placed as the first charge. If such property is not available for any reason, then the loan is not automatically waived or the loanee and his sureties are not automatically redeemed of the liabilities to repay. The Financial Corporation is concerned with repayment of loan either from the property or persons offered as surety. Thus, a vehicle, which is subject matter of confiscation proceeding under the Act, 1872, being not available to the Orissa State Financial Corporation for adjustment of the unpaid loan, that does not at all bring out an anomalous situation so as to defeat the right of the Orissa State Financial Corporation. Agreement between the Orissa State Financial Corporation and the loanee is a pure and simple contract governed by the provisions of the Contract Act, 1872 read with the provisions in the Act, 1951 and its Rules. On the other hand, a confiscation proceeding under the Act, 1972 is punitive in nature for commission of a forest offence. Thus, by virtue of the provision in Section 56 read with Section 64 (2) of the Act, 1972, the action taken for confiscation of the vehicle cannot be extended to grant protection of the loan advanced by Orissa State Financial Corporation. By doing that it amounts to grant premium to the pick-pockets in as much as, by making payment of the confiscation amount in favour of the Orissa State Financial Corporation the loan burden of the accused of the forest offence is reduced to the extent of the sale proceeds of the vehicle. In other words, on payment of the sale proceeds of the confiscation proceeding to the Orissa State Financial Corporation towards discharge of the loan account of the accused of a forest offence, it would lead to a system to reward him by repayment of his loan. Then it does not become a penalty nor the action become punitive, but it remains as a reward to the accused of forest offence. Such a concept is totally not conceivable from any provision in the Act, 1972 or the Act, 1951. [AIR 2002 Orissa 130 Overruled]. -- STATE FINANCIAL CORPORATIONS ACT, 1951. 
Section 29; Discharge of loan  Orissa Forest Act (14 of 1972), Section 56  Confiscation of vehicle - Held, The Authorities under Section 56 of the Orissa Forest Act, 1972 are not obliged to release the vehicle from the confiscation proceeding or to pay the sale proceeds of the vehicle after the order of confiscation in favour of Orissa State Financial Corporation when such vehicles were purchased on being financed by the Orissa State Financial Corporation and the loan had not been liquidated by the date of the seizure/confiscation of the vehicle. Concept of first charge or second charge has no applicability when the vehicle is not otherwise disposed of to determine the liabilities of the loanee. On the other hand the vehicle having been found indulged in forest offences was made subject matter of a confiscation proceedings, and therefore, the procedure followed for confiscation of the vehicle and for its sale is punitive in nature and not with a view to give benefit to anybody including the Department which initiated the confiscation proceeding. Apart from that, the claim of the Orissa State Financial Corporation as against its loanee (who had taken the vehicle on hire- purchase agreement) brings the loanee and the sureties within the default clause under the State Financial Corporation Act, 1951 or the heirs and successors of such persons. Procedure is provided in the Act, 1951 and the Rules thereof about the manner in which such loan is to be recovered, and in that context only the vehicle under the hire-purchase agreement is placed as the first charge. If such property is not available for any reason, then the loan is not automatically waived or the loanee and his sureties are not automatically redeemed of the liabilities to repay. The Financial Corporation is concerned with repayment of loan either from the property or persons offered as surety. Thus, a vehicle, which is subject matter of confiscation proceeding under the Act, 1872, being not available to the Orissa State Financial Corporation for adjustment of the unpaid loan, that does not at all bring out an anomalous situation so as to defeat the right of the Orissa State Financial Corporation. Agreement between the Orissa State Financial Corporation and the loanee is a pure and simple contract governed by the provisions of the Contract Act, 1872 read with the provisions in the Act, 1951 and its Rules. On the other hand, a confiscation proceeding under the Act, 1972 is punitive in nature for commission of a forest offence. Thus, by virtue of the provision in Section 56 read with Section 64 (2) of the Act, 1972, the action taken for confiscation of the vehicle cannot be extended to grant protection of the loan advanced by Orissa State Financial Corporation. By doing that it amounts to grant premium to the pick-pockets in as much as, by making payment of the confiscation amount in favour of the Orissa State Financial Corporation the loan burden of the accused of the forest offence is reduced to the extent of the sale proceeds of the vehicle. In other words, on payment of the sale proceeds of the confiscation proceeding to the Orissa State Financial Corporation towards discharge of the loan account of the accused of a forest offence, it would lead to a system to reward him by repayment of his loan. Then it does not become a penalty nor the action become punitive, but it remains as a reward to the accused of forest offence. Such a concept is totally not conceivable from any provision in the Act, 1972 or the Act, 1951. [AIR 2002 Orissa 130 Overruled].  -  In that case, the stand of the Revenue was disapproved by the Orissa High Court. 16. Learned Counsel for the petitioner submitted that the photographs taken by the petitioner are not goods which can be sold and is not a marketable commodity like any other goods.',
			'caseanalysis' => null,
			'casesref' => 'Imagic Creative Pvt. Ltd. v. Commissioner of Commercial Taxes and Ors.;',
			'citingcases' => '',
			'counselplain' => '',
			'counseldef' => '',
			'court' => 'Orissa',
			'court_type' => 'HC',
			'decidedon' => '2008-04-02',
			'deposition' => '',
			'favorof' => null,
			'findings' => null,
			'judge' => ' A.K. Ganguly, C.J. and; B.N. Mahapatra, J.',
			'judgement' => '<p style="text-align: justify;">A.K. Ganguly, C.J.</p><p style="text-align: justify;">1. Initially three S.J.Cs. being S.J.C. Nos. 10 of 1997, 8 of 1997 and 9 of 1997 were filed and subsequently renumbered as STREV Nos. 212, 214 and 216 of 2007 respectively. In view of the common questions of facts and law, all the three Revision Applications are heard and disposed of together.</p><p style="text-align: justify;">2. The following questions of law arising out of the order passed by the Orissa Sales Tax Tribunal on 8.12.1993 in Second Appeal Nos. 3345 to 3350 of 1991-92 have been referred to this Hon'ble High Court in terms of the order of this Hon'ble Court dated 24.2.1997. The questions are:</p><p style="text-align: justify;">(i) Whether on the facts and in the circumstances of the case, the Tribunal is right to held that tax is exigible for photographs as execution of works contract ?</p><p style="text-align: justify;">(ii) Whether on the facts and in the circumstances of the case, the conclusion of the Tribunal is perverse due to non-consideration and mis-consideration of facts and law and, therefore, it is liable to be set aside for re-hearing ?</p><p style="text-align: justify;">3. The materials facts out of which those questions arise are that the petitioner carries on the business of processing and developing photography. In the usual course of business, the petitioner takes photographs of persons or of family and then develops the negative by employing his skill and labour and then supplies the photographs to the clients. These photographs which are prepared by the petitioner are not commercial items because they are neither purchased nor sold. However, to develop these photographs employment of skill and labour is essential. It may be mentioned that petitioner does not carry on any sale of photographs of national leaders, God and Goddess.</p><p style="text-align: justify;">4. After the passing of 46th amendment of the Constitution of India and consequent amendments thereto in Orissa Sales Tax Act (OST Act), the Sales Tax Officer, Bhubaneswar-II Circle, Bhubaneswar sent notices to assess the petitioner as an unregistered dealer under Section 12 (5) of the OST Act, inter alia, contending that the petitioner's activities can be called 'works contract'. Pursuant to said notice, the petitioner gave its reply and appeared before the Sales Tax Officer and produced the books of account and documents including Receipts, Purchase Memos, Vouchers, Ledger and thereby denied its liability under the OST Act. The petitioner also submitted objection petitions on various dates i.e. 28.12.1985, 10.1.1986, 20.2.1986 and 29.2.1988 contending, inter alia, that the petitioner has no sales tax liability under OST Act and the notices, which were issued, are without jurisdiction.</p><p style="text-align: justify;">5. Ignoring the said objections of the petitioner, the Sales Tax Officer, Bhubaneswar-II Circle, Bhubaneswar assessed the petitioner as an unregistered dealer, inter alia, holding that the petitioner is liable to pay sales tax as petitioner has been alleged to carry activities of 'works contract'. Therefore, orders of assessment being dated 29.2.1988 for the years 1984-85 (9/84 to 3/85), 1985-86 and 1986- 87 under Section 12(5) of OST Act and under Rule 5 of the Orissa Additional Sales Tax Rules, 1975 were passed and a tax of Rs. 20,765.00 and penalty of Rs. 5,000.00 totalling to Rs. 25,765.00 was imposed on the petitioner. The petitioner then filed the First Appeal before the learned Assistant Commissioner of Sales Tax. The First Appellate Authority by an order dated 27.9.1991 confirmed the levy of tax under the OST Act, but reduced the penalty to Rs. 1250.00. Thereupon, the petitioner filed the Second Appeal before the Orissa Sales Tax Tribunal, Cuttack. The said Tribunal heard the Second Appeal and in course of hearing, the petitioner raised various contentions. Ultimately, the Tribunal upheld the levy of tax but deleted the penalty.</p><p style="text-align: justify;">6. Thereafter the petitioner came up with a reference application under Section 24(1) of the Orissa Sales Tax Act framing certain questions for being referred to the Hon'ble High Court. The said prayer of the petitioner was rejected by the Tribunal. Then the petitioner moved Hon'ble High Court under Section 24(2)(b) of the Orissa Sales Tax Act, 1947 whereupon the High Court directed the Tribunal to state to case and refer the questions under Section 24(3) of the OST Act for a decision of the High Court.</p><p style="text-align: justify;">7. Accordingly, the Tribunal stated the case and referred the aforesaid questions for a decision of the High Court.</p><p style="text-align: justify;">8. Learned Counsel for the petitioner before the High Court submitted that in the transaction in question, there is no contract of sale between the petitioner and the client. It is only a contract of service and the photographs, which the petitioner produced by supplying the same has no commercial value and are not marketable. So, there is no question of a works contract. It is the consistent stand of the petitioner that the present photographs which are produced by the petitioner have no utility or value to any other person than the customer. By developing such photographs, the petitioner only renders service to his customers. The customer pays for the service rendered by the petitioner. It is the contention of the petitioner that his activity is similar to that of consulting firm preparing plan and sketches pursuant to client's specification or professional giving opinion on papers. All those activities are done to serve the client. Therefore, this does not come within the purview of the definition of 'goods', 'sale', 'dealer' or 'works contract'. It is the petitioner's case that he purchased the goods, namely, papers on payment of sales tax. Further levy of tax on the personal service rendered to the client of the petitioner will amount to double taxation. It is also the contention of the petitioner that the paper which is used in the photography are incidental and insignificant.</p><p style="text-align: justify;">9. In support of its contention, learned Counsel for the petitioner has relied on several judgments. First reliance was place on the judgment of the Supreme Court in the case of Sales Tax Officer v. B.C. Kame reported in 39 STC 237(SC). At page 241 of the report, learned Judges of the Supreme Court held that a photographer takes the photograph and develops the negatives and does other photographic work and thereafter supplies the prints to his client. By doing so he cannot be said to enter into a contract for sale of goods. On the other hand, the contract is for use of skill and labour by the photographer to bring about the desired result. Learned Judges held that the job of a photographer is a contract for work and labour and it is not a contract of sale.</p><p style="text-align: justify;">10. Reliance was also placed on a judgment of this High Court in the case of Photo Emporium v. Addl. District Magistrate reported in 77 STC 199 in which this High Court followed the ratio of the judgment of the Supreme Court in the case of B.C. Kame. In that case, the stand of the Revenue was disapproved by the Orissa High Court.</p><p style="text-align: justify;">11. Similar view was taken in 110 STC 145 in the case of Foto Colour Labs Pvt. Ltd. v. Commercial Taxes Officer where the Tribunal held that the transfer of paper in the photograph is purely incidental and payment is only taken to give positive prints and not to get the photo papers. Therefore, the contract in between the petitioner and his client is not a contract of sale, and neither directly or indirectly works contract is involved in the supply of photo papers. Similar view was taken by the West Bengal Taxation Tribunal in the case of Studio Kamalalaya v. Commercial Tax Officer reported in 89 STC 307.</p><p style="text-align: justify;">12. In the case of Bavens v. Onion of India report in 97 STC 161, learned Judges held that when a photographer takes a photograph of his customer, he develops the negative and supplies positive prints in the desired size to the customer. In doing so the photographer uses his own camera and his own film. The negative belongs to the photographer and not to the customer. No basic goods are provided by the customer which are subjected to processing by the photographer so as to make the contract a works contract. There is no accretion to goods or property or the nucleus of a property which belongs to the customer. It is the skill of the photographer which is most important to get the desired result.</p><p style="text-align: justify;">13. Hon'ble Karnataka High Court followed the same principle in the case of Keshoram Surlndranath Photo-mag Pvt. Ltd. v. Assistant Commissioner of Commercial Taxes reported in 121 STC 175. In that judgment, learned Judges of the Karnataka High Court relied on the judgment of the Supreme Court in B.C. Kame's case and came to the conclusion that in the job of the photographer in supplying positive prints to his customer, no works contract is involved and photographs are not marketable or saleable commodity and as such no tax can be levied on it.</p><p style="text-align: justify;">14. Against the said judgment of the Karnataka High Court, the State of Karnataka High Court filed a S.L.P. before the Hon'ble Supreme Court bearing SLP Nos. 6136-6163 of 2000 and the Hon'ble Supreme Court dismissed the SLP on 20th April, 2000.</p><p style="text-align: justify;">15. In the case of Rainbow Colour Lab v. State of M.P. learned Judges of the Hon'ble Supreme Court reiterated its judgment in B.C. Kame's case and came to the following conclusion:</p><p style="text-align: justify;">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.</p><p style="text-align: justify;">Hon'ble Supreme Court in Bharat Sanchar Nigam Ltd. v. Union of India reported in 145 STC 91 again reiterated the principle in B.C. Kame's case and held that the work done by the photographer is only in the nature of a service contract not involving any sale of goods and held that the stand taken by the State cannot be sustained.</p><p style="text-align: justify;">16. Learned Counsel for the petitioner submitted that the photographs taken by the petitioner are not goods which can be sold and is not a marketable commodity like any other goods. When the copies of photographs are made out, they have no utility or value to any other person than the customer. It is already admitted that the papers utilized for photographs are tax paid goods. Therefore, it is contended by the learned Counsel for the petitioner that the work of photography does not come within the purview of works contract as defined in Section 2(jj) of the Orissa Sales Tax Act.</p><p style="text-align: justify;">17. Learned Counsel for the Revenue in this case virtually did not contest the submission made by the learned Counsel for the petitioner and in support of his contention, learned Counsel for the Revenue relied on a decision of the Supreme Court in the case of Imagic Creative Pvt. Ltd. v. Commissioner of Commercial Taxes and Ors. reported in (2008) 10 RC 236. In that judgment, learned Judges held that since the contract in question is a service contract, it is difficult to hold that in a case of this nature, sales tax would be payable on the value of the entire contract irrespective of the element of service provided.</p><p style="text-align: justify;">For the reasons discussed above, we answer the first question in the negative and the second question, in the affirmative. We thus answer both the questions in favour of the assessee and against the Revenue.</p><p style="text-align: justify;">The three revision applications are thus disposed of.</p><p style="text-align: justify;">No costs.</p><p style="text-align: justify;">B.N. Mahapatra, J.</p><p style="text-align: justify;">18. I agree.<p style="text-align: justify;"></p><p style="text-align: justify;">',
			'observations' => null,
			'overruledby' => null,
			'prhistory' => '',
			'pubs' => '106(2008)CLT317; 2008(I)OLR953; (2008)17VST289(Orissa)',
			'ratiodecidendi' => '',
			'respondent' => 'Commissioner of Sales Tax',
			'sub' => 'Sales Tax/VAT',
			'link' => null,
			'circuit' => null
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$title_for_layout = 'Studio Sujata Vs Commissioner of Sales Tax - Citation 531271 - Court Judgment | '
$desc = array(
	'Judgement' => array(
		'id' => '531271',
		'acts' => '',
		'appealno' => '',
		'appellant' => 'Studio Sujata',
		'authreffered' => '',
		'casename' => 'Studio Sujata Vs. Commissioner of Sales Tax',
		'casenote' => 'Sales Tax - Assessment - Contract of Sale - Section 12 (5) of Orissa Sales Tax 1947 - Petitioner carries on business of processing and developing photography - Revenue assessed petitioner under Section 12(5) of Act on ground that activities of petitioner can be called works contract - Petitioner approached to Assistant of Sales Tax on ground that there is no contract of sale between the petitioner and the client, it is only service - Dismissed and affirmed by Tribunal - Hence present petition - Whether Tribunal is right to held that tax is exigible for photographs as execution of works contract or not? - Held, as per precedent laid down by Supreme Court in case of Sales Tax Officer v. B.C. Kame that photographer takes photograph and develops negatives and does other photographic work and thereafter supplies prints to his client - By doing so he cannot be said to enter into contract for sale of goods - Therefore, job of photographer is contract for work and labour and it is not contract of sale - Revenue committed mistake in assessing petitioner under Section 12(5) of Act on basis of contract of sale - Petition disposed of accordingly  - STATE FINANCIAL CORPORATIONS ACT, 1951 [63/1951]. Section 29; [P.K. Tripathy, A.K. Parichha & N.Prusty, JJ] Discharge of loan  Orissa Forest Act (14 of 1972), Section 56  Confiscation of vehicle - Held, The Authorities under Section 56 of the Orissa Forest Act, 1972 are not obliged to release the vehicle from the confiscation proceeding or to pay the sale proceeds of the vehicle after the order of confiscation in favour of Orissa State Financial Corporation when such vehicles were purchased on being financed by the Orissa State Financial Corporation and the loan had not been liquidated by the date of the seizure/confiscation of the vehicle. Concept of first charge or second charge has no applicability when the vehicle is not otherwise disposed of to determine the liabilities of the loanee. On the other hand the vehicle having been found indulged in forest offences was made subject matter of a confiscation proceedings, and therefore, the procedure followed for confiscation of the vehicle and for its sale is punitive in nature and not with a view to give benefit to anybody including the Department which initiated the confiscation proceeding. Apart from that, the claim of the Orissa State Financial Corporation as against its loanee (who had taken the vehicle on hire- purchase agreement) brings the loanee and the sureties within the default clause under the State Financial Corporation Act, 1951 or the heirs and successors of such persons. Procedure is provided in the Act, 1951 and the Rules thereof about the manner in which such loan is to be recovered, and in that context only the vehicle under the hire-purchase agreement is placed as the first charge. If such property is not available for any reason, then the loan is not automatically waived or the loanee and his sureties are not automatically redeemed of the liabilities to repay. The Financial Corporation is concerned with repayment of loan either from the property or persons offered as surety. Thus, a vehicle, which is subject matter of confiscation proceeding under the Act, 1872, being not available to the Orissa State Financial Corporation for adjustment of the unpaid loan, that does not at all bring out an anomalous situation so as to defeat the right of the Orissa State Financial Corporation. Agreement between the Orissa State Financial Corporation and the loanee is a pure and simple contract governed by the provisions of the Contract Act, 1872 read with the provisions in the Act, 1951 and its Rules. On the other hand, a confiscation proceeding under the Act, 1972 is punitive in nature for commission of a forest offence. Thus, by virtue of the provision in Section 56 read with Section 64 (2) of the Act, 1972, the action taken for confiscation of the vehicle cannot be extended to grant protection of the loan advanced by Orissa State Financial Corporation. By doing that it amounts to grant premium to the pick-pockets in as much as, by making payment of the confiscation amount in favour of the Orissa State Financial Corporation the loan burden of the accused of the forest offence is reduced to the extent of the sale proceeds of the vehicle. In other words, on payment of the sale proceeds of the confiscation proceeding to the Orissa State Financial Corporation towards discharge of the loan account of the accused of a forest offence, it would lead to a system to reward him by repayment of his loan. Then it does not become a penalty nor the action become punitive, but it remains as a reward to the accused of forest offence. Such a concept is totally not conceivable from any provision in the Act, 1972 or the Act, 1951. [AIR 2002 Orissa 130 Overruled]. -- STATE FINANCIAL CORPORATIONS ACT, 1951. 
Section 29; Discharge of loan  Orissa Forest Act (14 of 1972), Section 56  Confiscation of vehicle - Held, The Authorities under Section 56 of the Orissa Forest Act, 1972 are not obliged to release the vehicle from the confiscation proceeding or to pay the sale proceeds of the vehicle after the order of confiscation in favour of Orissa State Financial Corporation when such vehicles were purchased on being financed by the Orissa State Financial Corporation and the loan had not been liquidated by the date of the seizure/confiscation of the vehicle. Concept of first charge or second charge has no applicability when the vehicle is not otherwise disposed of to determine the liabilities of the loanee. On the other hand the vehicle having been found indulged in forest offences was made subject matter of a confiscation proceedings, and therefore, the procedure followed for confiscation of the vehicle and for its sale is punitive in nature and not with a view to give benefit to anybody including the Department which initiated the confiscation proceeding. Apart from that, the claim of the Orissa State Financial Corporation as against its loanee (who had taken the vehicle on hire- purchase agreement) brings the loanee and the sureties within the default clause under the State Financial Corporation Act, 1951 or the heirs and successors of such persons. Procedure is provided in the Act, 1951 and the Rules thereof about the manner in which such loan is to be recovered, and in that context only the vehicle under the hire-purchase agreement is placed as the first charge. If such property is not available for any reason, then the loan is not automatically waived or the loanee and his sureties are not automatically redeemed of the liabilities to repay. The Financial Corporation is concerned with repayment of loan either from the property or persons offered as surety. Thus, a vehicle, which is subject matter of confiscation proceeding under the Act, 1872, being not available to the Orissa State Financial Corporation for adjustment of the unpaid loan, that does not at all bring out an anomalous situation so as to defeat the right of the Orissa State Financial Corporation. Agreement between the Orissa State Financial Corporation and the loanee is a pure and simple contract governed by the provisions of the Contract Act, 1872 read with the provisions in the Act, 1951 and its Rules. On the other hand, a confiscation proceeding under the Act, 1972 is punitive in nature for commission of a forest offence. Thus, by virtue of the provision in Section 56 read with Section 64 (2) of the Act, 1972, the action taken for confiscation of the vehicle cannot be extended to grant protection of the loan advanced by Orissa State Financial Corporation. By doing that it amounts to grant premium to the pick-pockets in as much as, by making payment of the confiscation amount in favour of the Orissa State Financial Corporation the loan burden of the accused of the forest offence is reduced to the extent of the sale proceeds of the vehicle. In other words, on payment of the sale proceeds of the confiscation proceeding to the Orissa State Financial Corporation towards discharge of the loan account of the accused of a forest offence, it would lead to a system to reward him by repayment of his loan. Then it does not become a penalty nor the action become punitive, but it remains as a reward to the accused of forest offence. Such a concept is totally not conceivable from any provision in the Act, 1972 or the Act, 1951. [AIR 2002 Orissa 130 Overruled].  -  In that case, the stand of the Revenue was disapproved by the Orissa High Court. 16. Learned Counsel for the petitioner submitted that the photographs taken by the petitioner are not goods which can be sold and is not a marketable commodity like any other goods.',
		'caseanalysis' => null,
		'casesref' => 'Imagic Creative Pvt. Ltd. v. Commissioner of Commercial Taxes and Ors.;',
		'citingcases' => '',
		'counselplain' => '',
		'counseldef' => '',
		'court' => 'Orissa',
		'court_type' => 'HC',
		'decidedon' => '2008-04-02',
		'deposition' => '',
		'favorof' => null,
		'findings' => null,
		'judge' => ' A.K. Ganguly, C.J. and; B.N. Mahapatra, J.',
		'judgement' => '<p>A.K. Ganguly, C.J.</p><p>1. Initially three S.J.Cs. being S.J.C. Nos. 10 of 1997, 8 of 1997 and 9 of 1997 were filed and subsequently renumbered as STREV Nos. 212, 214 and 216 of 2007 respectively. In view of the common questions of facts and law, all the three Revision Applications are heard and disposed of together.</p><p>2. The following questions of law arising out of the order passed by the Orissa Sales Tax Tribunal on 8.12.1993 in Second Appeal Nos. 3345 to 3350 of 1991-92 have been referred to this Hon'ble High Court in terms of the order of this Hon'ble Court dated 24.2.1997. The questions are:</p><p>(i) Whether on the facts and in the circumstances of the case, the Tribunal is right to held that tax is exigible for photographs as execution of works contract ?</p><p>(ii) Whether on the facts and in the circumstances of the case, the conclusion of the Tribunal is perverse due to non-consideration and mis-consideration of facts and law and, therefore, it is liable to be set aside for re-hearing ?</p><p>3. The materials facts out of which those questions arise are that the petitioner carries on the business of processing and developing photography. In the usual course of business, the petitioner takes photographs of persons or of family and then develops the negative by employing his skill and labour and then supplies the photographs to the clients. These photographs which are prepared by the petitioner are not commercial items because they are neither purchased nor sold. However, to develop these photographs employment of skill and labour is essential. It may be mentioned that petitioner does not carry on any sale of photographs of national leaders, God and Goddess.</p><p>4. After the passing of 46th amendment of the Constitution of India and consequent amendments thereto in Orissa Sales Tax Act (OST Act), the Sales Tax Officer, Bhubaneswar-II Circle, Bhubaneswar sent notices to assess the petitioner as an unregistered dealer under Section 12 (5) of the OST Act, inter alia, contending that the petitioner's activities can be called 'works contract'. Pursuant to said notice, the petitioner gave its reply and appeared before the Sales Tax Officer and produced the books of account and documents including Receipts, Purchase Memos, Vouchers, Ledger and thereby denied its liability under the OST Act. The petitioner also submitted objection petitions on various dates i.e. 28.12.1985, 10.1.1986, 20.2.1986 and 29.2.1988 contending, inter alia, that the petitioner has no sales tax liability under OST Act and the notices, which were issued, are without jurisdiction.</p><p>5. Ignoring the said objections of the petitioner, the Sales Tax Officer, Bhubaneswar-II Circle, Bhubaneswar assessed the petitioner as an unregistered dealer, inter alia, holding that the petitioner is liable to pay sales tax as petitioner has been alleged to carry activities of 'works contract'. Therefore, orders of assessment being dated 29.2.1988 for the years 1984-85 (9/84 to 3/85), 1985-86 and 1986- 87 under Section 12(5) of OST Act and under Rule 5 of the Orissa Additional Sales Tax Rules, 1975 were passed and a tax of Rs. 20,765.00 and penalty of Rs. 5,000.00 totalling to Rs. 25,765.00 was imposed on the petitioner. The petitioner then filed the First Appeal before the learned Assistant Commissioner of Sales Tax. The First Appellate Authority by an order dated 27.9.1991 confirmed the levy of tax under the OST Act, but reduced the penalty to Rs. 1250.00. Thereupon, the petitioner filed the Second Appeal before the Orissa Sales Tax Tribunal, Cuttack. The said Tribunal heard the Second Appeal and in course of hearing, the petitioner raised various contentions. Ultimately, the Tribunal upheld the levy of tax but deleted the penalty.</p><p>6. Thereafter the petitioner came up with a reference application under Section 24(1) of the Orissa Sales Tax Act framing certain questions for being referred to the Hon'ble High Court. The said prayer of the petitioner was rejected by the Tribunal. Then the petitioner moved Hon'ble High Court under Section 24(2)(b) of the Orissa Sales Tax Act, 1947 whereupon the High Court directed the Tribunal to state to case and refer the questions under Section 24(3) of the OST Act for a decision of the High Court.</p><p>7. Accordingly, the Tribunal stated the case and referred the aforesaid questions for a decision of the High Court.</p><p>8. Learned Counsel for the petitioner before the High Court submitted that in the transaction in question, there is no contract of sale between the petitioner and the client. It is only a contract of service and the photographs, which the petitioner produced by supplying the same has no commercial value and are not marketable. So, there is no question of a works contract. It is the consistent stand of the petitioner that the present photographs which are produced by the petitioner have no utility or value to any other person than the customer. By developing such photographs, the petitioner only renders service to his customers. The customer pays for the service rendered by the petitioner. It is the contention of the petitioner that his activity is similar to that of consulting firm preparing plan and sketches pursuant to client's specification or professional giving opinion on papers. All those activities are done to serve the client. Therefore, this does not come within the purview of the definition of 'goods', 'sale', 'dealer' or 'works contract'. It is the petitioner's case that he purchased the goods, namely, papers on payment of sales tax. Further levy of tax on the personal service rendered to the client of the petitioner will amount to double taxation. It is also the contention of the petitioner that the paper which is used in the photography are incidental and insignificant.</p><p>9. In support of its contention, learned Counsel for the petitioner has relied on several judgments. First reliance was place on the judgment of the Supreme Court in the case of Sales Tax Officer v. B.C. Kame reported in 39 STC 237(SC). At page 241 of the report, learned Judges of the Supreme Court held that a photographer takes the photograph and develops the negatives and does other photographic work and thereafter supplies the prints to his client. By doing so he cannot be said to enter into a contract for sale of goods. On the other hand, the contract is for use of skill and labour by the photographer to bring about the desired result. Learned Judges held that the job of a photographer is a contract for work and labour and it is not a contract of sale.</p><p>10. Reliance was also placed on a judgment of this High Court in the case of Photo Emporium v. Addl. District Magistrate reported in 77 STC 199 in which this High Court followed the ratio of the judgment of the Supreme Court in the case of B.C. Kame. In that case, the stand of the Revenue was disapproved by the Orissa High Court.</p><p>11. Similar view was taken in 110 STC 145 in the case of Foto Colour Labs Pvt. Ltd. v. Commercial Taxes Officer where the Tribunal held that the transfer of paper in the photograph is purely incidental and payment is only taken to give positive prints and not to get the photo papers. Therefore, the contract in between the petitioner and his client is not a contract of sale, and neither directly or indirectly works contract is involved in the supply of photo papers. Similar view was taken by the West Bengal Taxation Tribunal in the case of Studio Kamalalaya v. Commercial Tax Officer reported in 89 STC 307.</p><p>12. In the case of Bavens v. Onion of India report in 97 STC 161, learned Judges held that when a photographer takes a photograph of his customer, he develops the negative and supplies positive prints in the desired size to the customer. In doing so the photographer uses his own camera and his own film. The negative belongs to the photographer and not to the customer. No basic goods are provided by the customer which are subjected to processing by the photographer so as to make the contract a works contract. There is no accretion to goods or property or the nucleus of a property which belongs to the customer. It is the skill of the photographer which is most important to get the desired result.</p><p>13. Hon'ble Karnataka High Court followed the same principle in the case of Keshoram Surlndranath Photo-mag Pvt. Ltd. v. Assistant Commissioner of Commercial Taxes reported in 121 STC 175. In that judgment, learned Judges of the Karnataka High Court relied on the judgment of the Supreme Court in B.C. Kame's case and came to the conclusion that in the job of the photographer in supplying positive prints to his customer, no works contract is involved and photographs are not marketable or saleable commodity and as such no tax can be levied on it.</p><p>14. Against the said judgment of the Karnataka High Court, the State of Karnataka High Court filed a S.L.P. before the Hon'ble Supreme Court bearing SLP Nos. 6136-6163 of 2000 and the Hon'ble Supreme Court dismissed the SLP on 20th April, 2000.</p><p>15. In the case of Rainbow Colour Lab v. State of M.P. learned Judges of the Hon'ble Supreme Court reiterated its judgment in B.C. Kame's case and came to the following conclusion:</p><p>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.</p><p>Hon'ble Supreme Court in Bharat Sanchar Nigam Ltd. v. Union of India reported in 145 STC 91 again reiterated the principle in B.C. Kame's case and held that the work done by the photographer is only in the nature of a service contract not involving any sale of goods and held that the stand taken by the State cannot be sustained.</p><p>16. Learned Counsel for the petitioner submitted that the photographs taken by the petitioner are not goods which can be sold and is not a marketable commodity like any other goods. When the copies of photographs are made out, they have no utility or value to any other person than the customer. It is already admitted that the papers utilized for photographs are tax paid goods. Therefore, it is contended by the learned Counsel for the petitioner that the work of photography does not come within the purview of works contract as defined in Section 2(jj) of the Orissa Sales Tax Act.</p><p>17. Learned Counsel for the Revenue in this case virtually did not contest the submission made by the learned Counsel for the petitioner and in support of his contention, learned Counsel for the Revenue relied on a decision of the Supreme Court in the case of Imagic Creative Pvt. Ltd. v. Commissioner of Commercial Taxes and Ors. reported in (2008) 10 RC 236. In that judgment, learned Judges held that since the contract in question is a service contract, it is difficult to hold that in a case of this nature, sales tax would be payable on the value of the entire contract irrespective of the element of service provided.</p><p>For the reasons discussed above, we answer the first question in the negative and the second question, in the affirmative. We thus answer both the questions in favour of the assessee and against the Revenue.</p><p>The three revision applications are thus disposed of.</p><p>No costs.</p><p>B.N. Mahapatra, J.</p><p>18. I agree.<p></p><p>',
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		'pubs' => '106(2008)CLT317; 2008(I)OLR953; (2008)17VST289(Orissa)',
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	(int) 0 => '<p>A.K. Ganguly, C.J.',
	(int) 1 => '<p>1. Initially three S.J.Cs. being S.J.C. Nos. 10 of 1997, 8 of 1997 and 9 of 1997 were filed and subsequently renumbered as STREV Nos. 212, 214 and 216 of 2007 respectively. In view of the common questions of facts and law, all the three Revision Applications are heard and disposed of together.',
	(int) 2 => '<p>2. The following questions of law arising out of the order passed by the Orissa Sales Tax Tribunal on 8.12.1993 in Second Appeal Nos. 3345 to 3350 of 1991-92 have been referred to this Hon'ble High Court in terms of the order of this Hon'ble Court dated 24.2.1997. The questions are:',
	(int) 3 => '<p>(i) Whether on the facts and in the circumstances of the case, the Tribunal is right to held that tax is exigible for photographs as execution of works contract ?',
	(int) 4 => '<p>(ii) Whether on the facts and in the circumstances of the case, the conclusion of the Tribunal is perverse due to non-consideration and mis-consideration of facts and law and, therefore, it is liable to be set aside for re-hearing ?',
	(int) 5 => '<p>3. The materials facts out of which those questions arise are that the petitioner carries on the business of processing and developing photography. In the usual course of business, the petitioner takes photographs of persons or of family and then develops the negative by employing his skill and labour and then supplies the photographs to the clients. These photographs which are prepared by the petitioner are not commercial items because they are neither purchased nor sold. However, to develop these photographs employment of skill and labour is essential. It may be mentioned that petitioner does not carry on any sale of photographs of national leaders, God and Goddess.',
	(int) 6 => '<p>4. After the passing of 46th amendment of the Constitution of India and consequent amendments thereto in Orissa Sales Tax Act (OST Act), the Sales Tax Officer, Bhubaneswar-II Circle, Bhubaneswar sent notices to assess the petitioner as an unregistered dealer under Section 12 (5) of the OST Act, inter alia, contending that the petitioner's activities can be called 'works contract'. Pursuant to said notice, the petitioner gave its reply and appeared before the Sales Tax Officer and produced the books of account and documents including Receipts, Purchase Memos, Vouchers, Ledger and thereby denied its liability under the OST Act. The petitioner also submitted objection petitions on various dates i.e. 28.12.1985, 10.1.1986, 20.2.1986 and 29.2.1988 contending, inter alia, that the petitioner has no sales tax liability under OST Act and the notices, which were issued, are without jurisdiction.',
	(int) 7 => '<p>5. Ignoring the said objections of the petitioner, the Sales Tax Officer, Bhubaneswar-II Circle, Bhubaneswar assessed the petitioner as an unregistered dealer, inter alia, holding that the petitioner is liable to pay sales tax as petitioner has been alleged to carry activities of 'works contract'. Therefore, orders of assessment being dated 29.2.1988 for the years 1984-85 (9/84 to 3/85), 1985-86 and 1986- 87 under Section 12(5) of OST Act and under Rule 5 of the Orissa Additional Sales Tax Rules, 1975 were passed and a tax of Rs. 20,765.00 and penalty of Rs. 5,000.00 totalling to Rs. 25,765.00 was imposed on the petitioner. The petitioner then filed the First Appeal before the learned Assistant Commissioner of Sales Tax. The First Appellate Authority by an order dated 27.9.1991 confirmed the levy of tax under the OST Act, but reduced the penalty to Rs. 1250.00. Thereupon, the petitioner filed the Second Appeal before the Orissa Sales Tax Tribunal, Cuttack. The said Tribunal heard the Second Appeal and in course of hearing, the petitioner raised various contentions. Ultimately, the Tribunal upheld the levy of tax but deleted the penalty.',
	(int) 8 => '<p>6. Thereafter the petitioner came up with a reference application under Section 24(1) of the Orissa Sales Tax Act framing certain questions for being referred to the Hon'ble High Court. The said prayer of the petitioner was rejected by the Tribunal. Then the petitioner moved Hon'ble High Court under Section 24(2)(b) of the Orissa Sales Tax Act, 1947 whereupon the High Court directed the Tribunal to state to case and refer the questions under Section 24(3) of the OST Act for a decision of the High Court.',
	(int) 9 => '<p>7. Accordingly, the Tribunal stated the case and referred the aforesaid questions for a decision of the High Court.',
	(int) 10 => '<p>8. Learned Counsel for the petitioner before the High Court submitted that in the transaction in question, there is no contract of sale between the petitioner and the client. It is only a contract of service and the photographs, which the petitioner produced by supplying the same has no commercial value and are not marketable. So, there is no question of a works contract. It is the consistent stand of the petitioner that the present photographs which are produced by the petitioner have no utility or value to any other person than the customer. By developing such photographs, the petitioner only renders service to his customers. The customer pays for the service rendered by the petitioner. It is the contention of the petitioner that his activity is similar to that of consulting firm preparing plan and sketches pursuant to client's specification or professional giving opinion on papers. All those activities are done to serve the client. Therefore, this does not come within the purview of the definition of 'goods', 'sale', 'dealer' or 'works contract'. It is the petitioner's case that he purchased the goods, namely, papers on payment of sales tax. Further levy of tax on the personal service rendered to the client of the petitioner will amount to double taxation. It is also the contention of the petitioner that the paper which is used in the photography are incidental and insignificant.',
	(int) 11 => '<p>9. In support of its contention, learned Counsel for the petitioner has relied on several judgments. First reliance was place on the judgment of the Supreme Court in the case of Sales Tax Officer v. B.C. Kame reported in 39 STC 237(SC). At page 241 of the report, learned Judges of the Supreme Court held that a photographer takes the photograph and develops the negatives and does other photographic work and thereafter supplies the prints to his client. By doing so he cannot be said to enter into a contract for sale of goods. On the other hand, the contract is for use of skill and labour by the photographer to bring about the desired result. Learned Judges held that the job of a photographer is a contract for work and labour and it is not a contract of sale.',
	(int) 12 => '<p>10. Reliance was also placed on a judgment of this High Court in the case of Photo Emporium v. Addl. District Magistrate reported in 77 STC 199 in which this High Court followed the ratio of the judgment of the Supreme Court in the case of B.C. Kame. In that case, the stand of the Revenue was disapproved by the Orissa High Court.',
	(int) 13 => '<p>11. Similar view was taken in 110 STC 145 in the case of Foto Colour Labs Pvt. Ltd. v. Commercial Taxes Officer where the Tribunal held that the transfer of paper in the photograph is purely incidental and payment is only taken to give positive prints and not to get the photo papers. Therefore, the contract in between the petitioner and his client is not a contract of sale, and neither directly or indirectly works contract is involved in the supply of photo papers. Similar view was taken by the West Bengal Taxation Tribunal in the case of Studio Kamalalaya v. Commercial Tax Officer reported in 89 STC 307.',
	(int) 14 => '<p>12. In the case of Bavens v. Onion of India report in 97 STC 161, learned Judges held that when a photographer takes a photograph of his customer, he develops the negative and supplies positive prints in the desired size to the customer. In doing so the photographer uses his own camera and his own film. The negative belongs to the photographer and not to the customer. No basic goods are provided by the customer which are subjected to processing by the photographer so as to make the contract a works contract. There is no accretion to goods or property or the nucleus of a property which belongs to the customer. It is the skill of the photographer which is most important to get the desired result.',
	(int) 15 => '<p>13. Hon'ble Karnataka High Court followed the same principle in the case of Keshoram Surlndranath Photo-mag Pvt. Ltd. v. Assistant Commissioner of Commercial Taxes reported in 121 STC 175. In that judgment, learned Judges of the Karnataka High Court relied on the judgment of the Supreme Court in B.C. Kame's case and came to the conclusion that in the job of the photographer in supplying positive prints to his customer, no works contract is involved and photographs are not marketable or saleable commodity and as such no tax can be levied on it.',
	(int) 16 => '<p>14. Against the said judgment of the Karnataka High Court, the State of Karnataka High Court filed a S.L.P. before the Hon'ble Supreme Court bearing SLP Nos. 6136-6163 of 2000 and the Hon'ble Supreme Court dismissed the SLP on 20th April, 2000.',
	(int) 17 => '<p>15. In the case of Rainbow Colour Lab v. State of M.P. learned Judges of the Hon'ble Supreme Court reiterated its judgment in B.C. Kame's case and came to the following conclusion:',
	(int) 18 => '<p>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.',
	(int) 19 => '<p>Hon'ble Supreme Court in Bharat Sanchar Nigam Ltd. v. Union of India reported in 145 STC 91 again reiterated the principle in B.C. Kame's case and held that the work done by the photographer is only in the nature of a service contract not involving any sale of goods and held that the stand taken by the State cannot be sustained.',
	(int) 20 => '<p>16. Learned Counsel for the petitioner submitted that the photographs taken by the petitioner are not goods which can be sold and is not a marketable commodity like any other goods. When the copies of photographs are made out, they have no utility or value to any other person than the customer. It is already admitted that the papers utilized for photographs are tax paid goods. Therefore, it is contended by the learned Counsel for the petitioner that the work of photography does not come within the purview of works contract as defined in Section 2(jj) of the Orissa Sales Tax Act.',
	(int) 21 => '<p>17. Learned Counsel for the Revenue in this case virtually did not contest the submission made by the learned Counsel for the petitioner and in support of his contention, learned Counsel for the Revenue relied on a decision of the Supreme Court in the case of Imagic Creative Pvt. Ltd. v. Commissioner of Commercial Taxes and Ors. reported in (2008) 10 RC 236. In that judgment, learned Judges held that since the contract in question is a service contract, it is difficult to hold that in a case of this nature, sales tax would be payable on the value of the entire contract irrespective of the element of service provided.',
	(int) 22 => '<p>For the reasons discussed above, we answer the first question in the negative and the second question, in the affirmative. We thus answer both the questions in favour of the assessee and against the Revenue.',
	(int) 23 => '<p>The three revision applications are thus disposed of.',
	(int) 24 => '<p>No costs.',
	(int) 25 => '<p>B.N. Mahapatra, J.',
	(int) 26 => '<p>18. I agree.<p>',
	(int) 27 => '<p>'
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B.N. Mahapatra, J.

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	'title_for_layout' => 'Studio Sujata Vs Commissioner of Sales Tax - Citation 531271 - Court Judgment | ',
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		'Judgement' => array(
			'id' => '531271',
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			'appellant' => 'Studio Sujata',
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			'casename' => 'Studio Sujata Vs. Commissioner of Sales Tax',
			'casenote' => 'Sales Tax - Assessment - Contract of Sale - Section 12 (5) of Orissa Sales Tax 1947 - Petitioner carries on business of processing and developing photography - Revenue assessed petitioner under Section 12(5) of Act on ground that activities of petitioner can be called works contract - Petitioner approached to Assistant of Sales Tax on ground that there is no contract of sale between the petitioner and the client, it is only service - Dismissed and affirmed by Tribunal - Hence present petition - Whether Tribunal is right to held that tax is exigible for photographs as execution of works contract or not? - Held, as per precedent laid down by Supreme Court in case of Sales Tax Officer v. B.C. Kame that photographer takes photograph and develops negatives and does other photographic work and thereafter supplies prints to his client - By doing so he cannot be said to enter into contract for sale of goods - Therefore, job of photographer is contract for work and labour and it is not contract of sale - Revenue committed mistake in assessing petitioner under Section 12(5) of Act on basis of contract of sale - Petition disposed of accordingly  - STATE FINANCIAL CORPORATIONS ACT, 1951 [63/1951]. Section 29; [P.K. Tripathy, A.K. Parichha & N.Prusty, JJ] Discharge of loan  Orissa Forest Act (14 of 1972), Section 56  Confiscation of vehicle - Held, The Authorities under Section 56 of the Orissa Forest Act, 1972 are not obliged to release the vehicle from the confiscation proceeding or to pay the sale proceeds of the vehicle after the order of confiscation in favour of Orissa State Financial Corporation when such vehicles were purchased on being financed by the Orissa State Financial Corporation and the loan had not been liquidated by the date of the seizure/confiscation of the vehicle. Concept of first charge or second charge has no applicability when the vehicle is not otherwise disposed of to determine the liabilities of the loanee. On the other hand the vehicle having been found indulged in forest offences was made subject matter of a confiscation proceedings, and therefore, the procedure followed for confiscation of the vehicle and for its sale is punitive in nature and not with a view to give benefit to anybody including the Department which initiated the confiscation proceeding. Apart from that, the claim of the Orissa State Financial Corporation as against its loanee (who had taken the vehicle on hire- purchase agreement) brings the loanee and the sureties within the default clause under the State Financial Corporation Act, 1951 or the heirs and successors of such persons. Procedure is provided in the Act, 1951 and the Rules thereof about the manner in which such loan is to be recovered, and in that context only the vehicle under the hire-purchase agreement is placed as the first charge. If such property is not available for any reason, then the loan is not automatically waived or the loanee and his sureties are not automatically redeemed of the liabilities to repay. The Financial Corporation is concerned with repayment of loan either from the property or persons offered as surety. Thus, a vehicle, which is subject matter of confiscation proceeding under the Act, 1872, being not available to the Orissa State Financial Corporation for adjustment of the unpaid loan, that does not at all bring out an anomalous situation so as to defeat the right of the Orissa State Financial Corporation. Agreement between the Orissa State Financial Corporation and the loanee is a pure and simple contract governed by the provisions of the Contract Act, 1872 read with the provisions in the Act, 1951 and its Rules. On the other hand, a confiscation proceeding under the Act, 1972 is punitive in nature for commission of a forest offence. Thus, by virtue of the provision in Section 56 read with Section 64 (2) of the Act, 1972, the action taken for confiscation of the vehicle cannot be extended to grant protection of the loan advanced by Orissa State Financial Corporation. By doing that it amounts to grant premium to the pick-pockets in as much as, by making payment of the confiscation amount in favour of the Orissa State Financial Corporation the loan burden of the accused of the forest offence is reduced to the extent of the sale proceeds of the vehicle. In other words, on payment of the sale proceeds of the confiscation proceeding to the Orissa State Financial Corporation towards discharge of the loan account of the accused of a forest offence, it would lead to a system to reward him by repayment of his loan. Then it does not become a penalty nor the action become punitive, but it remains as a reward to the accused of forest offence. Such a concept is totally not conceivable from any provision in the Act, 1972 or the Act, 1951. [AIR 2002 Orissa 130 Overruled]. -- STATE FINANCIAL CORPORATIONS ACT, 1951. 
Section 29; Discharge of loan  Orissa Forest Act (14 of 1972), Section 56  Confiscation of vehicle - Held, The Authorities under Section 56 of the Orissa Forest Act, 1972 are not obliged to release the vehicle from the confiscation proceeding or to pay the sale proceeds of the vehicle after the order of confiscation in favour of Orissa State Financial Corporation when such vehicles were purchased on being financed by the Orissa State Financial Corporation and the loan had not been liquidated by the date of the seizure/confiscation of the vehicle. Concept of first charge or second charge has no applicability when the vehicle is not otherwise disposed of to determine the liabilities of the loanee. On the other hand the vehicle having been found indulged in forest offences was made subject matter of a confiscation proceedings, and therefore, the procedure followed for confiscation of the vehicle and for its sale is punitive in nature and not with a view to give benefit to anybody including the Department which initiated the confiscation proceeding. Apart from that, the claim of the Orissa State Financial Corporation as against its loanee (who had taken the vehicle on hire- purchase agreement) brings the loanee and the sureties within the default clause under the State Financial Corporation Act, 1951 or the heirs and successors of such persons. Procedure is provided in the Act, 1951 and the Rules thereof about the manner in which such loan is to be recovered, and in that context only the vehicle under the hire-purchase agreement is placed as the first charge. If such property is not available for any reason, then the loan is not automatically waived or the loanee and his sureties are not automatically redeemed of the liabilities to repay. The Financial Corporation is concerned with repayment of loan either from the property or persons offered as surety. Thus, a vehicle, which is subject matter of confiscation proceeding under the Act, 1872, being not available to the Orissa State Financial Corporation for adjustment of the unpaid loan, that does not at all bring out an anomalous situation so as to defeat the right of the Orissa State Financial Corporation. Agreement between the Orissa State Financial Corporation and the loanee is a pure and simple contract governed by the provisions of the Contract Act, 1872 read with the provisions in the Act, 1951 and its Rules. On the other hand, a confiscation proceeding under the Act, 1972 is punitive in nature for commission of a forest offence. Thus, by virtue of the provision in Section 56 read with Section 64 (2) of the Act, 1972, the action taken for confiscation of the vehicle cannot be extended to grant protection of the loan advanced by Orissa State Financial Corporation. By doing that it amounts to grant premium to the pick-pockets in as much as, by making payment of the confiscation amount in favour of the Orissa State Financial Corporation the loan burden of the accused of the forest offence is reduced to the extent of the sale proceeds of the vehicle. In other words, on payment of the sale proceeds of the confiscation proceeding to the Orissa State Financial Corporation towards discharge of the loan account of the accused of a forest offence, it would lead to a system to reward him by repayment of his loan. Then it does not become a penalty nor the action become punitive, but it remains as a reward to the accused of forest offence. Such a concept is totally not conceivable from any provision in the Act, 1972 or the Act, 1951. [AIR 2002 Orissa 130 Overruled].  -  In that case, the stand of the Revenue was disapproved by the Orissa High Court. 16. Learned Counsel for the petitioner submitted that the photographs taken by the petitioner are not goods which can be sold and is not a marketable commodity like any other goods.',
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			'judge' => ' A.K. Ganguly, C.J. and; B.N. Mahapatra, J.',
			'judgement' => '<p style="text-align: justify;">A.K. Ganguly, C.J.</p><p style="text-align: justify;">1. Initially three S.J.Cs. being S.J.C. Nos. 10 of 1997, 8 of 1997 and 9 of 1997 were filed and subsequently renumbered as STREV Nos. 212, 214 and 216 of 2007 respectively. In view of the common questions of facts and law, all the three Revision Applications are heard and disposed of together.</p><p style="text-align: justify;">2. The following questions of law arising out of the order passed by the Orissa Sales Tax Tribunal on 8.12.1993 in Second Appeal Nos. 3345 to 3350 of 1991-92 have been referred to this Hon'ble High Court in terms of the order of this Hon'ble Court dated 24.2.1997. The questions are:</p><p style="text-align: justify;">(i) Whether on the facts and in the circumstances of the case, the Tribunal is right to held that tax is exigible for photographs as execution of works contract ?</p><p style="text-align: justify;">(ii) Whether on the facts and in the circumstances of the case, the conclusion of the Tribunal is perverse due to non-consideration and mis-consideration of facts and law and, therefore, it is liable to be set aside for re-hearing ?</p><p style="text-align: justify;">3. The materials facts out of which those questions arise are that the petitioner carries on the business of processing and developing photography. In the usual course of business, the petitioner takes photographs of persons or of family and then develops the negative by employing his skill and labour and then supplies the photographs to the clients. These photographs which are prepared by the petitioner are not commercial items because they are neither purchased nor sold. However, to develop these photographs employment of skill and labour is essential. It may be mentioned that petitioner does not carry on any sale of photographs of national leaders, God and Goddess.</p><p style="text-align: justify;">4. After the passing of 46th amendment of the Constitution of India and consequent amendments thereto in Orissa Sales Tax Act (OST Act), the Sales Tax Officer, Bhubaneswar-II Circle, Bhubaneswar sent notices to assess the petitioner as an unregistered dealer under Section 12 (5) of the OST Act, inter alia, contending that the petitioner's activities can be called 'works contract'. Pursuant to said notice, the petitioner gave its reply and appeared before the Sales Tax Officer and produced the books of account and documents including Receipts, Purchase Memos, Vouchers, Ledger and thereby denied its liability under the OST Act. The petitioner also submitted objection petitions on various dates i.e. 28.12.1985, 10.1.1986, 20.2.1986 and 29.2.1988 contending, inter alia, that the petitioner has no sales tax liability under OST Act and the notices, which were issued, are without jurisdiction.</p><p style="text-align: justify;">5. Ignoring the said objections of the petitioner, the Sales Tax Officer, Bhubaneswar-II Circle, Bhubaneswar assessed the petitioner as an unregistered dealer, inter alia, holding that the petitioner is liable to pay sales tax as petitioner has been alleged to carry activities of 'works contract'. Therefore, orders of assessment being dated 29.2.1988 for the years 1984-85 (9/84 to 3/85), 1985-86 and 1986- 87 under Section 12(5) of OST Act and under Rule 5 of the Orissa Additional Sales Tax Rules, 1975 were passed and a tax of Rs. 20,765.00 and penalty of Rs. 5,000.00 totalling to Rs. 25,765.00 was imposed on the petitioner. The petitioner then filed the First Appeal before the learned Assistant Commissioner of Sales Tax. The First Appellate Authority by an order dated 27.9.1991 confirmed the levy of tax under the OST Act, but reduced the penalty to Rs. 1250.00. Thereupon, the petitioner filed the Second Appeal before the Orissa Sales Tax Tribunal, Cuttack. The said Tribunal heard the Second Appeal and in course of hearing, the petitioner raised various contentions. Ultimately, the Tribunal upheld the levy of tax but deleted the penalty.</p><p style="text-align: justify;">6. Thereafter the petitioner came up with a reference application under Section 24(1) of the Orissa Sales Tax Act framing certain questions for being referred to the Hon'ble High Court. The said prayer of the petitioner was rejected by the Tribunal. Then the petitioner moved Hon'ble High Court under Section 24(2)(b) of the Orissa Sales Tax Act, 1947 whereupon the High Court directed the Tribunal to state to case and refer the questions under Section 24(3) of the OST Act for a decision of the High Court.</p><p style="text-align: justify;">7. Accordingly, the Tribunal stated the case and referred the aforesaid questions for a decision of the High Court.</p><p style="text-align: justify;">8. Learned Counsel for the petitioner before the High Court submitted that in the transaction in question, there is no contract of sale between the petitioner and the client. It is only a contract of service and the photographs, which the petitioner produced by supplying the same has no commercial value and are not marketable. So, there is no question of a works contract. It is the consistent stand of the petitioner that the present photographs which are produced by the petitioner have no utility or value to any other person than the customer. By developing such photographs, the petitioner only renders service to his customers. The customer pays for the service rendered by the petitioner. It is the contention of the petitioner that his activity is similar to that of consulting firm preparing plan and sketches pursuant to client's specification or professional giving opinion on papers. All those activities are done to serve the client. Therefore, this does not come within the purview of the definition of 'goods', 'sale', 'dealer' or 'works contract'. It is the petitioner's case that he purchased the goods, namely, papers on payment of sales tax. Further levy of tax on the personal service rendered to the client of the petitioner will amount to double taxation. It is also the contention of the petitioner that the paper which is used in the photography are incidental and insignificant.</p><p style="text-align: justify;">9. In support of its contention, learned Counsel for the petitioner has relied on several judgments. First reliance was place on the judgment of the Supreme Court in the case of Sales Tax Officer v. B.C. Kame reported in 39 STC 237(SC). At page 241 of the report, learned Judges of the Supreme Court held that a photographer takes the photograph and develops the negatives and does other photographic work and thereafter supplies the prints to his client. By doing so he cannot be said to enter into a contract for sale of goods. On the other hand, the contract is for use of skill and labour by the photographer to bring about the desired result. Learned Judges held that the job of a photographer is a contract for work and labour and it is not a contract of sale.</p><p style="text-align: justify;">10. Reliance was also placed on a judgment of this High Court in the case of Photo Emporium v. Addl. District Magistrate reported in 77 STC 199 in which this High Court followed the ratio of the judgment of the Supreme Court in the case of B.C. Kame. In that case, the stand of the Revenue was disapproved by the Orissa High Court.</p><p style="text-align: justify;">11. Similar view was taken in 110 STC 145 in the case of Foto Colour Labs Pvt. Ltd. v. Commercial Taxes Officer where the Tribunal held that the transfer of paper in the photograph is purely incidental and payment is only taken to give positive prints and not to get the photo papers. Therefore, the contract in between the petitioner and his client is not a contract of sale, and neither directly or indirectly works contract is involved in the supply of photo papers. Similar view was taken by the West Bengal Taxation Tribunal in the case of Studio Kamalalaya v. Commercial Tax Officer reported in 89 STC 307.</p><p style="text-align: justify;">12. In the case of Bavens v. Onion of India report in 97 STC 161, learned Judges held that when a photographer takes a photograph of his customer, he develops the negative and supplies positive prints in the desired size to the customer. In doing so the photographer uses his own camera and his own film. The negative belongs to the photographer and not to the customer. No basic goods are provided by the customer which are subjected to processing by the photographer so as to make the contract a works contract. There is no accretion to goods or property or the nucleus of a property which belongs to the customer. It is the skill of the photographer which is most important to get the desired result.</p><p style="text-align: justify;">13. Hon'ble Karnataka High Court followed the same principle in the case of Keshoram Surlndranath Photo-mag Pvt. Ltd. v. Assistant Commissioner of Commercial Taxes reported in 121 STC 175. In that judgment, learned Judges of the Karnataka High Court relied on the judgment of the Supreme Court in B.C. Kame's case and came to the conclusion that in the job of the photographer in supplying positive prints to his customer, no works contract is involved and photographs are not marketable or saleable commodity and as such no tax can be levied on it.</p><p style="text-align: justify;">14. Against the said judgment of the Karnataka High Court, the State of Karnataka High Court filed a S.L.P. before the Hon'ble Supreme Court bearing SLP Nos. 6136-6163 of 2000 and the Hon'ble Supreme Court dismissed the SLP on 20th April, 2000.</p><p style="text-align: justify;">15. In the case of Rainbow Colour Lab v. State of M.P. learned Judges of the Hon'ble Supreme Court reiterated its judgment in B.C. Kame's case and came to the following conclusion:</p><p style="text-align: justify;">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.</p><p style="text-align: justify;">Hon'ble Supreme Court in Bharat Sanchar Nigam Ltd. v. Union of India reported in 145 STC 91 again reiterated the principle in B.C. Kame's case and held that the work done by the photographer is only in the nature of a service contract not involving any sale of goods and held that the stand taken by the State cannot be sustained.</p><p style="text-align: justify;">16. Learned Counsel for the petitioner submitted that the photographs taken by the petitioner are not goods which can be sold and is not a marketable commodity like any other goods. When the copies of photographs are made out, they have no utility or value to any other person than the customer. It is already admitted that the papers utilized for photographs are tax paid goods. Therefore, it is contended by the learned Counsel for the petitioner that the work of photography does not come within the purview of works contract as defined in Section 2(jj) of the Orissa Sales Tax Act.</p><p style="text-align: justify;">17. Learned Counsel for the Revenue in this case virtually did not contest the submission made by the learned Counsel for the petitioner and in support of his contention, learned Counsel for the Revenue relied on a decision of the Supreme Court in the case of Imagic Creative Pvt. Ltd. v. Commissioner of Commercial Taxes and Ors. reported in (2008) 10 RC 236. In that judgment, learned Judges held that since the contract in question is a service contract, it is difficult to hold that in a case of this nature, sales tax would be payable on the value of the entire contract irrespective of the element of service provided.</p><p style="text-align: justify;">For the reasons discussed above, we answer the first question in the negative and the second question, in the affirmative. We thus answer both the questions in favour of the assessee and against the Revenue.</p><p style="text-align: justify;">The three revision applications are thus disposed of.</p><p style="text-align: justify;">No costs.</p><p style="text-align: justify;">B.N. Mahapatra, J.</p><p style="text-align: justify;">18. I agree.<p style="text-align: justify;"></p><p style="text-align: justify;">',
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$title_for_layout = 'Studio Sujata Vs Commissioner of Sales Tax - Citation 531271 - Court Judgment | '
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	'Judgement' => array(
		'id' => '531271',
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		'appellant' => 'Studio Sujata',
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		'casename' => 'Studio Sujata Vs. Commissioner of Sales Tax',
		'casenote' => 'Sales Tax - Assessment - Contract of Sale - Section 12 (5) of Orissa Sales Tax 1947 - Petitioner carries on business of processing and developing photography - Revenue assessed petitioner under Section 12(5) of Act on ground that activities of petitioner can be called works contract - Petitioner approached to Assistant of Sales Tax on ground that there is no contract of sale between the petitioner and the client, it is only service - Dismissed and affirmed by Tribunal - Hence present petition - Whether Tribunal is right to held that tax is exigible for photographs as execution of works contract or not? - Held, as per precedent laid down by Supreme Court in case of Sales Tax Officer v. B.C. Kame that photographer takes photograph and develops negatives and does other photographic work and thereafter supplies prints to his client - By doing so he cannot be said to enter into contract for sale of goods - Therefore, job of photographer is contract for work and labour and it is not contract of sale - Revenue committed mistake in assessing petitioner under Section 12(5) of Act on basis of contract of sale - Petition disposed of accordingly  - STATE FINANCIAL CORPORATIONS ACT, 1951 [63/1951]. Section 29; [P.K. Tripathy, A.K. Parichha & N.Prusty, JJ] Discharge of loan  Orissa Forest Act (14 of 1972), Section 56  Confiscation of vehicle - Held, The Authorities under Section 56 of the Orissa Forest Act, 1972 are not obliged to release the vehicle from the confiscation proceeding or to pay the sale proceeds of the vehicle after the order of confiscation in favour of Orissa State Financial Corporation when such vehicles were purchased on being financed by the Orissa State Financial Corporation and the loan had not been liquidated by the date of the seizure/confiscation of the vehicle. Concept of first charge or second charge has no applicability when the vehicle is not otherwise disposed of to determine the liabilities of the loanee. On the other hand the vehicle having been found indulged in forest offences was made subject matter of a confiscation proceedings, and therefore, the procedure followed for confiscation of the vehicle and for its sale is punitive in nature and not with a view to give benefit to anybody including the Department which initiated the confiscation proceeding. Apart from that, the claim of the Orissa State Financial Corporation as against its loanee (who had taken the vehicle on hire- purchase agreement) brings the loanee and the sureties within the default clause under the State Financial Corporation Act, 1951 or the heirs and successors of such persons. Procedure is provided in the Act, 1951 and the Rules thereof about the manner in which such loan is to be recovered, and in that context only the vehicle under the hire-purchase agreement is placed as the first charge. If such property is not available for any reason, then the loan is not automatically waived or the loanee and his sureties are not automatically redeemed of the liabilities to repay. The Financial Corporation is concerned with repayment of loan either from the property or persons offered as surety. Thus, a vehicle, which is subject matter of confiscation proceeding under the Act, 1872, being not available to the Orissa State Financial Corporation for adjustment of the unpaid loan, that does not at all bring out an anomalous situation so as to defeat the right of the Orissa State Financial Corporation. Agreement between the Orissa State Financial Corporation and the loanee is a pure and simple contract governed by the provisions of the Contract Act, 1872 read with the provisions in the Act, 1951 and its Rules. On the other hand, a confiscation proceeding under the Act, 1972 is punitive in nature for commission of a forest offence. Thus, by virtue of the provision in Section 56 read with Section 64 (2) of the Act, 1972, the action taken for confiscation of the vehicle cannot be extended to grant protection of the loan advanced by Orissa State Financial Corporation. By doing that it amounts to grant premium to the pick-pockets in as much as, by making payment of the confiscation amount in favour of the Orissa State Financial Corporation the loan burden of the accused of the forest offence is reduced to the extent of the sale proceeds of the vehicle. In other words, on payment of the sale proceeds of the confiscation proceeding to the Orissa State Financial Corporation towards discharge of the loan account of the accused of a forest offence, it would lead to a system to reward him by repayment of his loan. Then it does not become a penalty nor the action become punitive, but it remains as a reward to the accused of forest offence. Such a concept is totally not conceivable from any provision in the Act, 1972 or the Act, 1951. [AIR 2002 Orissa 130 Overruled]. -- STATE FINANCIAL CORPORATIONS ACT, 1951. 
Section 29; Discharge of loan  Orissa Forest Act (14 of 1972), Section 56  Confiscation of vehicle - Held, The Authorities under Section 56 of the Orissa Forest Act, 1972 are not obliged to release the vehicle from the confiscation proceeding or to pay the sale proceeds of the vehicle after the order of confiscation in favour of Orissa State Financial Corporation when such vehicles were purchased on being financed by the Orissa State Financial Corporation and the loan had not been liquidated by the date of the seizure/confiscation of the vehicle. Concept of first charge or second charge has no applicability when the vehicle is not otherwise disposed of to determine the liabilities of the loanee. On the other hand the vehicle having been found indulged in forest offences was made subject matter of a confiscation proceedings, and therefore, the procedure followed for confiscation of the vehicle and for its sale is punitive in nature and not with a view to give benefit to anybody including the Department which initiated the confiscation proceeding. Apart from that, the claim of the Orissa State Financial Corporation as against its loanee (who had taken the vehicle on hire- purchase agreement) brings the loanee and the sureties within the default clause under the State Financial Corporation Act, 1951 or the heirs and successors of such persons. Procedure is provided in the Act, 1951 and the Rules thereof about the manner in which such loan is to be recovered, and in that context only the vehicle under the hire-purchase agreement is placed as the first charge. If such property is not available for any reason, then the loan is not automatically waived or the loanee and his sureties are not automatically redeemed of the liabilities to repay. The Financial Corporation is concerned with repayment of loan either from the property or persons offered as surety. Thus, a vehicle, which is subject matter of confiscation proceeding under the Act, 1872, being not available to the Orissa State Financial Corporation for adjustment of the unpaid loan, that does not at all bring out an anomalous situation so as to defeat the right of the Orissa State Financial Corporation. Agreement between the Orissa State Financial Corporation and the loanee is a pure and simple contract governed by the provisions of the Contract Act, 1872 read with the provisions in the Act, 1951 and its Rules. On the other hand, a confiscation proceeding under the Act, 1972 is punitive in nature for commission of a forest offence. Thus, by virtue of the provision in Section 56 read with Section 64 (2) of the Act, 1972, the action taken for confiscation of the vehicle cannot be extended to grant protection of the loan advanced by Orissa State Financial Corporation. By doing that it amounts to grant premium to the pick-pockets in as much as, by making payment of the confiscation amount in favour of the Orissa State Financial Corporation the loan burden of the accused of the forest offence is reduced to the extent of the sale proceeds of the vehicle. In other words, on payment of the sale proceeds of the confiscation proceeding to the Orissa State Financial Corporation towards discharge of the loan account of the accused of a forest offence, it would lead to a system to reward him by repayment of his loan. Then it does not become a penalty nor the action become punitive, but it remains as a reward to the accused of forest offence. Such a concept is totally not conceivable from any provision in the Act, 1972 or the Act, 1951. [AIR 2002 Orissa 130 Overruled].  -  In that case, the stand of the Revenue was disapproved by the Orissa High Court. 16. Learned Counsel for the petitioner submitted that the photographs taken by the petitioner are not goods which can be sold and is not a marketable commodity like any other goods.',
		'caseanalysis' => null,
		'casesref' => 'Imagic Creative Pvt. Ltd. v. Commissioner of Commercial Taxes and Ors.;',
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		'court' => 'Orissa',
		'court_type' => 'HC',
		'decidedon' => '2008-04-02',
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		'judge' => ' A.K. Ganguly, C.J. and; B.N. Mahapatra, J.',
		'judgement' => '<p>A.K. Ganguly, C.J.</p><p>1. Initially three S.J.Cs. being S.J.C. Nos. 10 of 1997, 8 of 1997 and 9 of 1997 were filed and subsequently renumbered as STREV Nos. 212, 214 and 216 of 2007 respectively. In view of the common questions of facts and law, all the three Revision Applications are heard and disposed of together.</p><p>2. The following questions of law arising out of the order passed by the Orissa Sales Tax Tribunal on 8.12.1993 in Second Appeal Nos. 3345 to 3350 of 1991-92 have been referred to this Hon'ble High Court in terms of the order of this Hon'ble Court dated 24.2.1997. The questions are:</p><p>(i) Whether on the facts and in the circumstances of the case, the Tribunal is right to held that tax is exigible for photographs as execution of works contract ?</p><p>(ii) Whether on the facts and in the circumstances of the case, the conclusion of the Tribunal is perverse due to non-consideration and mis-consideration of facts and law and, therefore, it is liable to be set aside for re-hearing ?</p><p>3. The materials facts out of which those questions arise are that the petitioner carries on the business of processing and developing photography. In the usual course of business, the petitioner takes photographs of persons or of family and then develops the negative by employing his skill and labour and then supplies the photographs to the clients. These photographs which are prepared by the petitioner are not commercial items because they are neither purchased nor sold. However, to develop these photographs employment of skill and labour is essential. It may be mentioned that petitioner does not carry on any sale of photographs of national leaders, God and Goddess.</p><p>4. After the passing of 46th amendment of the Constitution of India and consequent amendments thereto in Orissa Sales Tax Act (OST Act), the Sales Tax Officer, Bhubaneswar-II Circle, Bhubaneswar sent notices to assess the petitioner as an unregistered dealer under Section 12 (5) of the OST Act, inter alia, contending that the petitioner's activities can be called 'works contract'. Pursuant to said notice, the petitioner gave its reply and appeared before the Sales Tax Officer and produced the books of account and documents including Receipts, Purchase Memos, Vouchers, Ledger and thereby denied its liability under the OST Act. The petitioner also submitted objection petitions on various dates i.e. 28.12.1985, 10.1.1986, 20.2.1986 and 29.2.1988 contending, inter alia, that the petitioner has no sales tax liability under OST Act and the notices, which were issued, are without jurisdiction.</p><p>5. Ignoring the said objections of the petitioner, the Sales Tax Officer, Bhubaneswar-II Circle, Bhubaneswar assessed the petitioner as an unregistered dealer, inter alia, holding that the petitioner is liable to pay sales tax as petitioner has been alleged to carry activities of 'works contract'. Therefore, orders of assessment being dated 29.2.1988 for the years 1984-85 (9/84 to 3/85), 1985-86 and 1986- 87 under Section 12(5) of OST Act and under Rule 5 of the Orissa Additional Sales Tax Rules, 1975 were passed and a tax of Rs. 20,765.00 and penalty of Rs. 5,000.00 totalling to Rs. 25,765.00 was imposed on the petitioner. The petitioner then filed the First Appeal before the learned Assistant Commissioner of Sales Tax. The First Appellate Authority by an order dated 27.9.1991 confirmed the levy of tax under the OST Act, but reduced the penalty to Rs. 1250.00. Thereupon, the petitioner filed the Second Appeal before the Orissa Sales Tax Tribunal, Cuttack. The said Tribunal heard the Second Appeal and in course of hearing, the petitioner raised various contentions. Ultimately, the Tribunal upheld the levy of tax but deleted the penalty.</p><p>6. Thereafter the petitioner came up with a reference application under Section 24(1) of the Orissa Sales Tax Act framing certain questions for being referred to the Hon'ble High Court. The said prayer of the petitioner was rejected by the Tribunal. Then the petitioner moved Hon'ble High Court under Section 24(2)(b) of the Orissa Sales Tax Act, 1947 whereupon the High Court directed the Tribunal to state to case and refer the questions under Section 24(3) of the OST Act for a decision of the High Court.</p><p>7. Accordingly, the Tribunal stated the case and referred the aforesaid questions for a decision of the High Court.</p><p>8. Learned Counsel for the petitioner before the High Court submitted that in the transaction in question, there is no contract of sale between the petitioner and the client. It is only a contract of service and the photographs, which the petitioner produced by supplying the same has no commercial value and are not marketable. So, there is no question of a works contract. It is the consistent stand of the petitioner that the present photographs which are produced by the petitioner have no utility or value to any other person than the customer. By developing such photographs, the petitioner only renders service to his customers. The customer pays for the service rendered by the petitioner. It is the contention of the petitioner that his activity is similar to that of consulting firm preparing plan and sketches pursuant to client's specification or professional giving opinion on papers. All those activities are done to serve the client. Therefore, this does not come within the purview of the definition of 'goods', 'sale', 'dealer' or 'works contract'. It is the petitioner's case that he purchased the goods, namely, papers on payment of sales tax. Further levy of tax on the personal service rendered to the client of the petitioner will amount to double taxation. It is also the contention of the petitioner that the paper which is used in the photography are incidental and insignificant.</p><p>9. In support of its contention, learned Counsel for the petitioner has relied on several judgments. First reliance was place on the judgment of the Supreme Court in the case of Sales Tax Officer v. B.C. Kame reported in 39 STC 237(SC). At page 241 of the report, learned Judges of the Supreme Court held that a photographer takes the photograph and develops the negatives and does other photographic work and thereafter supplies the prints to his client. By doing so he cannot be said to enter into a contract for sale of goods. On the other hand, the contract is for use of skill and labour by the photographer to bring about the desired result. Learned Judges held that the job of a photographer is a contract for work and labour and it is not a contract of sale.</p><p>10. Reliance was also placed on a judgment of this High Court in the case of Photo Emporium v. Addl. District Magistrate reported in 77 STC 199 in which this High Court followed the ratio of the judgment of the Supreme Court in the case of B.C. Kame. In that case, the stand of the Revenue was disapproved by the Orissa High Court.</p><p>11. Similar view was taken in 110 STC 145 in the case of Foto Colour Labs Pvt. Ltd. v. Commercial Taxes Officer where the Tribunal held that the transfer of paper in the photograph is purely incidental and payment is only taken to give positive prints and not to get the photo papers. Therefore, the contract in between the petitioner and his client is not a contract of sale, and neither directly or indirectly works contract is involved in the supply of photo papers. Similar view was taken by the West Bengal Taxation Tribunal in the case of Studio Kamalalaya v. Commercial Tax Officer reported in 89 STC 307.</p><p>12. In the case of Bavens v. Onion of India report in 97 STC 161, learned Judges held that when a photographer takes a photograph of his customer, he develops the negative and supplies positive prints in the desired size to the customer. In doing so the photographer uses his own camera and his own film. The negative belongs to the photographer and not to the customer. No basic goods are provided by the customer which are subjected to processing by the photographer so as to make the contract a works contract. There is no accretion to goods or property or the nucleus of a property which belongs to the customer. It is the skill of the photographer which is most important to get the desired result.</p><p>13. Hon'ble Karnataka High Court followed the same principle in the case of Keshoram Surlndranath Photo-mag Pvt. Ltd. v. Assistant Commissioner of Commercial Taxes reported in 121 STC 175. In that judgment, learned Judges of the Karnataka High Court relied on the judgment of the Supreme Court in B.C. Kame's case and came to the conclusion that in the job of the photographer in supplying positive prints to his customer, no works contract is involved and photographs are not marketable or saleable commodity and as such no tax can be levied on it.</p><p>14. Against the said judgment of the Karnataka High Court, the State of Karnataka High Court filed a S.L.P. before the Hon'ble Supreme Court bearing SLP Nos. 6136-6163 of 2000 and the Hon'ble Supreme Court dismissed the SLP on 20th April, 2000.</p><p>15. In the case of Rainbow Colour Lab v. State of M.P. learned Judges of the Hon'ble Supreme Court reiterated its judgment in B.C. Kame's case and came to the following conclusion:</p><p>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.</p><p>Hon'ble Supreme Court in Bharat Sanchar Nigam Ltd. v. Union of India reported in 145 STC 91 again reiterated the principle in B.C. Kame's case and held that the work done by the photographer is only in the nature of a service contract not involving any sale of goods and held that the stand taken by the State cannot be sustained.</p><p>16. Learned Counsel for the petitioner submitted that the photographs taken by the petitioner are not goods which can be sold and is not a marketable commodity like any other goods. When the copies of photographs are made out, they have no utility or value to any other person than the customer. It is already admitted that the papers utilized for photographs are tax paid goods. Therefore, it is contended by the learned Counsel for the petitioner that the work of photography does not come within the purview of works contract as defined in Section 2(jj) of the Orissa Sales Tax Act.</p><p>17. Learned Counsel for the Revenue in this case virtually did not contest the submission made by the learned Counsel for the petitioner and in support of his contention, learned Counsel for the Revenue relied on a decision of the Supreme Court in the case of Imagic Creative Pvt. Ltd. v. Commissioner of Commercial Taxes and Ors. reported in (2008) 10 RC 236. In that judgment, learned Judges held that since the contract in question is a service contract, it is difficult to hold that in a case of this nature, sales tax would be payable on the value of the entire contract irrespective of the element of service provided.</p><p>For the reasons discussed above, we answer the first question in the negative and the second question, in the affirmative. We thus answer both the questions in favour of the assessee and against the Revenue.</p><p>The three revision applications are thus disposed of.</p><p>No costs.</p><p>B.N. Mahapatra, J.</p><p>18. I agree.<p></p><p>',
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	(int) 0 => '<p>A.K. Ganguly, C.J.',
	(int) 1 => '<p>1. Initially three S.J.Cs. being S.J.C. Nos. 10 of 1997, 8 of 1997 and 9 of 1997 were filed and subsequently renumbered as STREV Nos. 212, 214 and 216 of 2007 respectively. In view of the common questions of facts and law, all the three Revision Applications are heard and disposed of together.',
	(int) 2 => '<p>2. The following questions of law arising out of the order passed by the Orissa Sales Tax Tribunal on 8.12.1993 in Second Appeal Nos. 3345 to 3350 of 1991-92 have been referred to this Hon'ble High Court in terms of the order of this Hon'ble Court dated 24.2.1997. The questions are:',
	(int) 3 => '<p>(i) Whether on the facts and in the circumstances of the case, the Tribunal is right to held that tax is exigible for photographs as execution of works contract ?',
	(int) 4 => '<p>(ii) Whether on the facts and in the circumstances of the case, the conclusion of the Tribunal is perverse due to non-consideration and mis-consideration of facts and law and, therefore, it is liable to be set aside for re-hearing ?',
	(int) 5 => '<p>3. The materials facts out of which those questions arise are that the petitioner carries on the business of processing and developing photography. In the usual course of business, the petitioner takes photographs of persons or of family and then develops the negative by employing his skill and labour and then supplies the photographs to the clients. These photographs which are prepared by the petitioner are not commercial items because they are neither purchased nor sold. However, to develop these photographs employment of skill and labour is essential. It may be mentioned that petitioner does not carry on any sale of photographs of national leaders, God and Goddess.',
	(int) 6 => '<p>4. After the passing of 46th amendment of the Constitution of India and consequent amendments thereto in Orissa Sales Tax Act (OST Act), the Sales Tax Officer, Bhubaneswar-II Circle, Bhubaneswar sent notices to assess the petitioner as an unregistered dealer under Section 12 (5) of the OST Act, inter alia, contending that the petitioner's activities can be called 'works contract'. Pursuant to said notice, the petitioner gave its reply and appeared before the Sales Tax Officer and produced the books of account and documents including Receipts, Purchase Memos, Vouchers, Ledger and thereby denied its liability under the OST Act. The petitioner also submitted objection petitions on various dates i.e. 28.12.1985, 10.1.1986, 20.2.1986 and 29.2.1988 contending, inter alia, that the petitioner has no sales tax liability under OST Act and the notices, which were issued, are without jurisdiction.',
	(int) 7 => '<p>5. Ignoring the said objections of the petitioner, the Sales Tax Officer, Bhubaneswar-II Circle, Bhubaneswar assessed the petitioner as an unregistered dealer, inter alia, holding that the petitioner is liable to pay sales tax as petitioner has been alleged to carry activities of 'works contract'. Therefore, orders of assessment being dated 29.2.1988 for the years 1984-85 (9/84 to 3/85), 1985-86 and 1986- 87 under Section 12(5) of OST Act and under Rule 5 of the Orissa Additional Sales Tax Rules, 1975 were passed and a tax of Rs. 20,765.00 and penalty of Rs. 5,000.00 totalling to Rs. 25,765.00 was imposed on the petitioner. The petitioner then filed the First Appeal before the learned Assistant Commissioner of Sales Tax. The First Appellate Authority by an order dated 27.9.1991 confirmed the levy of tax under the OST Act, but reduced the penalty to Rs. 1250.00. Thereupon, the petitioner filed the Second Appeal before the Orissa Sales Tax Tribunal, Cuttack. The said Tribunal heard the Second Appeal and in course of hearing, the petitioner raised various contentions. Ultimately, the Tribunal upheld the levy of tax but deleted the penalty.',
	(int) 8 => '<p>6. Thereafter the petitioner came up with a reference application under Section 24(1) of the Orissa Sales Tax Act framing certain questions for being referred to the Hon'ble High Court. The said prayer of the petitioner was rejected by the Tribunal. Then the petitioner moved Hon'ble High Court under Section 24(2)(b) of the Orissa Sales Tax Act, 1947 whereupon the High Court directed the Tribunal to state to case and refer the questions under Section 24(3) of the OST Act for a decision of the High Court.',
	(int) 9 => '<p>7. Accordingly, the Tribunal stated the case and referred the aforesaid questions for a decision of the High Court.',
	(int) 10 => '<p>8. Learned Counsel for the petitioner before the High Court submitted that in the transaction in question, there is no contract of sale between the petitioner and the client. It is only a contract of service and the photographs, which the petitioner produced by supplying the same has no commercial value and are not marketable. So, there is no question of a works contract. It is the consistent stand of the petitioner that the present photographs which are produced by the petitioner have no utility or value to any other person than the customer. By developing such photographs, the petitioner only renders service to his customers. The customer pays for the service rendered by the petitioner. It is the contention of the petitioner that his activity is similar to that of consulting firm preparing plan and sketches pursuant to client's specification or professional giving opinion on papers. All those activities are done to serve the client. Therefore, this does not come within the purview of the definition of 'goods', 'sale', 'dealer' or 'works contract'. It is the petitioner's case that he purchased the goods, namely, papers on payment of sales tax. Further levy of tax on the personal service rendered to the client of the petitioner will amount to double taxation. It is also the contention of the petitioner that the paper which is used in the photography are incidental and insignificant.',
	(int) 11 => '<p>9. In support of its contention, learned Counsel for the petitioner has relied on several judgments. First reliance was place on the judgment of the Supreme Court in the case of Sales Tax Officer v. B.C. Kame reported in 39 STC 237(SC). At page 241 of the report, learned Judges of the Supreme Court held that a photographer takes the photograph and develops the negatives and does other photographic work and thereafter supplies the prints to his client. By doing so he cannot be said to enter into a contract for sale of goods. On the other hand, the contract is for use of skill and labour by the photographer to bring about the desired result. Learned Judges held that the job of a photographer is a contract for work and labour and it is not a contract of sale.',
	(int) 12 => '<p>10. Reliance was also placed on a judgment of this High Court in the case of Photo Emporium v. Addl. District Magistrate reported in 77 STC 199 in which this High Court followed the ratio of the judgment of the Supreme Court in the case of B.C. Kame. In that case, the stand of the Revenue was disapproved by the Orissa High Court.',
	(int) 13 => '<p>11. Similar view was taken in 110 STC 145 in the case of Foto Colour Labs Pvt. Ltd. v. Commercial Taxes Officer where the Tribunal held that the transfer of paper in the photograph is purely incidental and payment is only taken to give positive prints and not to get the photo papers. Therefore, the contract in between the petitioner and his client is not a contract of sale, and neither directly or indirectly works contract is involved in the supply of photo papers. Similar view was taken by the West Bengal Taxation Tribunal in the case of Studio Kamalalaya v. Commercial Tax Officer reported in 89 STC 307.',
	(int) 14 => '<p>12. In the case of Bavens v. Onion of India report in 97 STC 161, learned Judges held that when a photographer takes a photograph of his customer, he develops the negative and supplies positive prints in the desired size to the customer. In doing so the photographer uses his own camera and his own film. The negative belongs to the photographer and not to the customer. No basic goods are provided by the customer which are subjected to processing by the photographer so as to make the contract a works contract. There is no accretion to goods or property or the nucleus of a property which belongs to the customer. It is the skill of the photographer which is most important to get the desired result.',
	(int) 15 => '<p>13. Hon'ble Karnataka High Court followed the same principle in the case of Keshoram Surlndranath Photo-mag Pvt. Ltd. v. Assistant Commissioner of Commercial Taxes reported in 121 STC 175. In that judgment, learned Judges of the Karnataka High Court relied on the judgment of the Supreme Court in B.C. Kame's case and came to the conclusion that in the job of the photographer in supplying positive prints to his customer, no works contract is involved and photographs are not marketable or saleable commodity and as such no tax can be levied on it.',
	(int) 16 => '<p>14. Against the said judgment of the Karnataka High Court, the State of Karnataka High Court filed a S.L.P. before the Hon'ble Supreme Court bearing SLP Nos. 6136-6163 of 2000 and the Hon'ble Supreme Court dismissed the SLP on 20th April, 2000.',
	(int) 17 => '<p>15. In the case of Rainbow Colour Lab v. State of M.P. learned Judges of the Hon'ble Supreme Court reiterated its judgment in B.C. Kame's case and came to the following conclusion:',
	(int) 18 => '<p>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.',
	(int) 19 => '<p>Hon'ble Supreme Court in Bharat Sanchar Nigam Ltd. v. Union of India reported in 145 STC 91 again reiterated the principle in B.C. Kame's case and held that the work done by the photographer is only in the nature of a service contract not involving any sale of goods and held that the stand taken by the State cannot be sustained.',
	(int) 20 => '<p>16. Learned Counsel for the petitioner submitted that the photographs taken by the petitioner are not goods which can be sold and is not a marketable commodity like any other goods. When the copies of photographs are made out, they have no utility or value to any other person than the customer. It is already admitted that the papers utilized for photographs are tax paid goods. Therefore, it is contended by the learned Counsel for the petitioner that the work of photography does not come within the purview of works contract as defined in Section 2(jj) of the Orissa Sales Tax Act.',
	(int) 21 => '<p>17. Learned Counsel for the Revenue in this case virtually did not contest the submission made by the learned Counsel for the petitioner and in support of his contention, learned Counsel for the Revenue relied on a decision of the Supreme Court in the case of Imagic Creative Pvt. Ltd. v. Commissioner of Commercial Taxes and Ors. reported in (2008) 10 RC 236. In that judgment, learned Judges held that since the contract in question is a service contract, it is difficult to hold that in a case of this nature, sales tax would be payable on the value of the entire contract irrespective of the element of service provided.',
	(int) 22 => '<p>For the reasons discussed above, we answer the first question in the negative and the second question, in the affirmative. We thus answer both the questions in favour of the assessee and against the Revenue.',
	(int) 23 => '<p>The three revision applications are thus disposed of.',
	(int) 24 => '<p>No costs.',
	(int) 25 => '<p>B.N. Mahapatra, J.',
	(int) 26 => '<p>18. I agree.<p>',
	(int) 27 => '<p>'
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18. I agree.

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	'title_for_layout' => 'Studio Sujata Vs Commissioner of Sales Tax - Citation 531271 - Court Judgment | ',
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		'Judgement' => array(
			'id' => '531271',
			'acts' => '',
			'appealno' => '',
			'appellant' => 'Studio Sujata',
			'authreffered' => '',
			'casename' => 'Studio Sujata Vs. Commissioner of Sales Tax',
			'casenote' => 'Sales Tax - Assessment - Contract of Sale - Section 12 (5) of Orissa Sales Tax 1947 - Petitioner carries on business of processing and developing photography - Revenue assessed petitioner under Section 12(5) of Act on ground that activities of petitioner can be called works contract - Petitioner approached to Assistant of Sales Tax on ground that there is no contract of sale between the petitioner and the client, it is only service - Dismissed and affirmed by Tribunal - Hence present petition - Whether Tribunal is right to held that tax is exigible for photographs as execution of works contract or not? - Held, as per precedent laid down by Supreme Court in case of Sales Tax Officer v. B.C. Kame that photographer takes photograph and develops negatives and does other photographic work and thereafter supplies prints to his client - By doing so he cannot be said to enter into contract for sale of goods - Therefore, job of photographer is contract for work and labour and it is not contract of sale - Revenue committed mistake in assessing petitioner under Section 12(5) of Act on basis of contract of sale - Petition disposed of accordingly  - STATE FINANCIAL CORPORATIONS ACT, 1951 [63/1951]. Section 29; [P.K. Tripathy, A.K. Parichha & N.Prusty, JJ] Discharge of loan  Orissa Forest Act (14 of 1972), Section 56  Confiscation of vehicle - Held, The Authorities under Section 56 of the Orissa Forest Act, 1972 are not obliged to release the vehicle from the confiscation proceeding or to pay the sale proceeds of the vehicle after the order of confiscation in favour of Orissa State Financial Corporation when such vehicles were purchased on being financed by the Orissa State Financial Corporation and the loan had not been liquidated by the date of the seizure/confiscation of the vehicle. Concept of first charge or second charge has no applicability when the vehicle is not otherwise disposed of to determine the liabilities of the loanee. On the other hand the vehicle having been found indulged in forest offences was made subject matter of a confiscation proceedings, and therefore, the procedure followed for confiscation of the vehicle and for its sale is punitive in nature and not with a view to give benefit to anybody including the Department which initiated the confiscation proceeding. Apart from that, the claim of the Orissa State Financial Corporation as against its loanee (who had taken the vehicle on hire- purchase agreement) brings the loanee and the sureties within the default clause under the State Financial Corporation Act, 1951 or the heirs and successors of such persons. Procedure is provided in the Act, 1951 and the Rules thereof about the manner in which such loan is to be recovered, and in that context only the vehicle under the hire-purchase agreement is placed as the first charge. If such property is not available for any reason, then the loan is not automatically waived or the loanee and his sureties are not automatically redeemed of the liabilities to repay. The Financial Corporation is concerned with repayment of loan either from the property or persons offered as surety. Thus, a vehicle, which is subject matter of confiscation proceeding under the Act, 1872, being not available to the Orissa State Financial Corporation for adjustment of the unpaid loan, that does not at all bring out an anomalous situation so as to defeat the right of the Orissa State Financial Corporation. Agreement between the Orissa State Financial Corporation and the loanee is a pure and simple contract governed by the provisions of the Contract Act, 1872 read with the provisions in the Act, 1951 and its Rules. On the other hand, a confiscation proceeding under the Act, 1972 is punitive in nature for commission of a forest offence. Thus, by virtue of the provision in Section 56 read with Section 64 (2) of the Act, 1972, the action taken for confiscation of the vehicle cannot be extended to grant protection of the loan advanced by Orissa State Financial Corporation. By doing that it amounts to grant premium to the pick-pockets in as much as, by making payment of the confiscation amount in favour of the Orissa State Financial Corporation the loan burden of the accused of the forest offence is reduced to the extent of the sale proceeds of the vehicle. In other words, on payment of the sale proceeds of the confiscation proceeding to the Orissa State Financial Corporation towards discharge of the loan account of the accused of a forest offence, it would lead to a system to reward him by repayment of his loan. Then it does not become a penalty nor the action become punitive, but it remains as a reward to the accused of forest offence. Such a concept is totally not conceivable from any provision in the Act, 1972 or the Act, 1951. [AIR 2002 Orissa 130 Overruled]. -- STATE FINANCIAL CORPORATIONS ACT, 1951. 
Section 29; Discharge of loan  Orissa Forest Act (14 of 1972), Section 56  Confiscation of vehicle - Held, The Authorities under Section 56 of the Orissa Forest Act, 1972 are not obliged to release the vehicle from the confiscation proceeding or to pay the sale proceeds of the vehicle after the order of confiscation in favour of Orissa State Financial Corporation when such vehicles were purchased on being financed by the Orissa State Financial Corporation and the loan had not been liquidated by the date of the seizure/confiscation of the vehicle. Concept of first charge or second charge has no applicability when the vehicle is not otherwise disposed of to determine the liabilities of the loanee. On the other hand the vehicle having been found indulged in forest offences was made subject matter of a confiscation proceedings, and therefore, the procedure followed for confiscation of the vehicle and for its sale is punitive in nature and not with a view to give benefit to anybody including the Department which initiated the confiscation proceeding. Apart from that, the claim of the Orissa State Financial Corporation as against its loanee (who had taken the vehicle on hire- purchase agreement) brings the loanee and the sureties within the default clause under the State Financial Corporation Act, 1951 or the heirs and successors of such persons. Procedure is provided in the Act, 1951 and the Rules thereof about the manner in which such loan is to be recovered, and in that context only the vehicle under the hire-purchase agreement is placed as the first charge. If such property is not available for any reason, then the loan is not automatically waived or the loanee and his sureties are not automatically redeemed of the liabilities to repay. The Financial Corporation is concerned with repayment of loan either from the property or persons offered as surety. Thus, a vehicle, which is subject matter of confiscation proceeding under the Act, 1872, being not available to the Orissa State Financial Corporation for adjustment of the unpaid loan, that does not at all bring out an anomalous situation so as to defeat the right of the Orissa State Financial Corporation. Agreement between the Orissa State Financial Corporation and the loanee is a pure and simple contract governed by the provisions of the Contract Act, 1872 read with the provisions in the Act, 1951 and its Rules. On the other hand, a confiscation proceeding under the Act, 1972 is punitive in nature for commission of a forest offence. Thus, by virtue of the provision in Section 56 read with Section 64 (2) of the Act, 1972, the action taken for confiscation of the vehicle cannot be extended to grant protection of the loan advanced by Orissa State Financial Corporation. By doing that it amounts to grant premium to the pick-pockets in as much as, by making payment of the confiscation amount in favour of the Orissa State Financial Corporation the loan burden of the accused of the forest offence is reduced to the extent of the sale proceeds of the vehicle. In other words, on payment of the sale proceeds of the confiscation proceeding to the Orissa State Financial Corporation towards discharge of the loan account of the accused of a forest offence, it would lead to a system to reward him by repayment of his loan. Then it does not become a penalty nor the action become punitive, but it remains as a reward to the accused of forest offence. Such a concept is totally not conceivable from any provision in the Act, 1972 or the Act, 1951. [AIR 2002 Orissa 130 Overruled].  -  In that case, the stand of the Revenue was disapproved by the Orissa High Court. 16. Learned Counsel for the petitioner submitted that the photographs taken by the petitioner are not goods which can be sold and is not a marketable commodity like any other goods.',
			'caseanalysis' => null,
			'casesref' => 'Imagic Creative Pvt. Ltd. v. Commissioner of Commercial Taxes and Ors.;',
			'citingcases' => '',
			'counselplain' => '',
			'counseldef' => '',
			'court' => 'Orissa',
			'court_type' => 'HC',
			'decidedon' => '2008-04-02',
			'deposition' => '',
			'favorof' => null,
			'findings' => null,
			'judge' => ' A.K. Ganguly, C.J. and; B.N. Mahapatra, J.',
			'judgement' => '<p style="text-align: justify;">A.K. Ganguly, C.J.</p><p style="text-align: justify;">1. Initially three S.J.Cs. being S.J.C. Nos. 10 of 1997, 8 of 1997 and 9 of 1997 were filed and subsequently renumbered as STREV Nos. 212, 214 and 216 of 2007 respectively. In view of the common questions of facts and law, all the three Revision Applications are heard and disposed of together.</p><p style="text-align: justify;">2. The following questions of law arising out of the order passed by the Orissa Sales Tax Tribunal on 8.12.1993 in Second Appeal Nos. 3345 to 3350 of 1991-92 have been referred to this Hon'ble High Court in terms of the order of this Hon'ble Court dated 24.2.1997. The questions are:</p><p style="text-align: justify;">(i) Whether on the facts and in the circumstances of the case, the Tribunal is right to held that tax is exigible for photographs as execution of works contract ?</p><p style="text-align: justify;">(ii) Whether on the facts and in the circumstances of the case, the conclusion of the Tribunal is perverse due to non-consideration and mis-consideration of facts and law and, therefore, it is liable to be set aside for re-hearing ?</p><p style="text-align: justify;">3. The materials facts out of which those questions arise are that the petitioner carries on the business of processing and developing photography. In the usual course of business, the petitioner takes photographs of persons or of family and then develops the negative by employing his skill and labour and then supplies the photographs to the clients. These photographs which are prepared by the petitioner are not commercial items because they are neither purchased nor sold. However, to develop these photographs employment of skill and labour is essential. It may be mentioned that petitioner does not carry on any sale of photographs of national leaders, God and Goddess.</p><p style="text-align: justify;">4. After the passing of 46th amendment of the Constitution of India and consequent amendments thereto in Orissa Sales Tax Act (OST Act), the Sales Tax Officer, Bhubaneswar-II Circle, Bhubaneswar sent notices to assess the petitioner as an unregistered dealer under Section 12 (5) of the OST Act, inter alia, contending that the petitioner's activities can be called 'works contract'. Pursuant to said notice, the petitioner gave its reply and appeared before the Sales Tax Officer and produced the books of account and documents including Receipts, Purchase Memos, Vouchers, Ledger and thereby denied its liability under the OST Act. The petitioner also submitted objection petitions on various dates i.e. 28.12.1985, 10.1.1986, 20.2.1986 and 29.2.1988 contending, inter alia, that the petitioner has no sales tax liability under OST Act and the notices, which were issued, are without jurisdiction.</p><p style="text-align: justify;">5. Ignoring the said objections of the petitioner, the Sales Tax Officer, Bhubaneswar-II Circle, Bhubaneswar assessed the petitioner as an unregistered dealer, inter alia, holding that the petitioner is liable to pay sales tax as petitioner has been alleged to carry activities of 'works contract'. Therefore, orders of assessment being dated 29.2.1988 for the years 1984-85 (9/84 to 3/85), 1985-86 and 1986- 87 under Section 12(5) of OST Act and under Rule 5 of the Orissa Additional Sales Tax Rules, 1975 were passed and a tax of Rs. 20,765.00 and penalty of Rs. 5,000.00 totalling to Rs. 25,765.00 was imposed on the petitioner. The petitioner then filed the First Appeal before the learned Assistant Commissioner of Sales Tax. The First Appellate Authority by an order dated 27.9.1991 confirmed the levy of tax under the OST Act, but reduced the penalty to Rs. 1250.00. Thereupon, the petitioner filed the Second Appeal before the Orissa Sales Tax Tribunal, Cuttack. The said Tribunal heard the Second Appeal and in course of hearing, the petitioner raised various contentions. Ultimately, the Tribunal upheld the levy of tax but deleted the penalty.</p><p style="text-align: justify;">6. Thereafter the petitioner came up with a reference application under Section 24(1) of the Orissa Sales Tax Act framing certain questions for being referred to the Hon'ble High Court. The said prayer of the petitioner was rejected by the Tribunal. Then the petitioner moved Hon'ble High Court under Section 24(2)(b) of the Orissa Sales Tax Act, 1947 whereupon the High Court directed the Tribunal to state to case and refer the questions under Section 24(3) of the OST Act for a decision of the High Court.</p><p style="text-align: justify;">7. Accordingly, the Tribunal stated the case and referred the aforesaid questions for a decision of the High Court.</p><p style="text-align: justify;">8. Learned Counsel for the petitioner before the High Court submitted that in the transaction in question, there is no contract of sale between the petitioner and the client. It is only a contract of service and the photographs, which the petitioner produced by supplying the same has no commercial value and are not marketable. So, there is no question of a works contract. It is the consistent stand of the petitioner that the present photographs which are produced by the petitioner have no utility or value to any other person than the customer. By developing such photographs, the petitioner only renders service to his customers. The customer pays for the service rendered by the petitioner. It is the contention of the petitioner that his activity is similar to that of consulting firm preparing plan and sketches pursuant to client's specification or professional giving opinion on papers. All those activities are done to serve the client. Therefore, this does not come within the purview of the definition of 'goods', 'sale', 'dealer' or 'works contract'. It is the petitioner's case that he purchased the goods, namely, papers on payment of sales tax. Further levy of tax on the personal service rendered to the client of the petitioner will amount to double taxation. It is also the contention of the petitioner that the paper which is used in the photography are incidental and insignificant.</p><p style="text-align: justify;">9. In support of its contention, learned Counsel for the petitioner has relied on several judgments. First reliance was place on the judgment of the Supreme Court in the case of Sales Tax Officer v. B.C. Kame reported in 39 STC 237(SC). At page 241 of the report, learned Judges of the Supreme Court held that a photographer takes the photograph and develops the negatives and does other photographic work and thereafter supplies the prints to his client. By doing so he cannot be said to enter into a contract for sale of goods. On the other hand, the contract is for use of skill and labour by the photographer to bring about the desired result. Learned Judges held that the job of a photographer is a contract for work and labour and it is not a contract of sale.</p><p style="text-align: justify;">10. Reliance was also placed on a judgment of this High Court in the case of Photo Emporium v. Addl. District Magistrate reported in 77 STC 199 in which this High Court followed the ratio of the judgment of the Supreme Court in the case of B.C. Kame. In that case, the stand of the Revenue was disapproved by the Orissa High Court.</p><p style="text-align: justify;">11. Similar view was taken in 110 STC 145 in the case of Foto Colour Labs Pvt. Ltd. v. Commercial Taxes Officer where the Tribunal held that the transfer of paper in the photograph is purely incidental and payment is only taken to give positive prints and not to get the photo papers. Therefore, the contract in between the petitioner and his client is not a contract of sale, and neither directly or indirectly works contract is involved in the supply of photo papers. Similar view was taken by the West Bengal Taxation Tribunal in the case of Studio Kamalalaya v. Commercial Tax Officer reported in 89 STC 307.</p><p style="text-align: justify;">12. In the case of Bavens v. Onion of India report in 97 STC 161, learned Judges held that when a photographer takes a photograph of his customer, he develops the negative and supplies positive prints in the desired size to the customer. In doing so the photographer uses his own camera and his own film. The negative belongs to the photographer and not to the customer. No basic goods are provided by the customer which are subjected to processing by the photographer so as to make the contract a works contract. There is no accretion to goods or property or the nucleus of a property which belongs to the customer. It is the skill of the photographer which is most important to get the desired result.</p><p style="text-align: justify;">13. Hon'ble Karnataka High Court followed the same principle in the case of Keshoram Surlndranath Photo-mag Pvt. Ltd. v. Assistant Commissioner of Commercial Taxes reported in 121 STC 175. In that judgment, learned Judges of the Karnataka High Court relied on the judgment of the Supreme Court in B.C. Kame's case and came to the conclusion that in the job of the photographer in supplying positive prints to his customer, no works contract is involved and photographs are not marketable or saleable commodity and as such no tax can be levied on it.</p><p style="text-align: justify;">14. Against the said judgment of the Karnataka High Court, the State of Karnataka High Court filed a S.L.P. before the Hon'ble Supreme Court bearing SLP Nos. 6136-6163 of 2000 and the Hon'ble Supreme Court dismissed the SLP on 20th April, 2000.</p><p style="text-align: justify;">15. In the case of Rainbow Colour Lab v. State of M.P. learned Judges of the Hon'ble Supreme Court reiterated its judgment in B.C. Kame's case and came to the following conclusion:</p><p style="text-align: justify;">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.</p><p style="text-align: justify;">Hon'ble Supreme Court in Bharat Sanchar Nigam Ltd. v. Union of India reported in 145 STC 91 again reiterated the principle in B.C. Kame's case and held that the work done by the photographer is only in the nature of a service contract not involving any sale of goods and held that the stand taken by the State cannot be sustained.</p><p style="text-align: justify;">16. Learned Counsel for the petitioner submitted that the photographs taken by the petitioner are not goods which can be sold and is not a marketable commodity like any other goods. When the copies of photographs are made out, they have no utility or value to any other person than the customer. It is already admitted that the papers utilized for photographs are tax paid goods. Therefore, it is contended by the learned Counsel for the petitioner that the work of photography does not come within the purview of works contract as defined in Section 2(jj) of the Orissa Sales Tax Act.</p><p style="text-align: justify;">17. Learned Counsel for the Revenue in this case virtually did not contest the submission made by the learned Counsel for the petitioner and in support of his contention, learned Counsel for the Revenue relied on a decision of the Supreme Court in the case of Imagic Creative Pvt. Ltd. v. Commissioner of Commercial Taxes and Ors. reported in (2008) 10 RC 236. In that judgment, learned Judges held that since the contract in question is a service contract, it is difficult to hold that in a case of this nature, sales tax would be payable on the value of the entire contract irrespective of the element of service provided.</p><p style="text-align: justify;">For the reasons discussed above, we answer the first question in the negative and the second question, in the affirmative. We thus answer both the questions in favour of the assessee and against the Revenue.</p><p style="text-align: justify;">The three revision applications are thus disposed of.</p><p style="text-align: justify;">No costs.</p><p style="text-align: justify;">B.N. Mahapatra, J.</p><p style="text-align: justify;">18. I agree.<p style="text-align: justify;"></p><p style="text-align: justify;">',
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			'pubs' => '106(2008)CLT317; 2008(I)OLR953; (2008)17VST289(Orissa)',
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		'casename' => 'Studio Sujata Vs. Commissioner of Sales Tax',
		'casenote' => 'Sales Tax - Assessment - Contract of Sale - Section 12 (5) of Orissa Sales Tax 1947 - Petitioner carries on business of processing and developing photography - Revenue assessed petitioner under Section 12(5) of Act on ground that activities of petitioner can be called works contract - Petitioner approached to Assistant of Sales Tax on ground that there is no contract of sale between the petitioner and the client, it is only service - Dismissed and affirmed by Tribunal - Hence present petition - Whether Tribunal is right to held that tax is exigible for photographs as execution of works contract or not? - Held, as per precedent laid down by Supreme Court in case of Sales Tax Officer v. B.C. Kame that photographer takes photograph and develops negatives and does other photographic work and thereafter supplies prints to his client - By doing so he cannot be said to enter into contract for sale of goods - Therefore, job of photographer is contract for work and labour and it is not contract of sale - Revenue committed mistake in assessing petitioner under Section 12(5) of Act on basis of contract of sale - Petition disposed of accordingly  - STATE FINANCIAL CORPORATIONS ACT, 1951 [63/1951]. Section 29; [P.K. Tripathy, A.K. Parichha & N.Prusty, JJ] Discharge of loan  Orissa Forest Act (14 of 1972), Section 56  Confiscation of vehicle - Held, The Authorities under Section 56 of the Orissa Forest Act, 1972 are not obliged to release the vehicle from the confiscation proceeding or to pay the sale proceeds of the vehicle after the order of confiscation in favour of Orissa State Financial Corporation when such vehicles were purchased on being financed by the Orissa State Financial Corporation and the loan had not been liquidated by the date of the seizure/confiscation of the vehicle. Concept of first charge or second charge has no applicability when the vehicle is not otherwise disposed of to determine the liabilities of the loanee. On the other hand the vehicle having been found indulged in forest offences was made subject matter of a confiscation proceedings, and therefore, the procedure followed for confiscation of the vehicle and for its sale is punitive in nature and not with a view to give benefit to anybody including the Department which initiated the confiscation proceeding. Apart from that, the claim of the Orissa State Financial Corporation as against its loanee (who had taken the vehicle on hire- purchase agreement) brings the loanee and the sureties within the default clause under the State Financial Corporation Act, 1951 or the heirs and successors of such persons. Procedure is provided in the Act, 1951 and the Rules thereof about the manner in which such loan is to be recovered, and in that context only the vehicle under the hire-purchase agreement is placed as the first charge. If such property is not available for any reason, then the loan is not automatically waived or the loanee and his sureties are not automatically redeemed of the liabilities to repay. The Financial Corporation is concerned with repayment of loan either from the property or persons offered as surety. Thus, a vehicle, which is subject matter of confiscation proceeding under the Act, 1872, being not available to the Orissa State Financial Corporation for adjustment of the unpaid loan, that does not at all bring out an anomalous situation so as to defeat the right of the Orissa State Financial Corporation. Agreement between the Orissa State Financial Corporation and the loanee is a pure and simple contract governed by the provisions of the Contract Act, 1872 read with the provisions in the Act, 1951 and its Rules. On the other hand, a confiscation proceeding under the Act, 1972 is punitive in nature for commission of a forest offence. Thus, by virtue of the provision in Section 56 read with Section 64 (2) of the Act, 1972, the action taken for confiscation of the vehicle cannot be extended to grant protection of the loan advanced by Orissa State Financial Corporation. By doing that it amounts to grant premium to the pick-pockets in as much as, by making payment of the confiscation amount in favour of the Orissa State Financial Corporation the loan burden of the accused of the forest offence is reduced to the extent of the sale proceeds of the vehicle. In other words, on payment of the sale proceeds of the confiscation proceeding to the Orissa State Financial Corporation towards discharge of the loan account of the accused of a forest offence, it would lead to a system to reward him by repayment of his loan. Then it does not become a penalty nor the action become punitive, but it remains as a reward to the accused of forest offence. Such a concept is totally not conceivable from any provision in the Act, 1972 or the Act, 1951. [AIR 2002 Orissa 130 Overruled]. -- STATE FINANCIAL CORPORATIONS ACT, 1951. 
Section 29; Discharge of loan  Orissa Forest Act (14 of 1972), Section 56  Confiscation of vehicle - Held, The Authorities under Section 56 of the Orissa Forest Act, 1972 are not obliged to release the vehicle from the confiscation proceeding or to pay the sale proceeds of the vehicle after the order of confiscation in favour of Orissa State Financial Corporation when such vehicles were purchased on being financed by the Orissa State Financial Corporation and the loan had not been liquidated by the date of the seizure/confiscation of the vehicle. Concept of first charge or second charge has no applicability when the vehicle is not otherwise disposed of to determine the liabilities of the loanee. On the other hand the vehicle having been found indulged in forest offences was made subject matter of a confiscation proceedings, and therefore, the procedure followed for confiscation of the vehicle and for its sale is punitive in nature and not with a view to give benefit to anybody including the Department which initiated the confiscation proceeding. Apart from that, the claim of the Orissa State Financial Corporation as against its loanee (who had taken the vehicle on hire- purchase agreement) brings the loanee and the sureties within the default clause under the State Financial Corporation Act, 1951 or the heirs and successors of such persons. Procedure is provided in the Act, 1951 and the Rules thereof about the manner in which such loan is to be recovered, and in that context only the vehicle under the hire-purchase agreement is placed as the first charge. If such property is not available for any reason, then the loan is not automatically waived or the loanee and his sureties are not automatically redeemed of the liabilities to repay. The Financial Corporation is concerned with repayment of loan either from the property or persons offered as surety. Thus, a vehicle, which is subject matter of confiscation proceeding under the Act, 1872, being not available to the Orissa State Financial Corporation for adjustment of the unpaid loan, that does not at all bring out an anomalous situation so as to defeat the right of the Orissa State Financial Corporation. Agreement between the Orissa State Financial Corporation and the loanee is a pure and simple contract governed by the provisions of the Contract Act, 1872 read with the provisions in the Act, 1951 and its Rules. On the other hand, a confiscation proceeding under the Act, 1972 is punitive in nature for commission of a forest offence. Thus, by virtue of the provision in Section 56 read with Section 64 (2) of the Act, 1972, the action taken for confiscation of the vehicle cannot be extended to grant protection of the loan advanced by Orissa State Financial Corporation. By doing that it amounts to grant premium to the pick-pockets in as much as, by making payment of the confiscation amount in favour of the Orissa State Financial Corporation the loan burden of the accused of the forest offence is reduced to the extent of the sale proceeds of the vehicle. In other words, on payment of the sale proceeds of the confiscation proceeding to the Orissa State Financial Corporation towards discharge of the loan account of the accused of a forest offence, it would lead to a system to reward him by repayment of his loan. Then it does not become a penalty nor the action become punitive, but it remains as a reward to the accused of forest offence. Such a concept is totally not conceivable from any provision in the Act, 1972 or the Act, 1951. [AIR 2002 Orissa 130 Overruled].  -  In that case, the stand of the Revenue was disapproved by the Orissa High Court. 16. Learned Counsel for the petitioner submitted that the photographs taken by the petitioner are not goods which can be sold and is not a marketable commodity like any other goods.',
		'caseanalysis' => null,
		'casesref' => 'Imagic Creative Pvt. Ltd. v. Commissioner of Commercial Taxes and Ors.;',
		'citingcases' => '',
		'counselplain' => '',
		'counseldef' => '',
		'court' => 'Orissa',
		'court_type' => 'HC',
		'decidedon' => '2008-04-02',
		'deposition' => '',
		'favorof' => null,
		'findings' => null,
		'judge' => ' A.K. Ganguly, C.J. and; B.N. Mahapatra, J.',
		'judgement' => '<p>A.K. Ganguly, C.J.</p><p>1. Initially three S.J.Cs. being S.J.C. Nos. 10 of 1997, 8 of 1997 and 9 of 1997 were filed and subsequently renumbered as STREV Nos. 212, 214 and 216 of 2007 respectively. In view of the common questions of facts and law, all the three Revision Applications are heard and disposed of together.</p><p>2. The following questions of law arising out of the order passed by the Orissa Sales Tax Tribunal on 8.12.1993 in Second Appeal Nos. 3345 to 3350 of 1991-92 have been referred to this Hon'ble High Court in terms of the order of this Hon'ble Court dated 24.2.1997. The questions are:</p><p>(i) Whether on the facts and in the circumstances of the case, the Tribunal is right to held that tax is exigible for photographs as execution of works contract ?</p><p>(ii) Whether on the facts and in the circumstances of the case, the conclusion of the Tribunal is perverse due to non-consideration and mis-consideration of facts and law and, therefore, it is liable to be set aside for re-hearing ?</p><p>3. The materials facts out of which those questions arise are that the petitioner carries on the business of processing and developing photography. In the usual course of business, the petitioner takes photographs of persons or of family and then develops the negative by employing his skill and labour and then supplies the photographs to the clients. These photographs which are prepared by the petitioner are not commercial items because they are neither purchased nor sold. However, to develop these photographs employment of skill and labour is essential. It may be mentioned that petitioner does not carry on any sale of photographs of national leaders, God and Goddess.</p><p>4. After the passing of 46th amendment of the Constitution of India and consequent amendments thereto in Orissa Sales Tax Act (OST Act), the Sales Tax Officer, Bhubaneswar-II Circle, Bhubaneswar sent notices to assess the petitioner as an unregistered dealer under Section 12 (5) of the OST Act, inter alia, contending that the petitioner's activities can be called 'works contract'. Pursuant to said notice, the petitioner gave its reply and appeared before the Sales Tax Officer and produced the books of account and documents including Receipts, Purchase Memos, Vouchers, Ledger and thereby denied its liability under the OST Act. The petitioner also submitted objection petitions on various dates i.e. 28.12.1985, 10.1.1986, 20.2.1986 and 29.2.1988 contending, inter alia, that the petitioner has no sales tax liability under OST Act and the notices, which were issued, are without jurisdiction.</p><p>5. Ignoring the said objections of the petitioner, the Sales Tax Officer, Bhubaneswar-II Circle, Bhubaneswar assessed the petitioner as an unregistered dealer, inter alia, holding that the petitioner is liable to pay sales tax as petitioner has been alleged to carry activities of 'works contract'. Therefore, orders of assessment being dated 29.2.1988 for the years 1984-85 (9/84 to 3/85), 1985-86 and 1986- 87 under Section 12(5) of OST Act and under Rule 5 of the Orissa Additional Sales Tax Rules, 1975 were passed and a tax of Rs. 20,765.00 and penalty of Rs. 5,000.00 totalling to Rs. 25,765.00 was imposed on the petitioner. The petitioner then filed the First Appeal before the learned Assistant Commissioner of Sales Tax. The First Appellate Authority by an order dated 27.9.1991 confirmed the levy of tax under the OST Act, but reduced the penalty to Rs. 1250.00. Thereupon, the petitioner filed the Second Appeal before the Orissa Sales Tax Tribunal, Cuttack. The said Tribunal heard the Second Appeal and in course of hearing, the petitioner raised various contentions. Ultimately, the Tribunal upheld the levy of tax but deleted the penalty.</p><p>6. Thereafter the petitioner came up with a reference application under Section 24(1) of the Orissa Sales Tax Act framing certain questions for being referred to the Hon'ble High Court. The said prayer of the petitioner was rejected by the Tribunal. Then the petitioner moved Hon'ble High Court under Section 24(2)(b) of the Orissa Sales Tax Act, 1947 whereupon the High Court directed the Tribunal to state to case and refer the questions under Section 24(3) of the OST Act for a decision of the High Court.</p><p>7. Accordingly, the Tribunal stated the case and referred the aforesaid questions for a decision of the High Court.</p><p>8. Learned Counsel for the petitioner before the High Court submitted that in the transaction in question, there is no contract of sale between the petitioner and the client. It is only a contract of service and the photographs, which the petitioner produced by supplying the same has no commercial value and are not marketable. So, there is no question of a works contract. It is the consistent stand of the petitioner that the present photographs which are produced by the petitioner have no utility or value to any other person than the customer. By developing such photographs, the petitioner only renders service to his customers. The customer pays for the service rendered by the petitioner. It is the contention of the petitioner that his activity is similar to that of consulting firm preparing plan and sketches pursuant to client's specification or professional giving opinion on papers. All those activities are done to serve the client. Therefore, this does not come within the purview of the definition of 'goods', 'sale', 'dealer' or 'works contract'. It is the petitioner's case that he purchased the goods, namely, papers on payment of sales tax. Further levy of tax on the personal service rendered to the client of the petitioner will amount to double taxation. It is also the contention of the petitioner that the paper which is used in the photography are incidental and insignificant.</p><p>9. In support of its contention, learned Counsel for the petitioner has relied on several judgments. First reliance was place on the judgment of the Supreme Court in the case of Sales Tax Officer v. B.C. Kame reported in 39 STC 237(SC). At page 241 of the report, learned Judges of the Supreme Court held that a photographer takes the photograph and develops the negatives and does other photographic work and thereafter supplies the prints to his client. By doing so he cannot be said to enter into a contract for sale of goods. On the other hand, the contract is for use of skill and labour by the photographer to bring about the desired result. Learned Judges held that the job of a photographer is a contract for work and labour and it is not a contract of sale.</p><p>10. Reliance was also placed on a judgment of this High Court in the case of Photo Emporium v. Addl. District Magistrate reported in 77 STC 199 in which this High Court followed the ratio of the judgment of the Supreme Court in the case of B.C. Kame. In that case, the stand of the Revenue was disapproved by the Orissa High Court.</p><p>11. Similar view was taken in 110 STC 145 in the case of Foto Colour Labs Pvt. Ltd. v. Commercial Taxes Officer where the Tribunal held that the transfer of paper in the photograph is purely incidental and payment is only taken to give positive prints and not to get the photo papers. Therefore, the contract in between the petitioner and his client is not a contract of sale, and neither directly or indirectly works contract is involved in the supply of photo papers. Similar view was taken by the West Bengal Taxation Tribunal in the case of Studio Kamalalaya v. Commercial Tax Officer reported in 89 STC 307.</p><p>12. In the case of Bavens v. Onion of India report in 97 STC 161, learned Judges held that when a photographer takes a photograph of his customer, he develops the negative and supplies positive prints in the desired size to the customer. In doing so the photographer uses his own camera and his own film. The negative belongs to the photographer and not to the customer. No basic goods are provided by the customer which are subjected to processing by the photographer so as to make the contract a works contract. There is no accretion to goods or property or the nucleus of a property which belongs to the customer. It is the skill of the photographer which is most important to get the desired result.</p><p>13. Hon'ble Karnataka High Court followed the same principle in the case of Keshoram Surlndranath Photo-mag Pvt. Ltd. v. Assistant Commissioner of Commercial Taxes reported in 121 STC 175. In that judgment, learned Judges of the Karnataka High Court relied on the judgment of the Supreme Court in B.C. Kame's case and came to the conclusion that in the job of the photographer in supplying positive prints to his customer, no works contract is involved and photographs are not marketable or saleable commodity and as such no tax can be levied on it.</p><p>14. Against the said judgment of the Karnataka High Court, the State of Karnataka High Court filed a S.L.P. before the Hon'ble Supreme Court bearing SLP Nos. 6136-6163 of 2000 and the Hon'ble Supreme Court dismissed the SLP on 20th April, 2000.</p><p>15. In the case of Rainbow Colour Lab v. State of M.P. learned Judges of the Hon'ble Supreme Court reiterated its judgment in B.C. Kame's case and came to the following conclusion:</p><p>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.</p><p>Hon'ble Supreme Court in Bharat Sanchar Nigam Ltd. v. Union of India reported in 145 STC 91 again reiterated the principle in B.C. Kame's case and held that the work done by the photographer is only in the nature of a service contract not involving any sale of goods and held that the stand taken by the State cannot be sustained.</p><p>16. Learned Counsel for the petitioner submitted that the photographs taken by the petitioner are not goods which can be sold and is not a marketable commodity like any other goods. When the copies of photographs are made out, they have no utility or value to any other person than the customer. It is already admitted that the papers utilized for photographs are tax paid goods. Therefore, it is contended by the learned Counsel for the petitioner that the work of photography does not come within the purview of works contract as defined in Section 2(jj) of the Orissa Sales Tax Act.</p><p>17. Learned Counsel for the Revenue in this case virtually did not contest the submission made by the learned Counsel for the petitioner and in support of his contention, learned Counsel for the Revenue relied on a decision of the Supreme Court in the case of Imagic Creative Pvt. Ltd. v. Commissioner of Commercial Taxes and Ors. reported in (2008) 10 RC 236. In that judgment, learned Judges held that since the contract in question is a service contract, it is difficult to hold that in a case of this nature, sales tax would be payable on the value of the entire contract irrespective of the element of service provided.</p><p>For the reasons discussed above, we answer the first question in the negative and the second question, in the affirmative. We thus answer both the questions in favour of the assessee and against the Revenue.</p><p>The three revision applications are thus disposed of.</p><p>No costs.</p><p>B.N. Mahapatra, J.</p><p>18. I agree.<p></p><p>',
		'observations' => null,
		'overruledby' => null,
		'prhistory' => '',
		'pubs' => '106(2008)CLT317; 2008(I)OLR953; (2008)17VST289(Orissa)',
		'ratiodecidendi' => '',
		'respondent' => 'Commissioner of Sales Tax',
		'sub' => 'Sales Tax/VAT',
		'link' => null,
		'circuit' => null
	)
)
$casename_url = 'studio-sujata-vs-commissioner-sales-tax'
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	(int) 0 => '531271',
	(int) 1 => 'studio-sujata-vs-commissioner-sales-tax'
)
$url = 'https://sooperkanoon.com/case/amp/531271/studio-sujata-vs-commissioner-sales-tax'
$ctype = ' High Court'
$caseref = 'Imagic Creative Pvt. Ltd. v. Commissioner of Commercial Taxes and Ors.<br>'
$content = array(
	(int) 0 => '<p>A.K. Ganguly, C.J.',
	(int) 1 => '<p>1. Initially three S.J.Cs. being S.J.C. Nos. 10 of 1997, 8 of 1997 and 9 of 1997 were filed and subsequently renumbered as STREV Nos. 212, 214 and 216 of 2007 respectively. In view of the common questions of facts and law, all the three Revision Applications are heard and disposed of together.',
	(int) 2 => '<p>2. The following questions of law arising out of the order passed by the Orissa Sales Tax Tribunal on 8.12.1993 in Second Appeal Nos. 3345 to 3350 of 1991-92 have been referred to this Hon'ble High Court in terms of the order of this Hon'ble Court dated 24.2.1997. The questions are:',
	(int) 3 => '<p>(i) Whether on the facts and in the circumstances of the case, the Tribunal is right to held that tax is exigible for photographs as execution of works contract ?',
	(int) 4 => '<p>(ii) Whether on the facts and in the circumstances of the case, the conclusion of the Tribunal is perverse due to non-consideration and mis-consideration of facts and law and, therefore, it is liable to be set aside for re-hearing ?',
	(int) 5 => '<p>3. The materials facts out of which those questions arise are that the petitioner carries on the business of processing and developing photography. In the usual course of business, the petitioner takes photographs of persons or of family and then develops the negative by employing his skill and labour and then supplies the photographs to the clients. These photographs which are prepared by the petitioner are not commercial items because they are neither purchased nor sold. However, to develop these photographs employment of skill and labour is essential. It may be mentioned that petitioner does not carry on any sale of photographs of national leaders, God and Goddess.',
	(int) 6 => '<p>4. After the passing of 46th amendment of the Constitution of India and consequent amendments thereto in Orissa Sales Tax Act (OST Act), the Sales Tax Officer, Bhubaneswar-II Circle, Bhubaneswar sent notices to assess the petitioner as an unregistered dealer under Section 12 (5) of the OST Act, inter alia, contending that the petitioner's activities can be called 'works contract'. Pursuant to said notice, the petitioner gave its reply and appeared before the Sales Tax Officer and produced the books of account and documents including Receipts, Purchase Memos, Vouchers, Ledger and thereby denied its liability under the OST Act. The petitioner also submitted objection petitions on various dates i.e. 28.12.1985, 10.1.1986, 20.2.1986 and 29.2.1988 contending, inter alia, that the petitioner has no sales tax liability under OST Act and the notices, which were issued, are without jurisdiction.',
	(int) 7 => '<p>5. Ignoring the said objections of the petitioner, the Sales Tax Officer, Bhubaneswar-II Circle, Bhubaneswar assessed the petitioner as an unregistered dealer, inter alia, holding that the petitioner is liable to pay sales tax as petitioner has been alleged to carry activities of 'works contract'. Therefore, orders of assessment being dated 29.2.1988 for the years 1984-85 (9/84 to 3/85), 1985-86 and 1986- 87 under Section 12(5) of OST Act and under Rule 5 of the Orissa Additional Sales Tax Rules, 1975 were passed and a tax of Rs. 20,765.00 and penalty of Rs. 5,000.00 totalling to Rs. 25,765.00 was imposed on the petitioner. The petitioner then filed the First Appeal before the learned Assistant Commissioner of Sales Tax. The First Appellate Authority by an order dated 27.9.1991 confirmed the levy of tax under the OST Act, but reduced the penalty to Rs. 1250.00. Thereupon, the petitioner filed the Second Appeal before the Orissa Sales Tax Tribunal, Cuttack. The said Tribunal heard the Second Appeal and in course of hearing, the petitioner raised various contentions. Ultimately, the Tribunal upheld the levy of tax but deleted the penalty.',
	(int) 8 => '<p>6. Thereafter the petitioner came up with a reference application under Section 24(1) of the Orissa Sales Tax Act framing certain questions for being referred to the Hon'ble High Court. The said prayer of the petitioner was rejected by the Tribunal. Then the petitioner moved Hon'ble High Court under Section 24(2)(b) of the Orissa Sales Tax Act, 1947 whereupon the High Court directed the Tribunal to state to case and refer the questions under Section 24(3) of the OST Act for a decision of the High Court.',
	(int) 9 => '<p>7. Accordingly, the Tribunal stated the case and referred the aforesaid questions for a decision of the High Court.',
	(int) 10 => '<p>8. Learned Counsel for the petitioner before the High Court submitted that in the transaction in question, there is no contract of sale between the petitioner and the client. It is only a contract of service and the photographs, which the petitioner produced by supplying the same has no commercial value and are not marketable. So, there is no question of a works contract. It is the consistent stand of the petitioner that the present photographs which are produced by the petitioner have no utility or value to any other person than the customer. By developing such photographs, the petitioner only renders service to his customers. The customer pays for the service rendered by the petitioner. It is the contention of the petitioner that his activity is similar to that of consulting firm preparing plan and sketches pursuant to client's specification or professional giving opinion on papers. All those activities are done to serve the client. Therefore, this does not come within the purview of the definition of 'goods', 'sale', 'dealer' or 'works contract'. It is the petitioner's case that he purchased the goods, namely, papers on payment of sales tax. Further levy of tax on the personal service rendered to the client of the petitioner will amount to double taxation. It is also the contention of the petitioner that the paper which is used in the photography are incidental and insignificant.',
	(int) 11 => '<p>9. In support of its contention, learned Counsel for the petitioner has relied on several judgments. First reliance was place on the judgment of the Supreme Court in the case of Sales Tax Officer v. B.C. Kame reported in 39 STC 237(SC). At page 241 of the report, learned Judges of the Supreme Court held that a photographer takes the photograph and develops the negatives and does other photographic work and thereafter supplies the prints to his client. By doing so he cannot be said to enter into a contract for sale of goods. On the other hand, the contract is for use of skill and labour by the photographer to bring about the desired result. Learned Judges held that the job of a photographer is a contract for work and labour and it is not a contract of sale.',
	(int) 12 => '<p>10. Reliance was also placed on a judgment of this High Court in the case of Photo Emporium v. Addl. District Magistrate reported in 77 STC 199 in which this High Court followed the ratio of the judgment of the Supreme Court in the case of B.C. Kame. In that case, the stand of the Revenue was disapproved by the Orissa High Court.',
	(int) 13 => '<p>11. Similar view was taken in 110 STC 145 in the case of Foto Colour Labs Pvt. Ltd. v. Commercial Taxes Officer where the Tribunal held that the transfer of paper in the photograph is purely incidental and payment is only taken to give positive prints and not to get the photo papers. Therefore, the contract in between the petitioner and his client is not a contract of sale, and neither directly or indirectly works contract is involved in the supply of photo papers. Similar view was taken by the West Bengal Taxation Tribunal in the case of Studio Kamalalaya v. Commercial Tax Officer reported in 89 STC 307.',
	(int) 14 => '<p>12. In the case of Bavens v. Onion of India report in 97 STC 161, learned Judges held that when a photographer takes a photograph of his customer, he develops the negative and supplies positive prints in the desired size to the customer. In doing so the photographer uses his own camera and his own film. The negative belongs to the photographer and not to the customer. No basic goods are provided by the customer which are subjected to processing by the photographer so as to make the contract a works contract. There is no accretion to goods or property or the nucleus of a property which belongs to the customer. It is the skill of the photographer which is most important to get the desired result.',
	(int) 15 => '<p>13. Hon'ble Karnataka High Court followed the same principle in the case of Keshoram Surlndranath Photo-mag Pvt. Ltd. v. Assistant Commissioner of Commercial Taxes reported in 121 STC 175. In that judgment, learned Judges of the Karnataka High Court relied on the judgment of the Supreme Court in B.C. Kame's case and came to the conclusion that in the job of the photographer in supplying positive prints to his customer, no works contract is involved and photographs are not marketable or saleable commodity and as such no tax can be levied on it.',
	(int) 16 => '<p>14. Against the said judgment of the Karnataka High Court, the State of Karnataka High Court filed a S.L.P. before the Hon'ble Supreme Court bearing SLP Nos. 6136-6163 of 2000 and the Hon'ble Supreme Court dismissed the SLP on 20th April, 2000.',
	(int) 17 => '<p>15. In the case of Rainbow Colour Lab v. State of M.P. learned Judges of the Hon'ble Supreme Court reiterated its judgment in B.C. Kame's case and came to the following conclusion:',
	(int) 18 => '<p>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.',
	(int) 19 => '<p>Hon'ble Supreme Court in Bharat Sanchar Nigam Ltd. v. Union of India reported in 145 STC 91 again reiterated the principle in B.C. Kame's case and held that the work done by the photographer is only in the nature of a service contract not involving any sale of goods and held that the stand taken by the State cannot be sustained.',
	(int) 20 => '<p>16. Learned Counsel for the petitioner submitted that the photographs taken by the petitioner are not goods which can be sold and is not a marketable commodity like any other goods. When the copies of photographs are made out, they have no utility or value to any other person than the customer. It is already admitted that the papers utilized for photographs are tax paid goods. Therefore, it is contended by the learned Counsel for the petitioner that the work of photography does not come within the purview of works contract as defined in Section 2(jj) of the Orissa Sales Tax Act.',
	(int) 21 => '<p>17. Learned Counsel for the Revenue in this case virtually did not contest the submission made by the learned Counsel for the petitioner and in support of his contention, learned Counsel for the Revenue relied on a decision of the Supreme Court in the case of Imagic Creative Pvt. Ltd. v. Commissioner of Commercial Taxes and Ors. reported in (2008) 10 RC 236. In that judgment, learned Judges held that since the contract in question is a service contract, it is difficult to hold that in a case of this nature, sales tax would be payable on the value of the entire contract irrespective of the element of service provided.',
	(int) 22 => '<p>For the reasons discussed above, we answer the first question in the negative and the second question, in the affirmative. We thus answer both the questions in favour of the assessee and against the Revenue.',
	(int) 23 => '<p>The three revision applications are thus disposed of.',
	(int) 24 => '<p>No costs.',
	(int) 25 => '<p>B.N. Mahapatra, J.',
	(int) 26 => '<p>18. I agree.<p>',
	(int) 27 => '<p>'
)
$paragraphAfter = (int) 1
$cnt = (int) 28
$i = (int) 27
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