JINDAL PHOTO LTD Vs. COMMISSIONER COMMRCIAL TAXES

JUDGEMENT

(1.) This is an appeal filed against annexure B order issued by the Commissioner of Commercial Taxes under Section 94 of the Kerala Value Added Tax Act, 2003. The appellant, a dealer in photographic equipments, filed an application for clarification as to whether "mini lab with it's accessories" sold by them answers the description of "machinery for photography" covered by entry 83(60) of the Third Schedule to the KVAT Act. The Commissioner clarified against the appellant holding that the products sold by the appellant are not photographic machinery inasmuch as the items are not used for taking photographs. It is this order produced as annexure B against which this appeal is filed. We have heard Sri K. I. Mayankutty Mather, counsel appearing for the appellant and Special Government Pleader appearing for the respondent. The relevant entry of the Third Schedule to the KVAT Act on which clarification is sought is the following:

(2.) The product description of the appellant is shown in annexure C which is a computer system used to develop, enlarge and take prints of photographs from exposed films and from digital chips. The appellant calls the whole system as "digital minilab frontier 550". There is no dispute that the work done in the machinery is development of photographs from exposed films and digital chips by using photographic paper loaded in the machine. The computer attached to it controls the timing of exposure. The Commissioner in his order took the view that machinery for photography is the machine used for taking photographs, i.e., exposing the object to the film or to record the image in the digital chip. The sum and substance of the order is that what is covered by machinery for photography is essentially camera. We are unable to uphold the finding of the Commissioner because camera, though is also a photographic machinery, is not in common parlance described as a photographic machinery, but is called camera as such. Further, machinery for photography should be taken to include all equipment and machinery used to take photograph, whether it be the developer or the printer or an integrated unit providing for development and printing of photo from exposed films and recorded digital chips. The appellant is a well known company making and marketing photographic equipment. The customers purchase the same and set up colour photo developing labs. Without the machinery purchased from the appellant, the colour photo labs cannot develop and supply photographs from exposed films and recorded digital chips provided by customers. We are of the view that the equipment sold by the appellant for developing and printing of photographs answers the description of machinery for photography. However, we notice from the photocopy of the product produced in court that the appellant is supplying the machine with attachment of computer and monitor. Neither the computer nor monitor is a photographic machinery and therefore, it is not assessable under entry 83(60) of the Third Schedule to the KVAT Act. However, so much of the machinery which are used for development and printing of photos are assessable under entry 83(60) of the Third Schedule to the KVAT Act until the entry was deleted from the Third Schedule with effect from January 1, 2006. The appeal is allowed as above modifying the order of the Commissioner to the above extent and with direction to the assessing officer to bifurcate the turnover of computer and monitor from the turnover of photographic equipments and assess the same at the appropriate rate.