ORIENT PHOTO ART STUDIO Vs. STATE OF ORISSA

JUDGEMENT

(1.) AT the instance of the assessee, the Additional Sales Tax Tribunal has stated the cases and referred the following question under section 24 (1) of the Orissa Sales Tax Act of 1947 (hereinafter referred to as the "act") for determination of this court :

(2.) THESE six references relate to the quarters ending 31st December, 1964, to 31st March, 1966. The assessee is a photographer who takes photographs of customers, develops the films, prints the same and supplies printed copies of the photographs to the customers. He also sells films.

(3.) THERE appears to be a sharp division in the judicial opinion on the point regarding liability of the transactions of the type before us to sales tax. The Madhya Pradesh High Court in D. Masanda and Co. v. Commissioner of Sales Tax ([1957] 8 S. T. C. 370) took the view that when a customer goes to a photographer for being photographed and for copies of photographs on payment, the substance of the contract between him and the photographer is not the performance of skilled services but the supply of finished goods. The Patna High Court (M. Ghosh v. State of Bihar ([1961] 12 S. T. C. 154)) took into consideration several English cases as also a decision of the High Court of Australia (Federal Commissioner of Taxation v. Riley (53 Com. L. R. 69)) and held that the photographer who took photographs and sold printed copies of them to customers was liable to sales tax under the Bihar Act. The Madras High Court in the case of B. V. Bhatta v. State of Madras ([1965] 16 S. T. C. 441) took the view that when a customer goes to a photographer's studio and engages the photographer's service to take a picture, he was not bargaining merely for the special skill which the photographer had to produce a negative, but he was really asking for supply from that negative as many copies of the finished positives as the customer required and, therefore, held that the transaction was exigible to sales tax. The Gujarat High Court in the case of Chelaram Hasomal v. State of Gujarat ([1965] 16 S. T. C. 1021) approved the principle indicated in the cases reported in D. Masanda & Co. v. Commissioner of Sales Tax ([1957] 8 S. T. C. 370) and M. Ghosh v. State of Bihar ([1961] 12 S. T. C. 154 ). Similarly, the Madras High Court in a later case, Eastern Photo Studio v. State of Madras ([1970] 25 S. T. C. 376), approved the principles laid down in the aforesaid Patna decision. The Bombay High Court in the case of Camera House v. State of Maharashtra ([1970] 25 S. T. C. 354), however, differed from the earlier Madhya Pradesh case ( D. Masanda & Co. v. Commissioner of Sales Tax ([1957] 8 S. T. C. 370)), the Patna case (M. Ghosh v. State of Bihar ([1961] 12 S. T. C. 154)), as also the Madras decision reported in B. V. Bhatta v. State of Madras ([1965] 16 S. T. C. 441) and proceeded to classify the transactions of the photographer into three groups. The Madhya Pradesh decision relied upon on behalf of the assessee before the Tribunal, B. C. Kame v. Assistant Sales Tax Officer ([1971] 28 S. T. C. 1), directly supports the view of the assessee that such transactions are not liable to sales tax.