PHOTO EMPORIUM Vs. ADDITIONAL DISTRICT MAGISTRATE CUTTACK

JUDGEMENT

(1.) THE petitioner which is a proprietorship firm and has the business of taking photographs of customers, developing the films exposed by him as also other films exposed by the customers, making out prints and enlargements out of the negatives and supplying them to customers, was assessed to sales tax for the years 1962-63 to 1964-65 under the Orissa Sales Tax Act. The orders of assessment were challenged in appeal wherein remand orders were passed for fresh assessment. In fresh assessment, the assessment orders annexed to this petition as annexures-3/h, 3/i and 3/j for the years ending 31st March, 1963, 31st March, 1964 and 31st March, 1965, were passed. The demands raised under the assessments having not being paid, a recovery proceeding was started against the petitioner under the Orissa Public Demand Recovery Act, 1962. The certificate was set aside by the certificate officer holding that the assessing officer was wrong to assess sales tax at the rate of 30 per cent though finished photographs are taxable at the rate of 5 per cent and that the petitioner had not also collected tax at the rate of 10 per cent. He thus came to the conclusion that the petitioner had paid more than the amount which he was required to pay and hence dropped the certificate under section 9 of the Orissa Public Demand Recovery Act. In appeal preferred by the department, the appellate authority remanded the matter to the certificate officer holding that the certificate officer though had authority to determine whether the demand raised was a public demand or not yet had no authority to challenge the assessments under the Orissa Sales Tax Act for which the forums are provided under that Act. In the petition before us, both the orders of assessments and the certificate proceeding are assailed as being without jurisdiction.

(2.) THE sole submission urged by Mr. Bibek Mohanti, learned counsel appearing for the petitioner, is that sale of photographs is not a contract for sale of goods. He has urged that taking photographs, developing the negatives and printing the same are primarily works of art and skill and that in sale of photographs there is no contract for sale of a finished product as such but the contract is essentially one of executing a work of art and skill and hence such a transaction is not liable to sales tax. In support of the submission, he placed reliance on [1977] 39 STC 237 (Assistant Sales Tax Officer v. B. C. Kame), where the Supreme Court observed, dealing with a similar question :

(3.) MR . A. B. Misra, learned Standing Counsel appearing for the Revenue, has urged that since the orders of assessments were passed on remand, it is not known whether the petitioner has moved any appeal against the orders and hence without proper facts having been placed before the court, a conclusion should not be reached of the demand being not collectible. The submission has no substance since admittedly the assessment orders as also the demand notices were of 28th May, 1966 and the certificate case against the petitioner was started in the year 1978. The Revenue has not filed any counter-affidavit against the pleadings of the petitioner that the amounts as per the assessment order are being attempted to be collected through certificate proceeding and hence this case has to be decided on the pleadings as made by the petitioner. Besides, the question raised by the petitioner is a pure question of law and the conclusion as reached is wholly based upon the facts as disclosed in the very orders of assessment and hence we do not see any reason to allow either the assessment orders or the certificate proceedings to continue to stand.