The main legal point established in the judgment is that the processing and supplying of photographs constituted a works contract where the transfer of property in paper was only incidental, and the photographs were not marketable or saleable commodities, leading to the conclusion that no tax could be levied under Entry 25 of the Sixth Schedule.

V. K. SINGHAL, J.

( 1 ) ALL these appeals are disposed of by this common judgment since the controversy is common.

( 2 ) THE facts of Keshoram Surindranath Photo-Mag (P) Ltd. , are taken into consideration. The appellant carries on the business of taking photographs and supplying prints thereof, making enlargements from negatives given by the customers and preparing positive prints from the negatives brought by the customers. A consolidated amount is charged depending upon the work involved and the size and number of prints required. It is contended that the photographs of one person cannot be sold to another as it is a non-marketable commodity and the contract is one of pure skill and labour from which the desired results are obtained. After the photograph is taken or film is "received developing and processing of the film is done under controlled temperature, chemical involvement and time-limit. The quality of print is the result of technical knowledge and expertise. After the film is exposed it passes through four chemical stages, (a) Developer, where the latest image or immersion is developed ; (b) Bleach, where the film is colour dried ; (c) Fixture, where colour dried film is permanently fixed with the colour ; and (d) Stabiliser, where the image is permanently imposed in a particular position.

( 3 ) THE film is washed, dried and the chemicals used are diffused with emulsion creating light and shade on the negative of the film. The dried negative is taken from the printer processing machine for printing and at that point the colour and density of the negative is examined. The prints on placed before the paper processor undergo further two stages requiring precise timing and accurate temperature. Here, the chemicals used in the course of processing gets diffused on deep emulsion for obtaining the best finish and obtaining the colours on the print which is later washed and dried and subsequently cut into proper sizes. It is submitted that it is expertise/expert knowledge with which the customer is concerned and not with the paper or the chemicals used therein. The return in form 4 for assessment year 1992-93 is filed claiming the exemption from payment of tax on the supply of photographs, photo prints and photo negatives. Proposition notice in form 31-A was issued on February 22, 1994 proposing to levy tax on the activity of processing and supplying of photographs, photo prints and photo negatives at the rate of 5 per cent under entry 25 of the Sixth Schedule. Turnover tax at 1. 25 per cent was also proposed under section 6-B. Entry 25 of the Sixth Schedule provides processing and supplying of photographs, photo prints and photo negatives.

( 4 ) IT is pointed out that a circular dated October 24, 1989 was issued by the Commissioner of commercial Taxes that form 37 cannot be issued for purchase of raw material to be used by the dealer in the activity of developing the photographs. The act of developing the photograph was considered to be his work of skill and art. The benefit under Section 5-A could not be claimed as no component part or raw material or any other goods are used in the manufacture, inside the state for sale. Section 5-B provides for levy of tax on transfer of property in goods, whether as goods are in some other form involved in the execution of works contract and it reads as under :

5-B. Levy of tax on transfer of property in goods (whether as goods or in some other form) involved in the execution of works contracts.--Notwithstanding anything contained in sub-section (1) or Sub-section (3) or Sub-section (3c) of Section 5, but subject to Sub-section (4), (5) or (6) of the said section, every dealer shall pay for each year, a tax under this Act on his taxable turnover of transfer of property in goods (whether as goods or in some other form) involved in the execution of works contract mentioned in column (2) of the Sixth Schedule at the rates specified in the corresponding entries in column (3) of the sai

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