Easten Photo Studio and Eastern News Photo Service vs The State of Madras

Ramaprasada Rao, J.—In these two writ petitions the petitioner is Eastern Photo Studio and Eastern News Photo Service, which is a

partner ship concern carrying on an avocation as camera artists and photography. They gather assignments from their customers which are

entrusted to them and particularly for the purpose of taking photographs in meetings, functions, parties, events etc. In the course of such an

avocation of the petitioner, it necessarily purchases photographic films, papers, chemicals, mounts, albums, etc. from other photographic dealers

and makes use of them in the course of its profession or avocation. Its case is that it is not a dealer in photographic materials. The petitioner urges

that taking of photographs is a work of art and not the result of a mere mechanical process. Skill is required in selecting suitable artistic angles, in

making correct exposures, and also in the development of negatives with proper control of time and temperature, and in making enlargements of

such photographs, if it becomes necessary, keeping an eye on composition etc. It is stated that the totality of the undertaking by the petitioner

involves only labour and exercise of due diligence and care and therefore the under takings of the petitioner, as set out above, are purely contracts

for work and labour. The petitioner denies that there is any element of sale of any material and much less photographic materials when it so carries

on its avocation, and its works being creations of art, it ought to be exempted and cannot be called upon to pay any sales tax in respect of such

dealings. In fact, the petitioner, though it was carrying on business from the year 1959-60, was firmly of the view that its transactions would not

attract tax and therefore it did not even submit a return. But on 31st October, 1964, the petitioner enquired whether there was any cause for its

turnover being assessed to sales tax and it was the self-enquiry on its part which provoked the revenue to call upon the petitioner to submit its

accounts from the date when it started its business. On 30th March, 1965, the petitioner produced certain entries relating to its business

transactions for the period commencing from 1st January, 1960, and ending with 31st March, 1960. As no further material was placed before the

assessing authorities, the taxing officer, after considering the merits of the contentions of the petitioner that no sale was involved in the bargain,

ultimately held the view that every transaction of the petitioner in the course of its business involved a sale and therefore estimated the turnover of

the petitioner for the whole year on the basis of the past material produced by the assessee for the period as above. W.P. No. 1753 of 1965 is to

quash the order of the Assistant Commercial Tax Officer, Mannady East Section, Madras, dated 30th March, 1965, by the issuance of a writ of

certiorari. In W.P. No. 3014 of 1966 the petitioner is seeking for a similar writ, but to quash the summons dated 30th November, 1966, issued by

the same officer in relation to the dealings or transactions of the petitioner.

Learned counsel for the petitioner urges that on an overall consideration of the merits and the aspects of the transactions involved in by the

petitioner it would appear that there is no element of sale in them, and as a matter of fact what is done by the petitioner in the course of its exercise

of its profession is only to bring out a product of art and pass it on for consideration to the relevant customer who initiates the process. It is also

urged that as photography involves the exercise of skill and diligence, it has to be necessarily treated as a work of art, and so treated, the

transactions of the petitioner can never take colour as transactions of sale. Reliance was placed upon the decision in D. P. Roy Chowihury v. State

of Madras [1962] 13 S.T.C. 866. It was also contended that under Rule 5(3) of the Madras General Sales Tax Rules, 1959, the contract for

supplying photos exposed by the photographer himself having been treated and characterised by the executive as a works contract, it is not open

to the revenue as at present to treat such dealings as equivalent to a sale.

We shall now take up the last contention. A given transaction has to be adjudged on its own merits without reference to its antecedent history

and particularly without having regard to the view held by the executive at one time regarding its nature. For what reasons a photographic business

was considered to be a works contract are not clear. But it is a fundamental norm of interpretation of words in a statute that it should be explained

away and understood in the light of the facts relating to it and connected with it. It is therefore not availing for the petitioner to contend that since at

one time the transactions of a photographer in taking photographs of others were treated as works contracts, they should be dealt with as such

irrespective of any other conspicuous feature present in them. We are of the view that the transactions in question, as in any other case, have to be

viewed afresh in the light of the facts and material available on. record and necessary inferences drawn therefrom as to their nature and character,

in the light of the existing law. We are not therefore persuaded to agree to the contention of the learned counsel for the petitioner that the

transactions in question-ought to be ipso facto dealt with and treated as contracts of work and labour because they were viewed at some earlier

point of time as such contracts.

The other contention is rather attractive and interesting. The case of the petitioner is that notwithstanding the user of photographic materials in the

process of taking of photograph and multiplying it by a mechanical process for taking copies thereon, yet at the initial stages a certain degree of

skill is required and it pervades the process throughout and therefore the resultant product must be treated as a product of work and art and not as

one which was the subject-matter of the bargain in a sale between the photographer and his customer. No doubt, a certain amount of skill or

expertise is required for an experienced photographer to take pictures. But this is not the only criterion to judge whether the product of photo

graphy is a work of art or skill. It cannot be said that any aesthetic or artistic taste or occupation is involved in the avocation of a photographer. It

is in the course of its business, in any event, that it is called upon to take photographs of particularised objects at the wish and on the assignment of

a particular customer. The substance of trading activity of a photographer consists in bringing out a finished product, namely a photograph from the

negative. The materials used in the process are ingrained in the finished article and form part and parcel of it and not a mere ancillary or collateral

material appurtenant to the contract. In this view, it appears to us that it is not an absolute necessity for a photo grapher to be a dealer in

photographic materials as well. Without being a dealer in such material he can be a photographer, for he could secure the same from others. If he

trades in such materials as well, it would add to his business convenience. But the fact remains that the vocation of photography is not interlocked

or interlaced with his dealings in photographic materials. In the ultimate analysis the trade involves the production of a marketable commodity,

though it may be of interest to particular persons concerned. We are however satisfied that a commercial activity is reflected in the entire process.

It is not a case of work and labour. When a customer approaches a photographer and wants him to take a photograph and pays for it and the

copies therefrom, no skill is involved, and even if involved, it bears an infinitesimally small proportion to the totality of the bargain. The essence of

the deal is a sale of a finished product and not a case where work and labour alone is involved. In D. P. Roy Chowdhwy v. State of Madras

[1962] 13 S.T.C. 866, Veeraswami, J., as he then was, was dealing with a case of the supply of two bronze casts to the State Government. Those

casts were not pieces of sculpture which were being forged by the assessee there regularly and with a commercial motive behind it. In that case the

learned Judge expressly pointed out that the primary element which was lacking in that case was the trade or commerce aspect in the transaction.

There the assessee was a well-known sculptor. The two bronze casts were the statue of Mahatma Gandhi and the other the ""Triumph of Labour"".

On the question whether the petitioner was liable to sales tax on the value of such transactions recovered by him from the State Government, the

learned Judge held on the facts that the petitioner was not a dealer, and in supplying those two pieces of sculpture, he did not effect sales of them in

the course of trade or business in such casts. But reliance is placed upon a passage, at page 869, appearing in the said judgment which reads as

follows :

Another test, or way of looking at the problem, may be to see whether the article produced has such a general market or it will be useful or

valuable only to the person who places an order for its production.

The latter portion of the observation is pressed into service, but torn from its context. The entire case revolved on the essential fact that the court

there was dealing with two pieces of art and sculpture and it is in the light of such facts the test referred to was laid by the learned Judge. In the

instant case, however, though the photograph may be useful to the person who places an order for its production, yet, as already stated, it is not a

piece of art or the product of skill, but it appears to us to be the result of a mechanical process which a photographer indulges in at the behest of

his customer.

The case under review, however, squarely falls within the ratio of the decision of a Division Bench of our court in B. V. Bhatta v. State of

Madras [1965] 16 S.T.C. 441. There the petitioner was having a photo house and the question raised was whether the supply of photos and

photo copies by a professional photographer to his customers was really an execution of a work of art and whether the bargain by the

photographer with his customers was really a bargain for work and labour and not sale of specific goods or chattel. Ramakrishnan, J., speaking for

the Bench, after elaborately considering the judicial precedents both in India and elsewhere, came to the conclusion that in almost all cases, the

question whether the concept of sale is present in a given case will be primarily a question of fact. He added that when a customer goes to a

photographer''s studio and engages the photographer''s services to take a picture, he is bargaining not merely for the special skill which the

photographer has, to produce a negative, but also to supply from that negative as many copies of the finished positives as the customer may

require. The contract in such a case is a contract for sale of goods and not a contract for work and labour. To complete the discussion, it would be

more useful to quote the pithy expression of the learned Judges of the Australian High Court in Federal Commissioner of Taxation v. Riley 53

C.L.R. 69 where the learned Judges observed, noticing a transaction similar to that in the instant case :

That the transaction is a sale is not, and doubtless could not be, disputed.

In fact, the learned Government Pleader brought to our notice two other decisions of two different High Courts, one of the Bombay High Court

and the other of the Patna High Court reported respectively in Chelaram Hasomal v. State of Gujarat [1965] 16 S.T.C. 1021 and M. Ghosh v.

State of Bihar [1961] 12 S.T.C. 154 which also take a view similar to that taken by this court in B.V. Bhatta v. State of Madras [1965] 16 S.T.C.

441.

In the light of the discussion as above and the prevailing precedents we are of the view that the contention of the petitioner that its dealings

should be characterised as dealings resulting from work and labour is not acceptable to us. The writ petitions therefore fail and they are dismissed;

but there will be no order as to costs.