BALIA, J. - (1.) THESE three writ petitions are filed by the Commissioner Taxes Officer challenging the order passed by the Rajasthan Taxation Board, Ajmer dated 23. 2. 96 in respect of a common judgment delivered in three appeals arising out of three separate assessments for different periods against the same dealer M/s. Spectrum Colour Lab Pvt. Ltd.
(2.) THE actual nature of work done by the respondent-dealer, about which, there is no dispute is that they develop the films brought by the customers, make positive prints thereof and supply the positive prints and return the negative films back to the customers and they also undertake the work of enlarging the photo prints of different sizes. The case of the Revenue is that during the course of survey by the Commissioner Taxes Officer on 12. 7. 86, it was found that dealer has used chemicals and photo- graphic papers costing Rs. 48,89,613. 89/- in the course of his business during 1. 4. 86 to 31. 3. 89 and has received through job-work a sum of Rs. 83,15,927. 55/- which included transfer of property in goods in the aforesaid chemicals and photographic papers to its customers which were involved in execution of work for them. On these premises, after taking recourse to Section 12 of the Rajasthan Sales Tax Act, 1954 reassessments was made for the aforesaid period and, tax was assessed on Rs. 5,94,912. 40/- additional surcharge on which was computed at Rs. 51,922. 96/- and considering the evasion of tax on transfer of property goods costing Rs. 48,49,613/- penalty under Section 16 (1) (i) was also imposed. Further interest under Section 11-B was also levied. On the aforesaid premise regular assessments for 1. 4. 89 to 30. 3. 90 and for 1. 4. 90 to 30. 3. 91 were also made under Section 10 (3), raising demand on account of tax, surcharge, interest and levied penalty under Section 7-AA. Appeals against all the three orders before the Dy. Commissioner (Appeals) were unsuccessful. Hence, three appeals were preferred before the Rajasthan Tax Board by the dealer. The Board partly accepted the appeals of the assessee. It upheld the tax liability on the value of paper. We were of the view that transfer of property in paper took place in execution of work contract to therefor whom the said development of reel was made and positive prints were made available to the assessee and on the cost of paper involved in enlargement of negatives. However, it accepted the case of assessee in respect of cost of chemicals, which were merely consumed in processing of the films and property in which did not pass to the consumer in any form.
(3.) AGAINST the order of Rajasthan Taxation Board deciding the three appeals by a common judgment dated 23. 2. 96 the three revision petitions No. 48, 49 & 51/1996 were preferred by the dealer before the Rajasthan Taxation Tribunal, who by its order dated 25. 04. 97 accepted the contention of the assessee that the work undertaken by the petitioner for developing the negatives and taking out the prints from negatives on receipt of job charges and delivering it, to the customer, was not a `works contract' but merely a service contract, therefore, no tax was exigible on such transaction of service contract. The Tribunal, while relying on the decision of Supreme Court in A. C. T. O. vs. B. C. Kame (1), Everest Copiers vs. State of Tamil Nadu (2), Hindustan Aeronautics Ltd. vs. State of Karnataka (3) and Builders' Assn. of India vs. Union of India (4) and the decision of the West Bengal Taxation Tribunal rendered in Studio Kamalalaya vs. CTO (5), agreed with the aforesaid contention and allowed the appeal of the assessee and set aside the demands which were raised by considering the cost of photo papers as taxable turn-over by treating it to be a case of transfer of property in goods involved in the execution of work contract. Heard learned counsel for the parties. It has been contended by the learned counsel for the Revenue that there may be three types of cases in which supply of prints may come as a final end of the activity in existence. One is the case, in which a person himself takes photograph, develops the negative, and supplies positive prints in desired sizes to the customer. Second case may be developing the films brought by the customer's and to make positive prints and supply the same alongwith the negative films to the customers. Yet, third type of cases may be in which the developed film is given to the dealer either for taking of enlarge prints or the required prints of already developed negatives. ;