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2009 DIGILAW 242 (PNJ)

CALCUTTA ENGINEERING CORPORATION v. PUNJAB STATE.

2009-01-29

H.S.BHALLA, M.M.KUMAR

body2009
JUDGMENT M. M. KUMAR, J. - The Sales Tax Tribunal, Punjab, while accepting the application of a dealer under section 22(1) of the Punjab General Sales Tax Act, 1948 has referred the following questions of law for the opinion of this court : "Whether, in the facts and circumstances of the case, the graphic art films are covered by item No. 6 of Schedule A of the Punjab General Sales Tax Act, 1948." Brief facts of the case are as under. The dealer is engaged in the business of resale of graphic art films, etc. He was assessed for the year 1982-83 and the item graphic film was treated as a photographic film as defined in entry 6 of the Schedule A of the Punjab General Sales Tax Act, 1948 (for short, "the Act"). Accordingly, tax at the rate of 10 per cent was levied and additional demand of Rs. 20,359 was created by the Assessing Authority vide its order dated August 11, 1986. The appeal filed before the Deputy Excise and Taxation Commissioner (Appeals) did not succeed which resulted in filing of another appeal by the dealer before the Tribunal. The dealer insisted that photographic art film is not an item covered under Schedule A of the Act and in fact is an item of general category exigible to tax at general rate instead of special higher rate applicable to Schedule A items. After hearing the arguments, the Tribunal concluded that the graphic art films were liable to tax at 10 per cent as per entry 6 of Schedule A of the Act. The Tribunal rejected the argument that graphic art film was used as a printing material for printing newspaper, books, etc. The film is much slower and its thickness is more than the photographic films because these films are not used by the photographers and are different from the photographic films. The further argument was also rejected that the photo process is different from photographic process. The film is much slower and its thickness is more than the photographic films because these films are not used by the photographers and are different from the photographic films. The further argument was also rejected that the photo process is different from photographic process. In order to appreciate the controversy, it would be necessary to notice entry 6 of Schedule A of the Act, which is as under : "Entry No. 6 - Photographic and other cameras and enlargers, lenses, films and plates, papers and cloth and other parts and accessories required for use therewith." A perusal of entry 6 of Schedule A makes it pertinent that it uses expression "photographic and other cameras and enlargers". There is indication available that photographic film and graphic film are basically different items not merely from the point of view of its usage but also from other point of view. Before the Tribunal, the assessee has placed reliance on the Focal Encyclopedia of Photography, Volume II published by the Focal Press, London and New York, 1974 Edition. Quoting from page 1181 of the book, the argument has been raised as under : "The printing block used in photo mechanical reproduction process is made from the negative which is exposed in process cameras. The process camera is a permanent piece of equipment which is bolted down to the floor of the room or carried on runners which are bolted to the floor. The camera consists essentially of two vertical frames mounted on a set of horizontal rails. One frame carries the lens panel and the other the plate holder and the process screen. The photo process camera is a sort of copier used mainly for the purpose of printing. When the camera is not covered under the photographic then its film too cannot be covered in entry No. 6 of Schedule A. The West Bengal Taxation Tribunal has held this view in the case of Commissioner, Commercial Taxes, West Bengal v. Monotype Corporation Ltd. [1991] 82 STC 292." It is thus evident that the graphic art films are those films on which positives and negatives are produced. Therefore, it is not possible to conclude by any stretch of imagination that graphic art films would be covered by the expression photographic and other cameras and enlargers, lenses, films and plates. Therefore, it is not possible to conclude by any stretch of imagination that graphic art films would be covered by the expression photographic and other cameras and enlargers, lenses, films and plates. So according to entry No. 6 one item is covered by the expression "photographic and other cameras and enlargers" then after use of another item lenses/films and plates/papers and clothes have been used. The graphic art films might fall within the mischief of entry No. 6, had it been graphic and films and plates or papers and cloth. Therefore, it is not possible to conclude that the graphic art films would be covered by entry No. 6. Accordingly, the answer to the question posed has to be against the Revenue and in favour of the assessee.