M/S.RAINBOW COLOUR LAB vs STATE OF M P

The Supreme Court addressed whether the services provided by photographers, including taking photographs and developing films, constitute a works contract under Article 366(2A)(b) of the Constitution and Section 2(n) of the M.P. General Sales Tax Act. The Court upheld the High Court's ruling that the nature of the work is primarily a service contract, emphasizing that the contract is for skill and labor rather than for the sale of goods. Consequently, the Court held that the turnover from such services is not subject to sales tax, reaffirming the precedent set in Assistant Sales Tax Officer & Ors. vs. B.C. Kame (1977).