TMI Blog1986 (2) TMI 304X X X X Extracts X X X X X X X X Extracts X X X X ..... cut by the assessee into smaller paper reels by a slitting process. The process carried out by the assessee, as explained before the Sales Tax Tribunal, was as follows: Machine-made paper is manufactured in reels only. The size of the reels of such paper varies according to the size of the machine on which paper is manufactured. Such size is technically known as deckle width of the machine which varies from 60" to 200". As the paper of the aforesaid deckle width cannot be conveniently handled for the purposes for which the paper is manufactured, these reels are slit into smaller width by the paper mills themselves. These reels were of a maximum width of 33" to suit the slitting machine for the purpose of making smaller reels from the bigger reels. The assessee purchased these bigger reels. The open end of the paper reel was unbound and drawn through the rotary slitters which are adjusted to obtain the requisite size for smaller reels. The rotary slitters cut the paper which in the same process is rewound on the paper tubes which are inserted on the rewinding shaft. The cutting of the paper into smaller size and rewinding thereof on the paper tubes is one continuous process as a r ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e regarded as a different commercial commodity, namely, smaller paper reels into which it was converted. It was, on the other hand, submitted by Mr. Patil, learned counsel for the assessee, that although the activity of the assessee, of slitting larger reels of paper into smaller reels, could be described as a process, since that process did not result in the production of any new commercial commodity, it could not be said that the assessee carried on the activity of manufacture within the meaning of the said expression in section 2(17) of the said Act. 6.. Clause (17) of section 2 of the said Act gives an extensive definition of the term "manufacture" so as to include within its scope even the processing or treating or adapting of any goods. Rule 3 of the Bombay Sales Tax Rules, 1959, sets out the processes which are not included in "manufacture". It would be sufficient to notice that the process of slitting larger reels of paper into smaller reels, such as was carried on by the assessee, has not been excluded from the definition of "manufacture" under this rule. Notwithstanding this, in view of the decision of this Court in Dunken Coffee's case [1975] 35 STC 493, it will have t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r mixed and blended the coffee powder prepared by them with the chicory powder purchased by them and produced the mixture commercially known as French Coffee. It was held by the Division Bench that the French Coffee produced by the assessees was a different commercial commodity from the coffee powder and chicory powder from which it was prepared. If this test is applied to the facts of the case before us, it is not possible to accept Mr. Jetly's contention. What the assessee purchased was larger reels of paper and the activity applied by the assessee to these reels resulted in the production of smaller reels of paper. It is common ground that the paper in the larger reels of paper could be used for packing, so also the paper in the smaller reels prepared by the assessee. The essential characteristic of the paper remains the same in the larger reels and the smaller reels. Moreover, packing is one of the purposes to which paper is commonly put and, therefore, it is one of the normal uses of the paper. There was no material on record to show that in the paper market larger reels of paper are treated as a different commercial commodity from smaller reels. In these circumstances, we fin ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... our attention to the decision of a learned single judge of the Calcutta High Court in Mahabirprasad Birhiwala v. State of West Bengal [1973] 31 STC 628, where it was held that the transformation into powdered form of "whole" black pepper and turmeric purchased from the market on payment of tax did not amount to manufacture but involved an act of processing within the meaning of section 2(b) of the West Bengal Sales Tax Act, 1954, and the sale by a person of such powdered black pepper and turmeric would attract tax under that Act. Suffice it to say that the main question before the court in that case was whether the petitioner before the court was a dealer within the meaning of that term in the aforesaid West Bengal Act. The learned single Judge took the view that powdering black pepper and turmeric was an activity which could be called a process within the meaning of section 2(b) of that Act. We may further point out that this decision has been dissented from in a recent judgment of another learned single Judge of the Calcutta High Court in Rasoi Products v. Commercial Tax Officer [1982] 51 STC 248 where Padma Khastgir, J., took the view that the decision in Mahabirprasad Birhiwala ..... X X X X Extracts X X X X X X X X Extracts X X X X
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