TMI Blog1985 (1) TMI 298X X X X Extracts X X X X X X X X Extracts X X X X ..... g to goods not liable to tax and inter-State sales, the assessing authority determined the taxable turnover of the assessee at Rs. 23,640. It may be mentioned that the assessee had purchased stones of Rs. 23,330.09 and sand of Rs. 1,575 from the unregistered dealers. The sand was utilised for polishing the stones with the help of machines. In the opinion of the assessing authority, the dealer was a manufacturer and after making allowance for the stock of stones worth Rs. 3,420.50 transferred to the account of the head office of the assessee, levied tax at 1 per cent under section 5C of the Act on the purchase of stones of Rs. 19,910 and sand of Rs. 1,575. The tax was thus levied on the dealer for the years of the assessment in question. The assessee filed an appeal and the Deputy Commissioner (Appeals), Commercial Taxes, Udaipur, by his order dated 13th April, 1970, reduced the taxable turnover by Rs. 3,420.50. He also set aside the tax on purchase of sand of Rs. 1,575. He further maintained the levy of tax at 1 per cent on purchase of stones worth Rs. 19,910 on the ground that polishing of stones was included in the definition of "manufacture" given in section 2(k) of the Act. A r ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s follows: "to subject to a process for bringing into a required state: to make, produce to cook and dress:". The word "make" has been defined in the same dictionary as follows: "to fashion, frame, construct, compose, or form: to create: to bring into being: to produce: to conclude..........to convert or turn, etc." "Process" as a noun has been defined as under: "a state of being in progress or being carried on:.....a sequence of operations or changes undergone." Keeping these definitions in view, we have to consider whether for polishing of the stones, process involved is that of manufacture or not. The meaning of the word "manufacture" in connection with the question relating to the applicability of explanation II(ii) to section 2(h) of the U.P. Sales Tax Act, 1948, came up for consideration before their Lordships of the Supreme Court in Commissioner of Sales Tax v. Harbilas Rai Sons [1968] 21 STC 17 (SC). It was observed as under: "In our view, the word 'manufacture' has various shades of meaning, and in the context of sales tax legislation, if the goods to which some labour is applied remain essentially the same commercial article, it cannot be said that the fin ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ough a processing stage. But neither has been 'manufactured' in the normal sense of the word." We are tempted here to refer Anheuser-Busch Brewing Association v. United States 52 L Ed 336, 338 wherein the Court said: "Manufacture implies a change, but every change is not manufacture, and yet every change in an article is the result of treatment, labour and manipulation. But something more is necessary.....There must be transformation; a new and different article must emerge, 'having a distinctive name, character or use'." (underlining* is ours) And it was further stated: "At some point processing and manufacturing will merge. But where the commodity retains a continuing substantial identity through the processing stage we cannot say that it has been 'manufactured'." (emphasis* added) *Here italicised. It may be stated that the comments made therein were applied by their Lordships of the Supreme Court in Deputy Commissioner of Sales Tax's case [1980] 46 STC 63 (SC). Learned counsel appearing for the department, however, relied on G.R. Kulkarni's case [1957] 8 STC 294, Commissioner of Sales Tax v. Hastimal Ratanlal [1972] 30 STC 484 and Commissioner of Sales Tax v. Radha ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d with undyed yarn. On the basis of this reasoning, it was held that it was a process of manufacture within the meaning of section 2(j) of the M.P. Act. Commissioner of Sales Tax's case [1972] 30 STC 484 is hardly of any avail to the learned counsel for the department. In Commissioner of Sales Tax's case [1981] 48 STC 61 the question was whether on a true and proper interpretation of section 41(2) of the Bombay Sales Tax Act, 1959, read with the notifications issued thereunder, the Tribunal was justified in law in coming to the conclusion that a precise quantification of the tax is not possible thereunder and, therefore, that provision was unenforceable. While dealing with the question whether the dyeing and printing would be a process carried out on cloth and would result in a new marketable commodity coming into existence. D.P. Madon, J. (as he then was), with whom Sujata V. Manohar, J., agreed held that dyeing and printing cloth would be manufacture within the meaning of section 2(17) of the Bombay Sales Tax Act. It may be stated that section 2(17) of the Bombay Sales Tax Act defines the term "manufacture" as follows: "'Manufacture', with all its grammatical variations and c ..... X X X X Extracts X X X X X X X X Extracts X X X X
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