TMI Blog1992 (8) TMI 261X X X X Extracts X X X X X X X X Extracts X X X X ..... arat Sales Tax Act, 1969? The assessee, Messrs. Variety Steel Industries, Baroda, deal in steel furniture at Baroda and they are registered as the dealer under the Act. The premises of the dealer were inspected by the Sales Tax Officer on November 9, 1976 and certain documents and other materials were seized. Later on, on the scrutiny of the seized materials the assessment were carried out as regards various transactions of purchase and sales for Samvat years 2031, 2032 and 2033. In the course of the assessment proceedings, the Sales Tax Officer had taken the view that the regular account books maintained by the dealer were not reliable and they were not maintained by the recognised method. The Sales Tax Officer had disregarded the claim of the dealer as a reseller and not as a manufacturer and had estimated the turnover of sales and purchase of the abovesaid three years at the figures higher than claimed by the dealer. The assessing officer had also imposed certain penalties but later on, the matters were carried before the Assistant Commissioner of Sales Tax, who had allowed the appeals partly and had reduced the amounts of turnovers and had also reduced the penalties proportio ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... pplying paint and affixing handles, mirrors and locks and that the abovesaid minor activity or change cannot be regarded as a manufacture. Mr. Joshi has also urged that looking to the facts and circumstances of the case and looking to the abovesaid minor activity being carried out by the dealer, it is a clear cut case of resale. Anyhow, Miss Doshit, learned counsel who appears on behalf of the Revenue, has urged that there is a clear finding of fact recorded by the Tribunal that such skeleton cupboards are never purchased by the customers, but they are being purchased by the steel dealers and they are being sold in the market only after painting and affixing of handles, locks and mirrors and that if one looks to the statutory definitions of resale and manufacture under the relevant provisions of the Act of 1969, it becomes clear that it would be the activity of manufacture. 4.. Before proceeding further to examine the rival contentions of the learned counsel for the assessee and the learned counsel for the Revenue, it requires to be recalled the Tribunal has recorded certain findings of fact which go to the root of the question in controversy. It has been pointed out that the p ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he statutory definitions in respect of two items, viz., "manufacture" within the meaning of section 2(16) and of "resale" within the meaning of section 2(26) of the Act of 1969. Doshit invited our attention to the Bombay High Court's decision in Famous Cine Laboratory and Studio Ltd. v. State of Maharashtra [1975] 36 STC 104 with a view to point out that in such cases the court shall have to look to the statutory definitions provided under the relevant provision of the Act. It appears that the Bombay High Court while deciding the abovesaid case has summed up this contention raised by Miss Doshit in the following words: "The definition of 'manufacture' is very wide and includes several activities which, in ordinary parlance, one would not describe as manufacture. We are not concerned with the ordinary meaning of the word 'manufacture' but with the statutory meaning given to it by clause (17) of the said section 2. Under the said clause processing any goods is expressly stated to be 'manufacture'. Raw film is a commodity which after being processed becomes processed film, a commodity commercially different from raw film and, accordingly, processing raw films must constitute 'manufa ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... results in a manufacture. Now, what amounts to a manufacture has been made clear as noticed by us by the definition of word "manufacture" occurring in section 2(16) of the Act of 1969. Any activity of altering, ornamenting, finishing or otherwise processing the commodity would fall within the meaning of term "manufacture". Therefore if the abovesaid two definitions-one the term of "resale" and the second of term "manufacture"-are read together, it becomes clear that it is extremely difficult to accept the contention raised on behalf of the assessee that there was no manufacture, but only a resale in respect of the commodity, viz., the cupboard. As pointed out by us earlier, the Tribunal has noticed as a finding of fact that the so-called skeleton cupboards were being purchased by the assessee and they were being sold in the market only after painting and fixing of the lock, the handles and the mirrors. It is also pointed out by the Tribunal as a finding of fact that ordinarily, such skeleton cupboards would not be purchased by the customers in the market unless and until the abovesaid activities are being carried on by the dealer. In view of this position, it becomes clear that adm ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ssee, the commodity cannot be termed as a cupboard. In the absence of these activities, the so-called cupboard would be a mere skeleton which would not be sold in the market. Any customer who wants to purchase a cupboard would not buy a skeleton cupboard from the market which is unpainted or is without the handles, the locks and mirrors affixed on the same. Looking to the nature of these addition, alteration and affixing of the materials on the skeleton cupboard, it cannot be accepted that the abovesaid activity being carried out by the assessee can be branded as a minor nominal or insignificant activity which would not attract the definition of term "manufacture" within the meaning of the Act of 1969. 9.. Mr. Joshi has placed heavy reliance on the Supreme Court decision in the case of Deputy Commissioner of Sales Tax v. Pio Food Packers [1980] 46 STC 63 and has urged that even though a degree of processing might be involved in preparing some commodity, if the original commodity and the end commodity continue to possess the same identity, there is no activity of manufacture. The abovesaid case before the Supreme Court was in respect of the processed pineapple slices for the purpo ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... preme Court would also not assist Mr. Joshi in his submission before us because as pointed out by us earlier, two different commodities emerge after the activity as noticed by us. The case on hand cannot be equated with a case of timber simpliciter and the timber sized and dressed. 11.. Mr. Joshi has also placed reliance upon this High Court's decision in State of Gujarat v. Push Colour Chemical Co. [1982] 49 STC 158. In that case, it has been held that the act of addition of gobar salt, etc., to the dyes of diverse quality and concentration purchased from registered dealers by the assessee was not an act of manufacturing and the reselling of such dyes with reduced strength would amount only to resales within the meaning of section 2(26) of the Act of 1969. Mr. Joshi has also placed reliance on one other decision of this Court in State of Gujarat v. Nareshkumar Brothers [1982] 49 STC 264, with a view to point out that when the newsprint reels were cut into smaller reams, this Court had accepted that the said activity would not result in any change of form and therefore, it would be a case of resale and not a manufacture. Two other decisions on the same line in which Mr. Joshi h ..... X X X X Extracts X X X X X X X X Extracts X X X X
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