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2015 (1) TMI 132 - HC - VAT and Sales TaxProcess amounts to manufacture or not - Whether transformation of noncommercial underground raw water into packaged drinking water amounted to "manufacture" as defined u/s 2(30) of the Assam Value Added Tax Act, 2003 and u/s 2(22) of the Assam General Sales Tax Act, 1993 or not – Held that:- Following the decision in Ujagar Prints v. Union of India [1989 (1) TMI 122 - SUPREME Court] -while the principle for determining whether a process amounts to "manufacturing" or not, is well-known, namely, when a distinct and new article emerges as a result of the process, it can be held that manufacturing is involved, there are border line cases where either conclusion can be reached - only such processes amount to manufacture as have impact on identity, nature and character of goods and not every process which may bring about some change in quality. The prevalent and generally accepted test to ascertain that there is 'manufacture' is whether the change or the series of changes brought about by the application of processes take the commodity to the point where, commercially, it can no longer be regarded as the original commodity but is, instead, recognised as a distinct and new article that has emerged as a result of the processes - The principles are clear - But difficulties arise in their application in individual cases - There might be borderline cases where either conclusion with equal justification be reached - Insistence on any sharp or intrinsic distinction between 'processing' and 'manufacture'- though the raw water is subjected to the process of purification, it continues to be water - Its character and use remains the same though quality has been improved - It cannot be held that a new and distinct commercial commodity has emerged on account of the process undertaken - every process which may bring about some change cannot be treated to be manufacturing - The identity of the original commodity must be lost and instead a new identity must merge – thus, there is no ground to interfere in the order - Decided against petitioner.
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