TMI Blog1959 (3) TMI 50X X X X Extracts X X X X X X X X Extracts X X X X ..... manufacture. The exemption was claimed by virtue of Notification No. 8728-C.T.-66/49 F dated the 1st July, 1949, of the Government of Orissa in the Finance Department issued in pursuance of section 6 of the Orissa Sales Tax Act, 1947, exempting certain classes of sales from payment of sales tax. The item with which we are concerned in these petitions is item 33 of the said notification which is as follows: "33. Gold ornaments-When sold by the manufacturer who charges separately for the value of gold and the cost of manufacture". At about the same time Government also issued a press note to the following effect: "Government of Orissa Finance Department PRESS NOTE At present mill-made and handloom dhoti or sari costing not more than Rs. 5 a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ments correctly represent the facts, I may sum them up as follows: 1..The petitioners do not have a factory for the manufacture of those ornaments. They used to supply gold to some independent artisans who made it into ornaments with the help of their own tools. In some instances the artisans used to work in their own houses; in others they used to work in the shop of the petitioners where they were given electrical facilities and seating arrangements. The petitioners used to pay labour charges to these artisans for converting gold into ornaments, and then they used to sell the ornaments to consumers showing, in their bills, the value of the gold and the cost of manufacture separately. In some instances gold used to be supplied to the pet ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... arges, would still be a "manufacturer" within the meaning of the said exemption clause. In support of this argument he relied on the following definition of the expression "manufacturer" occurring in the Hosiery Act, 1845 (8 and 9 Vic. C.-77, section IX): " 'Manufacturer' means any person furnishing the materials of work to be wrought into hosiery goods to be sold or disposed of on his own account." According to him the petitioners clearly come within this definition. 4.. The dictionary meaning of the word "manufacture" is "to work up material into forms suitable for use or to make or fabricate from material, to produce by labour, now especially on a large scale". Doubtless, in a statute dealing with sales tax it must, in the context, mea ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... are the manufacturers. They could not obviously claim the benefit of the exemption because they did not sell the goods. But in any view of the case the petitioners cannot claim the benefit of that clause. In support of this view, he relied on some observations of the Madras High Court in Raju Chettiar and Sons v. State of Madras(1). There, a firm of jewellers of Coimbatore used to supply silver in specie to some merchants in Kumbakonam who used to make it into silverware after receiving from that firm charges by way of wages for converting the silver into finished articles. The judgment proceeded on the assumption that, on these facts, the merchants of Kumbakonam were the manufacturers of the goods and it was held that there was no sale be ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ally unknown. Doubtless, an exemption clause in a taxing statute must be construed strictly, but it should not be so construed as. to make the exemption practically illusory. (1) [1955] 6 S.T.C. 131. 7.. On the other hand, the construction put by Mr. Venkatasubramania Ayyar is not an artificial or strained construction. It is true that the definition given in the Hosiery Act was meant for the purpose of that Act only. But the very fact that even a person, who furnishes raw materials to another person to be made into finished products on behalf of the former person, was a manufacturer, shows that such an interpretation is not artificial. The following observations in Corpus Juris Secundum, Vol. LV, p. 637, support this view: "Even though ..... X X X X Extracts X X X X X X X X Extracts X X X X
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