TMI Blog1961 (9) TMI 48X X X X Extracts X X X X X X X X Extracts X X X X ..... n sub-clause (vii) and has also paid tax on the purchase of the raw tobacco used in the manufacture of such goods under clause (viii) he shall be entitled to a rebate to the extent of the tax paid in respect of the raw tobacco so used. In these cases, the question arose before the Sales Tax Appellate Tribunal, whether the tundu tobacco sold by the assessees could be described as chewing tobacco manufactured from raw tobacco. The Tribunal called for a report from the Commercial Tax Officer asking that officer to report upon the details of the actual process employed by the assessee. The relevant part of the report was in these terms: "As regards the process of manufacture which the dealer chooses to term as just cutting into pieces and selling, it is as follows. The tobacco taken out of the warehouses is unbundled and kept in a heap at the place where it is converted into pieces. There it is periodically sprinkled with palm jaggery water to keept it soft and wet. Otherwise, the dealers contend, the tobacco becomes brittle and not useful to cut into pieces. The tobacco so treated with palm jaggery water is taken out little by little and cut into pieces of two sizes one of big size ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Bros. is the petitioner. The turnovers in dispute in these cases are Rs. 50,956, and Rs. 32,924. T.C. Nos. 171 and 172 of 1959 relate to the assessment years 1956-57 and 1957-58 and the respective turnovers in dispute are Rs. 34,516 and Rs. 66,160. In these two cases, Sheik Batcha Saheb is the petitioner. In a decision of this Court, in Bell Mark Tobacco Co. v. Government of Madras[1961] 12 S.T.C. 126., this very question of chewing tobacco arose and it fell to be determined whether the sales tax was leviable under clause (vii) or clause (viii) of section 5 of the Act. Precisely in the same manner as in the present case, in the case dealt with in the above decision, the raw tobacco purchased by the assessees was subjected to soaking in jaggery water, dried in the shade and periodically subjected to the process of bulking. The same process was followed during the time when the tobacco was in the bonded warehouse. After the tobacco was taken out of the warehouse, it was again soaked in jaggery water. Thereafter certain processes were employed which do not obtain in the present case. Flavouring essences were added, leaf was shredded and the shredded tobacco was packed and labelled. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t the raw tobacco into some other product. These processes are invariably employed even in storing raw tobacco to prevent the tobacco from drying up, becoming brittle and powdery, and no longer fit for sale as raw leafy tobacco. This decision is authority for the position that upto the stage of these processes no manufacturing of the raw tobacco into some other product is involved. From the facts set out by the Tribunal, based on the report of the Commercial Tax Officer, it is beyond question that no ingredient of any kind other than jaggery water is added to the tobacco and that this process of sprinkling of jaggery water is employed by all dealers in raw tobacco generally, but more by those who proceed to manufacture the tobacco. But factually, the position is clear that only this process of bulking was employed by the petitioners before us. Learned counsel for the department, while conceding this factual position, nevertheless contends that the cutting up of this tobacco into small pieces and packing them into small packets, costing three or six pies, and the subsequent marketing of the tobacco so packed, constitutes a process of manufacture of the tobacco, thereby bringing it w ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... f a commercial commodity which is capable as such of being sold or supplied." In Pithapuram Taluk Tobacco Cigars and Soda Merchants' Union v. State of Andhra Pradesh[1958] 9S.T.C. 723., the taxability of cheroots, etc., arose. Though the question that was considered in that case was different, what "manufacture" means was considered briefly by the learned Judges. They observed: "Whenever any article is prepared from raw materials by giving them a form different to the raw material or changing the quality, and the property, it cannot be said to remain in the same state................As Webster's Dictionary says, manufacture means the process or operation of making wares or any material products by hand, by machinery or by other agency. The Century Dictionary defines manufacture to mean production of articles for use by giving those materials new forms, qualities, properties, whether by hand labour or by machinery......" We have referred to the above decisions as reliance has been placed upon them by the learned counsel for the department in support of the argument that when tobacco is cut into pieces and packed in a particular manner, the tobacco has undergone a process of manu ..... X X X X Extracts X X X X X X X X Extracts X X X X
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