TMI Blog1995 (2) TMI 401X X X X Extracts X X X X X X X X Extracts X X X X ..... izes commercially known as 'gitti' does not amount to manufacture?" 2.. As is evident from the above question, the controversy is whether stone in the form of boulders cease to be stone after undergoing the process of crushing for conversion of the same into stones of smaller sizes known as "gitti". The material facts are as follows: The assessee purchased big size stones known as "boulders" from registered dealers and with the help of crushing machine converted the same into stones of smaller sizes, known as "gitti". He applied to the Commissioner of Sales Tax under section 52(b) of the Bombay Sales Tax Act, 1959 ("Act") for determination of the question whether the process of crushing stones of bigger sizes known as boulders into "gitti ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... her Stone Crusher v. General Manager, District Industries Centre [1990] 79 STC 149 [FB], Rajasthan High Court in C.T.O. v. Bhonri Lal Jain [1994] 94 STC 118, and the Supreme Court in State of Andhra Pradesh v. Modern Proteins Ltd. [1994] 95 STC 181. 4.. We have carefully considered the submissions of the learned counsel. "Manufacture" has been defined in section 2(17) of the Act as follows: " 'Manufacture', with all its grammatical variations and cognate expressions, means producing, making, extracting, altering, ornamenting, finishing or otherwise processing, treating, or adapting any goods; but does not include such manufactures or manufacturing processes as may be prescribed." 5.. Though the above definition is couched in very wide t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... mount to manufacture and render the furniture sold a different item of goods from the furniture purchased. This clearly is not the intention of the Legislature..... This provision should be interpreted in a practical and workable manner. The mere fact that the words used in the definition of 'manufacture' are very wide should not lead us to so widely interpret them as to render the provision practically meaningless and so as to treat the goods sold as different merely because some slight additions or changes are made in the goods which are purchased before they are sold. It is true that under the section it is not necessary that there should be 'manufacture' in the sense that a new commodity has been brought into existence as would have bee ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nents was obscured, but that, in our judgment, is not alteration within the meaning of the Act. The alteration contemplated by the Legislature is some alteration in the nature or character of the goods." And observed: ".....though the words used by the statute, namely, 'processed or altered in any manner after such purchase' were very wide, the court read down the scope of this expression and considered that, for the purposes of the definition, there should be some alteration in the nature or character of the goods." The Supreme Court approved the above approach of this Court and held (at page 504): "In our opinion, the interpretation of section 2(17) calls for a like limitation on the words used by the statute. As we have already poi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... etains its original character and identity is whether the processed commodity is regarded in the trade by those who deal in it as distinct in identity from the original commodity or it is regarded commercially and in the trade, the same as the original commodity. 7.. Applying the above tests, it was held by the Supreme Court: (i) Blending of different qualities of ore possessing differing chemical and physical composition so as to produce ore of contractual specifications cannot be said to involve any process of manufacture, since the ore that is produced cannot be regarded as a commercially new and different commodity from ore of different specifications blended together. It is commercially the same article, namely, ore, though with di ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... eme Court, it is obvious that the process of crushing boulders to obtain stones of smaller sizes termed as "gitti" cannot be regarded as a process of manufacture. The taxable item is "stone". Boulders and "gitti" are different sizes of the same. Breaking of boulders, which are pieces of stones of bigger size, into pieces of relatively smaller size known as "gitti" does not alter the nature and character of stone. They remain stone, which falls under entry 25 of Part II of Schedule C to the Act which, so far as relevant, reads: Serial No. Description of goods Rate of sales tax Rate of purchase tax 1 2 3 4 25. (i) Building materials including lime, sand, stone, rubble, refractory bricks but excluding those specified elsewhere. 8 pai ..... X X X X Extracts X X X X X X X X Extracts X X X X
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