TMI Blog2004 (1) TMI 650X X X X Extracts X X X X X X X X Extracts X X X X ..... meaning of section 2(17) of the Bombay Act?" S.T.R. No. 5 of 2000 and S.T.R. No. 2 of 2000: "Whether on the facts and in the circumstances of the case and in the light of the decision of the Supreme Court in the case of Shaw Wallace Co. Ltd. v. State of Tamil Nadu [1976] 37 STC 522, the Tribunal was justified in law in holding that the activity of mixing various chemical fertilisers in different proportion and selling the said mixture in granulated form does not constitute a manufacturing activity under section 2(17) of the Bombay Sales Tax Act, 1959?" 4.. The facts set out in Sales Tax Reference No. 15 of 2000, relevant for the purpose herein are as follows: M/s. Maharashtra Agro Industries Development Corporation Limited ("the assessee", for short), is a reseller of various types of chemical fertilisers which are required by the agriculturists. The assessee is a registered dealer under the Bombay Sales Tax Act, 1959 ("the BST Act", for short). In addition to reselling of fertilisers, the assessee is also engaged in the activity of mixing two or more fertilisers in different proportions and selling such mixture in granulated form. In view of the controversy raised as ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the rotator is heated so that the mixed fertiliser powder takes a granulated shape. It was submitted that by the above process of manufacture a different type of fertiliser mixture is obtained which is a different commercial commodity. It was submitted that after preparation of such fertiliser mixture the different fertilisers used for mixing cannot be separated again as the mixture is homogeneous. It was submitted that in the commercial market or common parlance, these fertiliser mixtures are known to be different from the fertilisers used for mixing. It was submitted that use of fertiliser mixture cannot be substituted by merely using the ingredients of the mixture separately because use of each fertiliser is for a specific purpose. It was submitted that when a particular fertiliser mixture is recommended for a particular crop, the said mixture cannot be used for other crop. 7.. It was further submitted that the fertiliser mixture prepared along with other ingredients such as clay powder are sold in the market under different names such as Sufala, Koyana, Bhagirath, etc. Accordingly, it was submitted that the process carried on by the assessee is a manufacturing process and t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r provisions contained in section 2(17) of the BST Act, the question referred to this Court be answered in favour of the assessee and against the revenue. 10.. We have heard the counsel on both sides and perused the records pertaining to the issue raised in the reference. In this case, the issue relates to the period 1992-1993 and 1993-1994. Section 2(17) of the BST Act at the relevant time reads as follows: "(17) '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; Explanation I.-For the purposes of this clause, the cutting, sawing, shaping, sizing or hewing of timber, shall be deemed to be manufacture; Explanation II.-For the purpose of this clause, refining of oil shall be deemed to be manufacture; " By Maharashtra Act 29 of 1994, section 2(17) of the BST Act was amended with effect from May 1, 1994 and the amended section reads as follows: "(17) 'Manufacture', with all its grammatical variations and cognate expressions, includes, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... exercise of that power, the process of fertiliser mixture is specifically declared to be manufacturing process with effect from December 8, 2000, it is not open to the State to contend that even before the amendment to section 2(17) of the BST Act in 1994, the process of fertiliser mixture was included in the definition of "manufacture". 12. Since a process which involves alteration in the nature, character or utility of goods was not included in the definition of "manufacture", it became necessary for the Legislature to amend the definition of "manufacture", by Maharashtra Act 29 of 1994. Under the said amendment Act, the State was required to issue a notification in the Official Gazette, specifically stating therein that a particular process which involves alteration in the nature, character or utility of goods is a manufacturing activity within the meaning of section 2(17) of the BST Act. In exercise of that power, the State by notification dated December 8, 2000 has declared that the fertiliser mixture involves alteration in the nature, character and utility of goods as contemplated under the amended section 2(17) of the BST Act and, therefore, fertiliser mixer will be a man ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... inues to be fertiliser which is the only entry set out in the Schedule to the BST Act. Under the circumstances, the Tribunal was justified in holding that the decision of the apex Court in the case of Shaw Wallace [1976] 37 STC 522 was not applicable to the case of the assessee. Reliance was placed on the decision of this Court in the case of Dunken Coffee Manufacturing Co. [1975] 35 STC 493 (Bom) wherein it was held that the mixing and blending of coffee powder with chicory powder resulting in "French coffee" is a distinct article or commodity covered under section 2(17) of the BST Act. That decision does not support the case of the State because, the process involved in fertiliser mixture came to be included in the definition of "manufacture" with effect from May 1, 1994 and the State has specifically declared that the process of fertiliser mixture shall be deemed to be manufacturing process with effect from December 8, 2000 under the amended section 2(17) of the BST Act. 14. For all the aforesaid reasons, we hold that the process of fertiliser mixture carried on by the assessee during the relevant years, i.e., 1992 to 1994 which are subject-matter of the present references did ..... X X X X Extracts X X X X X X X X Extracts X X X X
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