TMI Blog2007 (7) TMI 618X X X X Extracts X X X X X X X X Extracts X X X X ..... assessee has been manufacturing the goods of turmeric powder by following certain manufacturing processes such as the roots of turmeric are boiled, dried, powdered and coloured. The above manufacturing processes involved in manufacture of turmeric powder, which is one of the spices different and distinct from the roots of turmeric. Therefore, we have to hold that there is a manufacturing process involved in manufacture of turmeric powder from roots of turmeric. This has been rightly certified by the certifying officer but not accepted by the assessing authority, the appellate authority and Karnataka Appellate Tribunal without assigning valid reasons. Therefore, the findings of the assessing authority, the appellate authority and Karnataka Appellate Tribunal are not only erroneous but error in law. Therefore questions of law framed in this petition by the petitioner are also required to be answered in favour of the assessee. - 35 of 2002 - - - Dated:- 17-7-2007 - GOPALA GOWDA V. AND ARALI NAGARAJ, JJ. ORDER:- The order of the court was made by V. GOPALA GOWDA J. The petitioner-assessee questioned the correctness of the judgment dated March 7, 2002 passed in S.T.A. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e Karnataka Appellate Tribunal ) contending that the same is not only erroneous finding but also contrary to law. He has placed strong reliance upon the Government Order dated July 12, 1993 followed by another Government Order dated August 28, 1993 as a measure of follow up to implement the policy of the State Government as contained in Government Order dated July 12, 1993 and further as per the guidelines enumerated in the supplementary Government Order dated August 28, 1993, in the place output manufacture of goods is inconsistent with the earlier Government Order which is the industrial policy of the State Government in extending tax exemptions to the newly established factories including the petitioner-industry. Pursuant to the supplementary notification wherein certain conditions were laid down by the State Government, the certificate was issued by the Department of Industries and Commerce (hereinafter referred to as the DIC ) in favour of the petitioner is not accepted by the assessing authority and the appellate authority which is contrary to the decisions rendered by two Division Bench judgments of this court reported in the case of Brooke Bond Lipton India Limited v. Stat ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ended tea. Therefore, it is contended by the learned counsel that the judgment of the Supreme Court referred to in the Brooke Bond Lipton India Ltd.'s case [1998] 109 STC 265 (Karn) with all force is applicable to the fact-situation of the present case to justify the claim of the assessee that the turmeric powder is a distinct and separate commodity in the commercial parlance. Therefore, the finding recorded by the assessing authority and the appellate authority is not only erroneous but suffers from error in law for the reasons that the turmeric powder is no doubt a spice but they have wrongly held that no manufacturing process is involved in the finding recorded by them. Therefore, it is contended that the said finding is erroneous in law and further in support of the same proposition of law, reliance is placed on another Division Bench judgment of this court, namely, Assistant Commissioner of Commercial Taxes, V Circle, Bangalore v. J.P. Kumar Co. [1998] 109 STC 645 wherein the Division Bench of this court after referring to the case of Rajasthan Roller Flour Mills [1993] 91 STC 408 held that ragi and ragi powder is different and distinct. Further he has placed reliance up ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... bmission that the above decision does not assist the argument of the learned counsel appearing on behalf of the assessee. Further, the learned counsel for the respondent placed strong reliance in support of the Division Bench decision of this court reported in the case of Sri Vinayaka Oil Industries v. State of Karnataka [1993] 91 STC 253 wherein the Division Bench of this court, after interpretation of the phrase manufacture has held that dehusking of tamarind seeds does not amount to manufacture. The said decision is applicable to the facts-situation having regard to the finding of fact recorded by the assessing authority and the appellate authority in their order holding that the powdering of the roots of the turmeric does not involve manufacturing process. Therefore, the said case with all force justify the finding and the reasons recorded on the contentious issues framed by the appellate authority. Therefore, she submits that the questions of law framed by the assessee in the revision petition do not arise for consideration and therefore the same are required to be answered in the negative and against the assessee. With reference to the abovesaid rival and legal conten ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... [1998] 109 STC 265 and Wipro Infotech Ltd.'s case [2000] 117 STC 244, the rejection of the claim of the assessee without accepting the certificate, though the General Manager of D.I.C, Mysore who is competent to certify that the assessee manufactures spice referable to the turmeric powder from turmeric roots. The reliance placed by the learned counsel for the petitioner upon the above two Division Bench judgments of this court are aptly applicable to the facts of the present case. Therefore, we have to answer the finding recorded by the assessing authority, the appellate authority and Karnataka Appellate Tribunal as erroneous in law and non-consideration of the same would vitiate the orders as the same are contrary to the Government order, notification and the certificate issued by the District Industries Centre, Mysore, in favour of the assessee. Therefore, the abovesaid question is answered in favour of the assessee and against the Revenue. Re: Questions B, C, D and E: All these questions are answered together. The findings of fact recorded by the assessing authority and the first appellate authority are contrary to the Government orders dated July 12, 1993 and Augu ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... eat. The said decision has been rightly followed by the Division Bench decision of this court in the case of Assistant Commissioner of Commercial Taxes, V Circle, Bangalore v. J.P. Kumar Co. [1998] 109 STC 645. Further, what is manufacturing activity is elaborately referred to by the Division Bench decision in the case of Brooke Bond Lipton India Ltd.'s case [1998] 109 STC 265 (Karn), in which two Constitutional Bench decisions of the apex court are referred to at paragraphs 47 and 48, namely, Empire Industries case reported in [1987] 64 STC 42 and Ujagar Print's case [1989] 74 STC 401. In the Empire Industries' case [1987] 64 STC 42 the apex court had an occasion to deal with grey fabric after it had undergone various process of bleaching, dyeing, sizing, printing, finishing, etc., emerges as a commercially different commodity with its own price structure. Further, with reference to Ujagar Prints' case [1989] 74 STC 401 (SC) at paragraph 48 in the Brooke Bond Lipton India case [1998] 109 STC 265 (Karn) referred to, the Division Bench of this court held that liberal approach to be adopted and the phrase must be widened in the judicial concept of the word manufact ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... , 1944, the meaning of goods and manufacture has been examined and held that substance produced by the manufacturer at an intermediate stage is not put in the market would not make any difference to the chargeability of the substance to excise duty if, it is covered by an item in the First Schedule to the Act. After holding as stated above the phrase manufacture is explained at paragraph 14 with reference to the Edition of Words and Phrases, Vol. 26 from an American judgment. The relevant passage reads thus: 'Manufacture' implies a change, but every change is not manufacture and yet every change of an article is the result of treatment, labour and manipulation. But something more is necessary and there must be transformation; a new and different article must emerge having a distinctive name, character or use. In the Empire Industries' case [1987] 64 STC 42 the apex court has referred to the decision of the Supreme Court in Deputy Commissioner of Sales Tax (Law), Board of Revenue (Taxes), Ernakulam v. Pio Food Packers reported in [1980] 46 STC 63; AIR 1980 SC 1227 wherein the apex court in that case examined the consumption of commodity in the process of ma ..... X X X X Extracts X X X X X X X X Extracts X X X X
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