TMI Blog2010 (5) TMI 762X X X X Extracts X X X X X X X X Extracts X X X X ..... ceedings. The brief facts that will be required to be noticed for the purposes of the present adjudication may be stated at the outset: The petitioner claims to be engaged in the business of manufacture and sale of packaged pure mustard oil in a registered small-scale industrial unit located at Pancharatna Road, Goalpara in the State of Assam. The aforesaid unit of the petitioner which went into commercial production in the year 2003, it is stated, was set up pursuant to the Assam Industries (Sales Tax Concession) Scheme, 1997 which was framed in exercise of powers under section 9(4) of the Assam General Sales Tax Act, 1993 (hereinafter referred to as, the Act ). It is the pleaded case of the petitioner that in the Industrial Policy Resolution announced by the Government of Assam in the year 1997, amongst others, individual industrial units established after April 1, 1997 were promised sales tax exemption on the sale of finished products as well as on the purchase of raw materials. Such exemption was to be granted for a period of seven years from the date of commencement of commercial production. As exemption from sales tax is regulated by the provisions of section 9(4) o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ision that the process of filtration of raw mustard oil and, thereafter, packing the filtered mustard oil in plastic pouches, which was being undertaken in the unit of the petitioner, does not amount to manufacture/processing as there is no physical change of the basic raw material. The committee, therefore, resolved that the raw mustard oil and the mustard oil packed in pouches in the petitioner's unit as finished product from the said raw material, i.e., raw mustard oil, will not be eligible for sales tax exemption. In the said meeting the committee also resolved that the exemption earlier granted on mustard seeds and mustard oil produced by the oil expeller installed in the petitioner's unit from mustard seeds would continue to enjoy the exemption as before. Pursuant to the said decision of the District Level Committee, the eligibility certificate of the petitioner was amended and raw mustard oil which was earlier declared to be eligible for exemption of tax as a raw material stood deleted. It appears that, thereafter, the jurisdictional Superintendent of Taxes by a notice dated July 9, 2004 took note of the aforesaid developments and informed the petitioner that in v ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... gh there is some consequential improvement on the raw material, i.e., raw mustard oil, the end-product, i.e., mustard oil is not substantially different from the raw material/input used. In view of the above conclusion, the learned single judge thought it proper to conclude that the petitioner's unit does not satisfy the requirements spelt out by section 9(4) of the Act and, therefore, the exemption notification, i.e., the Concession Scheme issued under the said provisions of the Act can have no application to the petitioner so as to entitle the petitioner to the benefits therein. Aggrieved, this appeal has been filed. We have heard Dr. A. K. Saraf, learned senior counsel for the appellant and Mr. K. N. Choudhury, learned Additional Advocate-General, Assam appearing for the respondents. Dr. Saraf, learned senior counsel for the appellant/writ petitioner, has submitted that under section 9(4) of the Act exemption is to be granted on purchase of raw materials and also on the sale of the manufactured/ finished goods by an eligible unit. Referring to the Sales Tax Concession Scheme, Dr. Saraf has pointed out that the said Scheme contemplates grant of similar exemption to an e ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ition, Dr. Saraf has submitted that the filtration process undertaken transforms raw mustard oil to pure mustard oil. In this regard, the learned counsel has submitted that the learned single judge has also recorded the finding that raw mustard oil undergoes a process of improvement on account of the filtration. This, according to the learned counsel, would be sufficient to bring the end-product, i.e., pure mustard oil within the four corners of the definition of manufacture in section 2(22) of the Act so as to make the appellant entitled to the benefit of exemption under the Sales Tax Concession Scheme, 1997. On the other hand, Mr. K. N. Choudhury, learned Additional AdvocateGeneral, Assam, has contended that the judgments of the apex court relied upon on behalf of the appellant/writ petitioner have to be understood in the context of the facts of those cases and not as laying down any law of general application. Mr. Choudhury has also submitted that a consideration of the process deployed in the unit of the petitioner would go to show that raw mustard oil only undergoes a process of filtration before the filtered oil is packed in pouches for sale by the petitioner. The end-pr ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... end-product. In the facts before it the apex court held that the process involved amounted to manufacture as the crude oil had undergone some changes, in the course of the processing thereof that was undertaken. Another decision of the apex court in State of Maharashtra v. Mahalaxmi Stores reported in [2003] 129 STC 79; [2003] 1 SCC 70 has also been brought to our notice by the learned Additional Advocate-General wherein the apex court while once again interpreting the word manufacture as contained in section 2(17) of the Bombay Sales Tax Act, took the view that to attract the said definition a new commercial commodity must come into existence. The aforesaid view contained in para 5 of the judgment may be conveniently extracted below (at page 81 of 129 STC): 5. From a perusal of the definition, extracted above, it is clear that the processes of producing, making, extracting, altering, ornamenting, finishing or otherwise processing, treating or adapting of any goods fall within the meaning of the term 'manufacture'. But it may be pointed out that every type of variation of the goods or finishing of goods would not amount to manufacture unless it results in emergen ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... give rise to a new commodity distinguishable from the input used. It may also bring about another article which, though not an entirely different commodity, may have some new features but at the same time retaining some features of the original input. The decisions of the apex court relied upon by the learned counsel for the parties to which a detailed reference has been made earlier indicate that while interpreting the pari materia definition of the word manufacture as contained in the Assam Act, the unanimity of the views seems to be that though no new article need to come into existence to attract the wider definition of manufacture , some changes in the end-product in comparison to the basic input must emerge. The extent of such change may vary from case to case. The decision of the apex court in Ashirwad Ispat Udyog[1999] 112 STC 207; [1998] 8 SCC 85 and Sonebhadra Fuels [2006] 147 STC 594 (SC); [2006] 7 SCC 322, in the ultimate analysis, does not lay down any proposition of law fundamentally different from what has been laid down in Shiv Datt Sons [1992] 84 STC 497 (SC); [1993] Supp. 1 SCC 222 and B.P. Oil Mills [1998] 111 STC 188 (SC); [1998] 6 SCC 577, inasmuch as, the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... on of manufacture contained in section 2(22) of the Act. The end-product mustard oil , is fundamentally the same as the raw material/input used, i.e., raw mustard oil, inasmuch as, it is only the impurities in the raw mustard oil which is removed by a process of filtration. The above discussion will, however, not conclude the matter. Section 9(4) of the Assam Act contemplates grant of relief to any class of industries . . . producing such goods as may be specified therein by way of full or partial exemption of any tax . . . on the raw materials or other input . . . or on the manufactured goods sold. . . A careful scrutiny of the provisions of section 9(4) of the Assam Act would indicate that the said section is in two parts. By the first part the identity of the industries entitled to grant of relief by way of exemption is contemplated and the second part deals with the goods in respect of which the benefit of exemption will be applicable. The first part clearly identifies industries producing goods to be entitled to grant of relief under section 9(4) of the Act whereas the second part states that exemption will be both on raw materials and manufactured goods. The emph ..... X X X X Extracts X X X X X X X X Extracts X X X X
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