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TMI Blog2019 (12) TMI 427X X X X Extracts X X X X X X X X Extracts X X X X ..... It has been averred that the revisionist being registered dealer is engaged in the business of timber and manufacture and sale of veneer (chiran). The business premises of the revisionist was surveyed on 22.12.1999 on the basis of which the best judgement assessment was made. On the purchase of timber log tax was levied as purchase tax and after manufacture of veneer (chiran) from it, tax was levied on its sale amounting double taxation, which is not permissible under the law. The said imposition of tax has been confirmed up to the stage of Tribunal by the impugned order. 5. Heard Sri N.C. Mishra, learned counsel for the revisionist and learned Standing Counsel and perused the records. 6. The counsel for the revisionist submits that as per the provisions and notification either the items in which the revisionist is dealing can be taxed at the point of import or manufacturing. In other words only one set of tax can be charged. Tax can be levied either at the time of its import in the State or in the hand of its manufacturer. 7. The counsel for the revisionist further submitted that in the present case revisionist accepts the levy of tax on the purchase of timber log even on the b ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of whatever species including ballies and bamboos, whether growing or cut or sawn imported from out side india. Importer 20% (ii) Woods and timber of all kinds and of all trees of whatever species whether growing or cut or sawn not included above but excluding their products and firewoods. Sales by Forest Department the UP Forest Corporation or by private owner of forest or by importer or manufacturer. Provided that where the sale is by the forest department to the UP Forest Corporation the tax shall be levied on the point of sale by the said corporation and not at the point of sale by Forest Department. 16% By the aforesaid notifications rate of tax has been enhanced from 15 % to 20 % and there was no change in levy of tax on timber. 11. The counsel for the revisionist submitted that neither tax can be levied twice i.e. one as purchase tax and the other on its sale nor the rate of tax can be enhanced to 16% instead of 15 %. More precisely 1 % enhanced tax cannot be levied on the sale of veneer (chiran). 12. The counsel for the revisionist has relied upon the certain judgements of Supreme Court, this Court as well as other High Courts i.e. Deputy Commissioner of Sales Tax ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... manufacture of another. The generally prevalent test is whether the article produced is regarded in the trade, by those who deal in it, as distinct in identity from the commodity involved in its manufacture. Commonly, manufacture is the end result of one or more processes through which the original commodity is made to pass. The nature and extent of processing may vary from one case to another, and indeed there may be several stages of processing and perhaps a different kind of processing at each stage. With each process suffered, the original commodity experiences a change. But it is only when the change, or a series of changes, take the commodity to the point where commercially it can no longer be regarded as the original commodity but instead is recognised as a new and distinct article that a manufacture can be said to take place. Where there is no essential difference in identity between the original commodity and the processed article it is not possible to say that one commodity has been consumed in the manufacture of another. Although it has undergone a degree of processing, it must be regarded as still retaining its original identity. 6. A large number of cases has been ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... distinction in the mind of the consumer arises not from any difference in the essential identity of the two, but is derived from the mere form in which the fruit is desired. ... 14. In the result, we hold that when pineapple fruit is processed into pineapple slices for the purpose of being sold in sealed cans there is no consumption of the original pineapple fruit for the purpose of manufacture. 18. Apex Court has very clearly said that even after pineapple have been slices and canned does not changes its identity. 19. This Court in Commissioner of Sales Tax, UP Lucknow Vs. M/s Packing Aids, Agra reported in 1980 UPTC, 901 has held here in below: "7. Now coming to the other question the Assessing Officer observed that the claim made by the assessee that batton and shooks fell in the category of timber was incorrect because it was only making planks or joining planks by nails and that was treated by the assessee as shooks and the same could not be treated as timber. The Revising Authority has, however, observed that batton and bhooks appear to be nothing but wooden planks or pieces used for making wooden cases or Pattis and hence the case of the assessee was correct that wha ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... in question the Assessing Authority held that planks made by the assessee is a timber product. The said finding has been set aside by the First Appellate Authority which has been confirmed by the Tribunal. This Court in the case of C.S.T Vs. M/s Packing AIDS, Agra 1980 UPTC 901 has held that the wooden planks and pieces used for making wooden goods fall within the category of timber. Respectfully following the aforesaid decision, I do not find any legal error in the order of the Tribunal. The revision is dismissed." 22. Similar view has been taken by Madras High Court in the case of State of Tamil Nadu Vs. C. Kanchanamala (1994) 93 STC 87 in which it has held as follows:- 3. The finding of the Tribunal is as follows : "..... It is found that the appellant had effected purchase of timber, sliced the same into splints and sold the splints to various dealers among the match manufacturers. Hence, we are of the view that provisions of section 7A cannot be applied to the purchase turnover of timber and accordingly we set aside the assessment of the purchaser turnover ......" ... 8. From a perusal of the ratios laid down in all these cases, there is no difficulty in upholdin ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s prospectively under Section 5 treating them as general goods. One thing which is conspicuous is that even in the subsequent stand the Government has taken, they do not say that the planks, rafters, etc., do not come within the meaning of timber used in item 63. What they say is that "planks, rafters and cut sizes, etc., obtained from nascent timber have to be treated as falling under general goods". 38. What must follow is that planks, rafters, cut sizes, etc., obtained from logs of wood according to the popular or commercial usage or the interpretation placed by the administration is "timber" within the meaning of item 63 of Schedule I to the Act. 45. Applying these principles thus decided to the facts of the present cases, we have no hesitation in reaching the conclusion that merely because planks, rafters and cut sizes, etc., are sawn or cut from logs of wood, they do not alter their character. They still continue to be raw materials which by themselves and in the same form cannot be directly put to use for construction purposes. The log of wood purchased by the timber merchant is merely cut or sawn to sizes for convenience sake and to make them acceptable to the custome ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e definition of Section 2(e1) of UP Trade Tax Act and has tried to convince the Court that in view of the definition, the manufacturing and cutting of wood into sizes amounts to new commercial commodity comes into existence. 31. The provision of section 2(e-1) of the Act is quoted below:- "2(e1): 'Manufacture' means producing, making, mining, collecting, 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;" 32. Section 2 (e-1) of the UP Trade Tax Act shows that the process of cutting is not being included within the definition of manufacturing. Thus the process of cutting the wood from different sizes and converting the wood log into plank, no new commercial commodity comes into existence. Timber remain timber and after cutting the timber it does not loose its original identity of timber and it does not undergo any physical/commercial or any kind of change. The identity of timber remains same. Thus the process of cutting and converting timber for log does not come under the definition of manufacturing as provided under Section 2 (e-1) of the ..... X X X X Extracts X X X X X X X X Extracts X X X X
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