TMI Blog1985 (10) TMI 78X X X X Extracts X X X X X X X X Extracts X X X X ..... from shepherds and petty traders at upcountry centres. What the assessee purchased was mixed clipped glazed raw wool in heaps. That wool consisted of various colours, fibres and different staple lengths. The assessee sorted out this wool in different qualities, colours and staple lengths. The assessee then had the wool hand-washed to eliminate dirt, grease and other vegetable matter. Thereafter, the wool was dried in the sun on open ground and then it was opened by opener so that lots were blended uniformly to get average export type quality. These activities or processes were carried out by the assessee. The assessee then exported the wool after cleaning and packing it. Before the Income-tax Officer concerned, it was claimed by the assessee that the assessee was an " industrial company " within the meaning of the said expression in section 2(6)(c) of the Finance (No. 2) Act of 1971 (referred to hereinafter as "the said Finance Act "). The Income-tax Officer, after noting the activities carried out by the assessee in respect of raw wool purchased by it came to the conclusion that these activities did not constitute a processing activity. The Income-tax Officer took the view that th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tation than the term IN manufacture " and that for an activity to be considered processing, it was not necessary that the activity must result in the production of a new commercial commodity or a new commodity as such. It was submitted by her that the Legislature had used both the expressions " manufacture " and " processing " in the said clause and this indicated that the two terms should not be given an identical connotation. The very reason for using the expression " processing " was to make it clear that even an activity which did not result in the production of a new commercial commodity could be regarded as covered within that expression. It was submitted by her, in the alternative, that in any event the finding of the Income-tax Officer which is also reflected in the decision of the Tribunal shows that what the assessee purchased was raw wool and what emerged after the activity carried out by the assessee in respect of the said raw wool was uniformly blended goods of export quality which must be regarded as a different commercial commodity. In support of her main submission, Miss Patel relied on the decision of a Division Bench of the Calcutta High Court in CIT v. Radha Na ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... for example, by sorting and repacking fruits and vegetables, it would amount to processing of the commodity. Hence, the aforesaid kind of activity would amount to de processing " within the meaning of section 2(7)(c) of the Finance Act (No. 2) of 1977. The Karnataka High Court relied on the decision of the Supreme Court in Chowgule Co. Pvt. Ltd. v. Union of India [1981] 47 STC 124, to which we shall presently refer. It was held by the Karnataka High Court that the activity carried on by the assessee, of receiving vouchers and statements of accounts from its customers and converting them into balance-sheets, stock accounts, sales analysis, etc., and printing them according to the requirements of its clients amounted to processing and the assessee was, therefore, entitled to be considered as an industrial company entitled to the concessional rate of tax. In Chowgule Co. Pvt. Ltd. v. Union of India [1981] 47 STC 124, the Supreme Court was called upon to consider the meaning of the word "processing " in section 8(3)(b) of the Central Sales Tax Act, 1956, and rule 13 of the Central Sales Tax (Registration and Turnover) Rules, 1957. The Supreme Court pointed out that the said expre ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ompany " within the meaning of section 2(7)(c) of the Finance Act, 1978. In CIT v. Lakhtar Cotton Press Co. (Pvt.) Ltd. [1983] 142 ITR 503, Division Bench of the Gujarat High Court pointed out that the expression de manufacture or processing of goods " has not been defined by the Finance Act, 1973, or the Finance Act, 1974. The Division Bench pointed out that, according to the dictionary, the term " manufacture " means a process which results in an alteration or change in the goods, which are subjected to a process leading to the production of a commercially new article. The activity contemplated by the word " process " is general, requiring only continuous and regular action or succession of actions leading to the accomplishment of some result but it is not one of the requisites that the activity should involve some operation on some material in order to its conversion into some other stuff. Therefore, what is necessary in order to characterise an operation as processing is that the commodity must, as a result of the operation, experience some change. The aforesaid decision cited by Miss Patel completely supports her main submission. In the present case, the facts show that th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tax primarily on the sale of goods and subsidiarily on the purchase of goods. It was, in that setting, that it was said that in order that an activity could amount to manufacture, it must result in a different commercial commodity. It is dangerous to interpret an expression employed in one statute by considering the meaning given to it in a different statute. In view of what is pointed out by the Division Bench in the case of Commissioner of Saks Tax v. Dunken Coffee Manufacturing Co. [1975] 35 STC 493, it is clear that the ratio of the decision in that case can have no application or bearing in considering the connotation of the term " processing " used in section 2(6)(c) of the said Finance Act. As for the aforesaid two decisions of the Calcutta High Court and the decision of the Karnataka High Court and the decision of the Gujarat High Court relied on by Miss Patel, all that Mr. Jetly had to say was that they had not applied the correct test which was enunciated in the case of Commissioner of Saks Tax v. Dunken Coffee Manufacturing Co. [1975] 35 STC 493 by this court. In our view, this submission is not well founded for the simple reason that the decision in the case of Dunken C ..... 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