TMI Blog1980 (6) TMI 22X X X X Extracts X X X X X X X X Extracts X X X X ..... ITO had levied tax at 65% on the basis that the assessee was not an industrial company within the meaning of the relevant Finance Acts. The assessee preferred appeals before the AAC. The AAC held that the assessee-company operated a cold storage plant which was used for conservation of perishable goods deposited by the customers. Such activity, according to the AAC, fell within the meaning of processing of goods. The AAC also sought support for his conclusion from the reference to s.80J(1) and s. 80J(4) of the I.T. Act, 1961. For the aforesaid reasons, the AAC directed the ITO to treat the assessee-company as an industrial company engaged in the processing of goods and charge income-tax at the rate of 55%. Being aggrieved by the orders of the AAC, the revenue preferred appeals before the Tribunal. The Tribunal was unable to accept the point made by the AAC that support could be had from the language used in s. 80J of the I.T. Act, 1961, in construing the provisions of the Finance Acts concerned. According to the Tribunal, it was not proper, when the relevant Finance Act contains its own definition, to seek support from other Acts even though the Legislature had not tried to def ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... processing or mining. Therefore, it is apparent that the Legislature was not treating the manufacture of goods as the same as processing of goods. This difference must be kept in mind. We are also not concerned in this reference with the construction of the expression " manufacture ". It is well settled by several decisions that manufacture implies a transformation or an alteration of goods. In this light, it will be relevant to consider the meaning of cold storage. The expression " cold storage " has been defined in Webster's Third New International Dictionary (unabridged volume 1966) at page 443 as follows: "Storage especially of food in a place kept cold often by refrigeration for preservation purposes. " The cold storage, as is normally understood, is a process of mechanical refrigeration of absorbing undesirable heat from one substance and transferring this heat to the atmosphere through a cooling medium. This transfer of heat is possible and practical in a mechanical refrigeration system, because commercial refrigerants are capable of absorbing heat and holding it out to gases at very low pressure and temperatures and of giving up this heat as the gases condense to liquids ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e meaning of processing is given as "processing (in relation to fish) includes preserving or preparing fish or producing any substance or article from fish by any method for human or animal consumption ". Similarly, in Encyclopaedia Britannica, Vol. 9, pp. 543 and 545, various preservation processes for food have been described as follows: "There are several major processes for food preservation. The growth of micro-organisms(and enzyme activity) in foods may be retarded by cooling or almost entirely prevented by freezing. Since water is necessary for the growth of micro-organisms dried (dehydrated) foods will be kept for long periods. Or the enzymes and micro-organisms present in foods may be completely or almost completely destroyed by the application of heat as a thermal processing (canning). The only method by which fresh foods may be preserved for a considerable period in the raw state is by subjecting them to as low a temperature as possible without causing damage by freezing. Storage at temperature above freezing, in the neighbourhood of 35degree F/2 degree C is known as cold storage. Storage at such temperature makes possible the holding in good condition of many fresh ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... action or succession of actions leading to the accomplishment of some result, but it was not one of the requisites that the activity should involve some operation on some material in order to its conversion to some other stuff. Therefore, by converting camphor powder into camphor cubes, the petitioner processed camphor powder into camphor cubes and fell within the definition of " dealer " in the West Bengal Sales Tax Act, 1954. In a decision of this court in the case of Khuda Bux v. Manager, Caledonian Press, AIR 1954 Cal 484, the Division Bench of this court was concerned with the expression used in the Factories Act, 1934. There, at page 487, Chief justice Chakravartti observed that handling was processing and dealt with the dictionary meaning of the expression " processing". In the case of Addl. CIT v. Chillies Export House Ltd. [1978] 115 ITR 73, the Madras High Court was concerned with a different question. There, the assessee, an exporter of chillies, purchased the chillies, sorted them, graded them as per Agmark specification, clipped and stemmed them, subjected them to fumigation under expert technical hands in order to prevent deterioration and with a view to give better ..... X X X X Extracts X X X X X X X X Extracts X X X X
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