1990 (12) TMI 83

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..... e Act'). For the assessment year 1975-76 the respondent Filed a return on taxable turnover of Rs. 39,376.32 as against the turnover of Rs. 58,130/- excluding a sum of Rs. 72,787.87, the value of coconut husks purchased by the assessee and converted into the coconut fibre. The respondent claimed that there is no manufacturing process involved in making Fibre from coconut husk and, therefore, the purchase value is not exigible to tax under the Act. This was negatived by the Sales Tax Officer who assessed the purchased turnover on coconut husk at 4 per cent under S. 5A of the Act, which was confirmed by the appellate authority. On revision, the Sales Tax Appellate Tribunal by Order dated July 26,1983 relying upon the decision of the Kerala .....

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..... art. The production of articles for use from raw or prepared materials by giving such materials new forms, qualities, properties or combinations, whether by hand labour or machine". Thus by process of manufacture something is produced and brought into the existence which is different from that, out of which it is made in the sense that the things produced is by itself a commercial commodity capable of being sold or supplied. The material from which the thing or product is manufactured may necessarily lose its identity or may become transformed into the basic or essential properties. The Constitution Bench of this Court in Ujagar Prints v. Union of India [1989 (38) E.L.T. 535 (S.C.) = (1989) 3 SCC 488] held thus :- "The prevalent and gener .....

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..... stuff or the material or the original article must lose its character or entity or it should become transformed in basic and essential properties. In Commissioner of Sales Tax v. Harbilas Rai & Sons [1968 (21) S.T.C. 17 (S.C.)] this Court held at page 20 that the word 'manufacture' has various shades of meaning, and in the context of sales tax legislation, if the goods to which some labour is applied remain essentially the same commercial article, it cannot be said that the final product is the result of manufacture. The test laid down by this Court is that the article which comes into being must be a commercially different from the one from which it is made or manufactured. 5. Therefore, the article that emerged, as a result of t .....

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