TMI Blog1990 (7) TMI 135X X X X Extracts X X X X X X X X Extracts X X X X ..... "the Act"). 3. The petition was filed claiming grant of eligibility certificate for sales tax exemption because by the impugned communication dated July 11, 1988 (Annexure F), the General Manager, District Industries Centre, Jabalpur (respondent No. 1) refused to grant eligibility certificate applied for by the petitioner, on the ground that conversion of stones into "gittis" cannot be termed as a manufacturing process. The Division Bench of this Court in the case of G.R. Kulkarni held that making of metal for the purpose of ballast and road is a process of manufacture in which a new commercial article of different size and price comes into existence. According to the above Division Bench the process of preparation of "gitti" from boulders or stones is a process of manufacture within the definition of that term in the Act. The reference to the Full Bench was occasioned because the Division Bench of this Court in the case of Bheraghat Mineral Industries raised doubt on the correctness of the decision of the Division Bench in the case of G.R. Kulkarni in view of the subsequent decision of the Supreme Court in the case of State of Orissa v. Titaghur Paper Mills Co. Ltd. - [1985] 60 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... o crushers to make "gittis", ballast or metal of different specified shapes and sizes. The commodity processed or prepared does not remain stone, but a new commercial commodity, befitting for use in construction of roads or houses, is made out. Such a process squarely falls within the definition of "manufacture" in the Act. In the decision of G.R. Kulkarni in paragraph 5, the manufacturing process is explained and commented as under to hold that it is covered by the definition of "manufacture" under the Act. "5. Now it cannot be denied that the metal which the assessee produces is 'goods' within the meaning of the Indian Sale of Goods Act or the Constitution. Once we reach the conclusion that what he produces is 'goods' and that some process of manufacture enters into it, in our opinion, the definition in Section 2(i) is fully met. In State of Madhya Pradesh v. Wasudeo -1955 (6) S.T.C. 30 (Nag.), there is a reference to the fashioning of timber into logs for the purposes of sale, and Bhutt, J., who decided the case, held that it is a manufacturing process. It is contended that on a parity of reasoning the chopping of wood into fuel would be manufacturing process. Perhaps, that is ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... dolomite are not different commercial commodities than dolomite lumps. It is not the respondent's case in their return that anything more is a required to be done, except crushing the lumps to get chips and powder from the lumps and that the composition of the end-product is different from lumps. The lumps are broken into chips and powder for convenience in use but they retain the same characteristics and qualities of dolomite lumps. Except for change in shape, there is absolutely no transformation into composition to bring about a new commercial commodity." 10. From the ratio of the decision in the case of Bheraghat Mineral Industries it is clear that the matter whether a particular process is manufacturing process within the meaning of the Act or not is dependent upon the nature of the process involved in each case and no general principle can evolved. One of the tests laid down by the Supreme Court in Deputy Commissioner of Sales Tax v. Pio Food Packers -1980 (46) S.T.C. 63 = 1980 (6) E.L.T. 343 (S.C.), by relying on the decision of the American Supreme Court stated to be the following: "Manufacture implies a change, but every change is not manufacture, and yet every change ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ection 8(1) of the Madhya Pradesh General Sales Tax Act, 1958. The court observed 'with all due respect, we think that the so-called advance from the original form did not alter the basic character as timber and, therefore, purchase tax could not be levied under Section 8(1) of Act'." It may be mentioned that the view taken in State of M.P. v. Wasudeo - 1955 (6) S.T.C. 30 (Nag.) is contrary to the subsequent decision of the Supreme Court in State of Orissa v. Titaghur Paper Mills - 1985 (60) S.T.C. 213. Relying on the decision of the Supreme Court in Deputy Commissioner of Sales Tax v. Pio Food Packers - 1980 (46) S.T.C. 63 = 1980 (6) E.L.T. 343 (S.C.), a Division Bench of Karnataka High Court in Reliable Rocks Builders and Suppliers v. State of Karnataka - 1982 (49) S.T.C. 110, has held that the process of breaking boulders into jelly cannot be described as a manufacturing process. A Division Bench of the Kerala High Court in Deputy Commissioner of Sales Tax v. Sulaiman -1986 (61) S.T.C. 331, has held that bone-meal manufactured for sale as fertilizer in market has a separate commercial identity distinct from those raw-bones purchased, even though the process of manufacture invo ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... according to Division Bench was contrary to the decision of the Supreme Court in the case of Titaghur Paper Mills -1985 (60) S.T.C. 213. As we have explained above, the Division Bench in the case of G.R. Kulkarni -1957 (8) S.T.C. 294 (M.P.), has not placed any reliance on the decision of the single Bench in the case of Wasudeo -1955 (6) S.T.C. 30 (Nag.) and in any case to decision of the Supreme Court in the case of Titaghur Paper Mills -1985 (60) S.T.C. 213, being distinguishable on facts, the correctness of the Division Bench decision in the case of G.R. Kulkarni -1957 (8) S.T.C. 294 (M.P.), cannot be doubted. 15. In view of the discussion aforesaid and relying on the decision in the case of G.R. Kulkarni -1957 (8) S.T.C. 294 (M.P.), the petition succeeds and is hereby allowed. The impugned order dated July 11,1988 (Annexure F) passed by the General Manager, District Industries Centre, Jabalpur, is hereby quashed. The respondents are directed to consider the application for grant of eligibility certificate to the petitioner treating his small-scale industry as being involved in the process of manufacture of "gittis" from stones, within the definition of Section 2(j) of the Act. ..... X X X X Extracts X X X X X X X X Extracts X X X X
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