TMI Blog1964 (10) TMI 2X X X X Extracts X X X X X X X X Extracts X X X X ..... st, in our judgment, is satisfied by the expression "electricals." This would of course not include electrical equipment not directly connected with the process of manufacture. Office equipment such as fans, coolers, air-conditioning units, would not be admissible to special rates under Section 8(1). Set aside the order passed by the High Court and direct that the order passed by the Sales Tax Officer be modified by de - 857 of 1964, Civil Misc. W.P. No. 2367 of 1962 - - - Dated:- 28-10-1964 - K. Subba Rao, J.C. Shah and S.M. Sikri, JJ. Sri Narain Andley and Rameshwar Nath of M/s. Rajinder Narain Co., for the appellant. O.P. Rana, for the respondents. [Judgment per : J.C. Shah, J.]. - Messrs. J.K. Cotton Spinning and Weaving Mills Company Ltd. is a public limited Company having its registered office at Kanpur. The Company manufactures for sale cotton textiles, tiles and other commodities. The Company applied on June 21, 1957, requesting the Sales Tax Officer, Sector II, Kanpur to register it as a dealer under Section 7 (1) of the Central Sales Tax Act, 1956, and prayed that the following goods which it ordinarily purchased in the course of inter-State trade ma ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ate of registration after due enquiry as required by the statute, the Sales Tax Officer acted without jurisdiction in seeking to make the amendments. The High Court negatived the contention of the Company that the Sales Tax Officer had no jurisdiction to revise the certificate of registration issued after due enquiry, and rejected the petition holding that drawing instruments, photographic materials, colours, chemicals, electricals, machinery and building materials such as cement, lime are not comprehended in the expression "in the manufacture or processing of goods for sale" within the meaning of Section 8(3)(b) read with Rule 13. Against the order dismissing the petition, the Company has appealed to this Court. 4.Counsel for the Company has very properly not sought to raise the contention that the Sales Tax Officer had no jurisdiction to modify the certificate of registration, merely because the certificate as originally granted was issued after due enquiry. Under Section 7(4) of the Act a certificate of registration granted under Section 7(1) may be cancelled by the authority granting it, inter alia, for any sufficient reason. If on account of some error, the certificate speci ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tion (1) - (a) in the case of declared goods are goods of the class or classes specified in the certificate of registration of the registered dealer purchasing the goods as being intended for re-sale by him; (b) in the case of goods other than declared goods are goods of the class or classes specified in the certificate of registration of registered dealer purchasing the goods as being intended for re-sale by him or subject to any rules made by the Central Government in this behalf for use by him in the manufacture or processing of goods for sale or in mining or in the generation or distribution of electricity or any other form of powers;" Section 13 conferred power upon the Central Government, to make rules on several matters including enumeration of goods or class of goods used in the manufacture or processing of goods for sale or in mining or in the generation or distribution of electricity or any other form of power. In exercise of this power, Rule 18 was framed by the Central Government, which as amended read at the material time, as follows : "The goods referred to in clause (b) of sub-section (8) of Section 8 which a registered dealer may purchase, shall be goods int ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ficient ground for specification; the intention must be to use the goods as raw materials, as processing materials, as machinery, as plant, as equipment, as tools, as stores, as spare parts, as accessories, as fuel or as lubricants. A bare survey of the diverse uses to which the goods may be intended to be put in the manufacture or processing of goods, clearly shows that the restricted interpretation placed by the High Court is not warranted. The expression "in the manufacture of goods" should normally encompass the entire process carried on by the dealer of converting raw materials into finished goods. Where any particular process is so integrally connected with the ultimate production of goods that but for that process, manufacture or processing of goods would be commercially inexpedient, goods required in that process would, in our judgment, fall within the expression "in the manufacture of goods." For instance, in the case of a cotton textile manufacturing concern, raw cotton undergoes various processes before cloth is finally turned out. Cotton is cleaned, carded, spun into yarn, then cloth is woven, put on rolls, dyed, calendered and pressed. All these processes would be rega ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... It the process of designing is so intimately connected with the process of manufacture of cloth, we see no reason to regard the process of designing as not being a part of the process of manufacture within the meaning of Rule 13 read with Section 8(3)(b). The process of designing may be distinct from the actual process of turning out finished goods. But there is no warrant for limiting the meaning of the expression "in the manufacture of goods" to the process of production of goods only. The expression "in the manufacture" takes in within its compass, all processes which are directly related to the actual production. Goods intended as equipment for use in the manufacture of goods for sale are expressly made admissible for specification. Drawing and photographic materials falling within the description of goods intended for use as "equipment" in the process of designing which is directly related to the actual production of goods and without which commercial production would be inexpedient must be regarded as goods intended for use "in the manufacture of goods." 11.Building materials including lime and cement not required in the manufacture of tiles for sale cannot, however, be re ..... X X X X Extracts X X X X X X X X Extracts X X X X
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