Manufacture under sales tax law includes processing that creates a commercially distinct, saleable commodity from raw material.

For sales tax purposes under the Bihar Sales Tax Act, 1947, the reference was treated as valid because it was signed by the Commissioner of Sales Tax, and the State's name at the top of the petition was regarded as surplusage. The process of mining, splitting, grading and sorting crude mica was treated as manufacture, because it brought into existence a commercially distinct and saleable commodity even though the raw material retained its basic identity. The amended definition and proviso to section 2(g) were read to support taxation where the commodity was produced in Bihar, so the assessee's challenge to assessment failed.

---

---

Issues: (i) Whether the reference made under section 25(1) of the Bihar Sales Tax Act, 1947 was incompetent because the application bore the name of the State of Bihar though it was signed by the Commissioner of Sales Tax; (ii) Whether the process of mining and splitting mica amounted to production or manufacture of goods within section 2(g) of the Bihar Sales Tax Act, 1947 as amended.

Issue (i): Whether the reference made under section 25(1) of the Bihar Sales Tax Act, 1947 was incompetent because the application bore the name of the State of Bihar though it was signed by the Commissioner of Sales Tax.

Analysis: The statutory requirement was treated as satisfied because the application was in fact signed by the Commissioner of Sales Tax himself. The appearance of the State of Bihar as petitioner at the top of the petition was regarded as surplusage. The earlier decision relied upon was distinguished on facts, since there the application before the High Court under section 25(2) was not signed by the Commissioner.

Conclusion: The reference was legally competent and the preliminary objection failed.

Issue (ii): Whether the process of mining and splitting mica amounted to production or manufacture of goods within section 2(g) of the Bihar Sales Tax Act, 1947 as amended.

Analysis: The expression "manufacture" was construed in the context of the Act as meaning the bringing into existence of something commercially different from the raw material and capable of being sold or supplied in business. It was not necessary that the original substance should lose its identity or essential properties. Applying that test, the processing of crude mica into split mica, graded and sorted into commercial sizes and forms, was treated as a manufacturing process. The amended proviso to section 2(g) was also read as providing the territorial nexus needed for taxation where the commodity was produced in Bihar.

Conclusion: Mining and processing mica into split mica constituted manufacture within section 2(g), and the assessee was rightly taxed for the relevant quarters.

Final Conclusion: The reference was answered in favour of the taxing authority, and the assessee's challenge to the assessment failed.

Ratio Decidendi: For sales tax purposes, "manufacture" includes any process that brings into existence a commercially distinct and saleable commodity, even if the raw material retains its basic identity.

---