Manufacture by stone-breaking process confirmed where quarried boulders are turned into marketable stone metal and taxable sales follow.

Applying skill and labour to break quarried boulders into graded stone metal produces a commercially distinct, marketable commodity and therefore amounts to manufacture under the Act. Manual execution does not prevent the process from being treated as manufacture when it transforms stone into a different article fit for sale. Once the resulting product is goods made by a manufacturing process, the related transactions fall within the statutory description of taxable sales. The court accordingly answered both referred questions in the affirmative and sustained tax liability on the assessee's activities.

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Issues: (i) Whether quarrying and breaking boulders into stone metal amounts to manufacture within the meaning of the Act. (ii) Whether the transactions in question are taxable sales within the meaning of the Act.

Issue (i): Whether quarrying and breaking boulders into stone metal amounts to manufacture within the meaning of the Act.

Analysis: The process was examined as one of shaping a previously quarried mass of stone into smaller graded stones fit for sale as gitti or metal. Quarrying by itself was distinguished from the later process of breaking and sizing the stones. The decisive feature was that labour and skill were applied to produce a commercially different and marketable commodity, and the fact that the operation was manual did not exclude it from the concept of manufacture.

Conclusion: The process of breaking stones into metal is manufacture within the meaning of the Act.

Issue (ii): Whether the transactions in question are taxable sales within the meaning of the Act.

Analysis: Once the article produced was held to be goods made by a manufacturing process, the transactions were within the statutory description of sales. No reason was found to depart from the earlier finding that the dealings constituted sales for the purposes of the Act.

Conclusion: The transactions are taxable sales within the meaning of the Act.

Final Conclusion: Both referred questions were answered in the affirmative, thereby sustaining tax liability under the Act on the assessee's activities.

Ratio Decidendi: A process that applies skill and labour to convert quarried stone into a graded, marketable commodity is manufacture when it produces a commercially distinct article fit for sale.

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