Manufacture through hired milling treated as taxable manufacture; linseed oil also fell within the edible oil exemption.

Conversion of oil-seeds into oil through another person's mill on labour charges was treated as manufacture for sales tax purposes, because a person need not perform the physical crushing himself or use his own machinery or premises. Where the work is done to the assessee's order under a contract other than purchase, the mill owner acts only as a hireling or agent, and the assessee is treated as the manufacturer. Linseed oil was also treated as edible oil within the exemption notification dated 8 June 1948 under the U.P. Sales Tax Act, following an earlier construction accepted by the Court.

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Issues: (i) Whether the assessee, who got oil-seeds crushed through another person's mill on payment of labour charges, was a manufacturer of linseed oil and liable to tax as such on its sales; (ii) whether linseed oil was an edible oil within the meaning of the exemption notification dated 8 June 1948 issued under the U.P. Sales Tax Act.

Issue (i): Whether the assessee, who got oil-seeds crushed through another person's mill on payment of labour charges, was a manufacturer of linseed oil and liable to tax as such on its sales.

Analysis: Conversion of oil-seeds into oil is manufacture. A person is not required to perform the physical act himself or to use his own machinery or premises. Where the crushing is done by another person to the assessee's order and under a contract other than a purchase, the act is treated as the assessee's own act. The mill owner merely performed work as an agent or hireling for labour charges and was not carrying on the business of selling oil.

Conclusion: The assessee was a manufacturer of linseed oil and was liable to be taxed as such.

Issue (ii): Whether linseed oil was an edible oil within the meaning of the exemption notification dated 8 June 1948 issued under the U.P. Sales Tax Act.

Analysis: The question was covered by an earlier decision of the same Court, and that construction was accepted as governing the notification.

Conclusion: Linseed oil was held to be an edible oil within the meaning of the notification.

Final Conclusion: Both reference questions were answered against the assessee, and the reference was disposed of with costs directed to be borne by the parties themselves.

Ratio Decidendi: A person who gets goods manufactured by another to his order under a contract other than purchase is treated in law as the manufacturer for tax purposes, even if the work is done through another's mill or labour.

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