Processing of goods includes manual preparation of panpattis or vidas, but the activity is not manufacture.

Preparing panpattis or vidas by manual operations on betel leaves and other ingredients constitutes processing of goods because the materials undergo successive treatments to produce a commercially distinct, saleable article. The absence of mechanical force does not prevent the activity from being processing. However, the activity does not amount to manufacture. Accordingly, the making of panpattis or vidas falls within section 5(1)(b)(ii) of the Bombay Sales Tax Act, 1953 as processing of goods, but not as manufacture.

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Issues: Whether the making of panpattis or vidas amounts to processing of goods, and whether such activity constitutes manufacture, for the purpose of section 5(1)(b)(ii) of the Bombay Sales Tax Act, 1953.

Analysis: The activity of preparing pan or vida was held to involve more than mere mixing of ingredients. Betel leaves and other materials were subjected to a series of manual operations and treatment so as to produce a saleable article in a different form from its components. The final product was treated as a commercially distinct article, and the absence of mechanical force did not prevent the activity from amounting to processing. The process was, however, not treated as manufacture.

Conclusion: The making of panpattis or vidas is processing of goods and falls within section 5(1)(b)(ii) of the Bombay Sales Tax Act, 1953, but it is not manufacture of goods.

Ratio Decidendi: Where ingredients are subjected, even by manual operations, to a series of treatments that produce a commercially distinct saleable article, the activity constitutes processing of goods, notwithstanding that it does not amount to manufacture.

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