Drying and bundling tendu leaves is not manufacture where the commodity's essential character remains unchanged.

Drying, collecting and bundling tendu leaves do not amount to manufacture under the M.P. General Sales Tax Act, 1958, because manufacture requires a process that brings about a change in substance and results in a new article with a distinct character and use. The leaves remain tendu leaves as a commercial commodity after drying and packing, so the essential nature of the goods is unchanged. Later rules and notifications were treated as clarificatory and consistent with that position, and the assessee was therefore not treated as a manufacturer on that basis.

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Issues: Whether the drying of tendu leaves and packing them in bundles amounts to a manufacturing process under the M.P. General Sales Tax Act, 1958.

Analysis: The statutory definition of "manufacture" is wide, but it requires a process that brings about a change in substance so that a new article with a distinctive character and use emerges. Mere plucking, drying, collecting, or bundling of tendu leaves does not alter their essential nature; they remain tendu leaves as a commercial commodity. The later rule and notifications were treated as clarificatory and consistent with that understanding.

Conclusion: The drying and bundling of tendu leaves does not involve manufacture, and the assessee is not a manufacturer on that basis. The reference was answered against the Commissioner.

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