Packing twine used for sale of manufactured goods qualifies as a consumable store integral to manufacturing activity.

Packing twine used to secure manufactured goods for sale was treated as a consumable store under section 13(1)(B) because manufacture includes not only the direct conversion process but also activities integrally connected with making the business commercially workable. The absence of an express reference to packing materials did not justify a narrow reading of the provision, and section 21 on packing materials, as well as exemption notifications, were held irrelevant to construing the positive language of section 13(1)(B). On the facts, the twine was necessarily used in marketing the goods and formed part of the manufacturing activity, so the assessee was entitled to purchase it on the prescribed certificate.

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Issues: Whether kathi (twine) used for packing manufactured goods for sale was a consumable store required in the manufacture of taxable goods for sale under section 13(1)(B) of the Gujarat Sales Tax Act, 1969.

Analysis: The expression used in section 13(1)(B) was construed in the light of the settled principle that manufacture includes not only the direct process of converting raw material into finished goods, but also any process or activity so integrally connected with the ultimate manufacture that, without it, the business of manufacture would be commercially inexpedient. The earlier and corresponding statutory provisions were considered, but the omission of an express reference to packing materials did not justify a restrictive construction excluding all packing-related articles. Section 21 dealing with packing materials and the exemption notifications relied on by the revenue were held to be irrelevant to the interpretation of the positive language of section 13(1)(B). On the facts, the twine was part of the consumable stores necessarily used for marketing the goods and was integrally connected with the manufacturing activity.

Conclusion: Kathi (twine) used for packing the manufactured goods was a consumable store required in the manufacture of taxable goods for sale, and the assessee was entitled to purchase it on the prescribed certificate under section 13(1)(B). The reference was answered against the revenue.

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