Mere sifting and grading of coal ash is not manufacture unless it creates a commercially distinct product.

Sifting, sorting, or segregating coal ash and burnt coal into different sizes does not amount to manufacture unless the process produces a commercially distinct commodity or changes the essential identity of the goods. Although the statutory definition of manufacture is wide, it still requires producing, making, altering, or processing goods into a new commercial result. On the facts stated, the activity was limited to collection and grading, with no conversion into a new product. The result is that mere sifting or segregation is insufficient for treatment as a manufacturer under the U.P. Sales Tax Act.

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Issues: Whether sifting coal ash and small pieces of burnt coal of different sizes for sale amounts to manufacture within section 2(e-1) of the U.P. Sales Tax Act.

Analysis: The definition of manufacture in section 2(e-1) is wide, but it still requires producing, making, altering, or otherwise processing goods so that a commercially different result emerges. The activity found on the record was only the collection, sifting, and segregation of ash and coal particles of different sizes. No material showed that the assessee converted the goods into a new commercial commodity. The essential character of the goods remained the same, and mere sifting or grading did not amount to manufacture.

Conclusion: The activity did not constitute manufacture within section 2(e-1) of the U.P. Sales Tax Act, and the assessee was not liable to be treated as a manufacturer.

Final Conclusion: The revision failed and the finding that the assessee was not a manufacturer was sustained.

Ratio Decidendi: Goods are not manufactured unless the process results in a commercially distinct product or changes the essential identity of the commodity; mere sifting, sorting, or grading does not amount to manufacture.

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