Manufacture under sales tax law requires a new commercial article; collecting and supplying boulders is not manufacture.

Extraction and collection of boulders did not amount to manufacture under the Madhya Pradesh General Sales Tax Act, 1958, because manufacture in the charging sense requires the emergence of a new and distinct commercial article with a different name, character or use. The Court held that the inclusive wording in the statutory definition, referring to producing, collecting, extracting, preparing or making goods, does not treat every such activity as manufacture. As the assessee merely collected and supplied boulders from hillocks and no new commercial commodity came into existence, liability as a manufacturer did not arise under the sales tax provision.

---

---

Issues: Whether extraction and collection of boulders amounts to manufacture so as to attract liability as a manufacturer under the sales tax provisions.

Analysis: The statutory definition of manufacture in section 2(j) of the Madhya Pradesh General Sales Tax Act, 1958, was considered, but the Court held that the inclusive words relating to producing, collecting, extracting, preparing or making goods do not convert every such process into manufacture in the sense required by the charging provision. The word 'manufacture', used as a verb, requires bringing into existence a new substance or a new and different commercial article having a distinct name, character or use. Since the assessee only collected and supplied boulders from hillocks and no new commercial commodity emerged, the activity did not amount to manufacture. Consequently, liability under section 4(5)(b) did not arise.

Conclusion: The question was answered in the negative, in favour of the assessee.

---