Mere excavation of gypsum is not manufacture unless it creates a new and different commercial commodity.

Excavation of gypsum from the earth was held not to be a manufacturing process under section 2(k) of the Rajasthan Sales Tax Act, 1954. The Court reasoned that manufacture requires a transformation into a new and different commercial commodity with a distinct name, character or use, and that mere digging out of gypsum did not produce such a change. "Extracting" was distinguished from "excavating," and gypsum remained the same commodity after removal, even if sold in different sizes. The earlier view treating excavation as manufacture was rejected, and the concessional treatment under section 5C was therefore unavailable.

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Issues: Whether excavating gypsum from the earth amounts to a manufacturing process within the meaning of section 2(k) of the Rajasthan Sales Tax Act, 1954, so as to entitle the assessee to the concessional treatment claimed under section 5C of that Act.

Analysis: The definition of "manufacture" in section 2(k) of the Rajasthan Sales Tax Act, 1954 was treated as covering processes of producing, collecting, extracting, preparing or making goods, but the decisive inquiry was whether excavation of gypsum brought into existence a new and different commercial article. The Court held that "extracting" and "excavating" are not synonymous. Excavation means taking out something from the earth, whereas extraction connotes taking out a constituent from something of which it formed a part. Gypsum dug out from the earth remained the same commercial commodity after removal, even if sold in pieces of different sizes. No transformation occurred and no new article with a different name, character or use emerged. The earlier view that mere excavation made gypsum a manufactured product was therefore erroneous.

Conclusion: Excavation of gypsum from the earth is not a manufacturing process under section 2(k) of the Rajasthan Sales Tax Act, 1954, and the assessee is not entitled to the concession claimed under section 5C.

Final Conclusion: The reference was answered against the assessee, the revision was allowed, and the orders treating excavation of gypsum as manufacture were set aside.

Ratio Decidendi: Mere excavation or removal of a mineral from the earth does not amount to manufacture unless the process brings into existence a new and different commercial commodity with a distinct identity, name, character or use.

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