Explosives used in coal mining are raw material where extraction is included in manufacture under sales tax law

Explosives and related goods used in underground coal mining were held to fall within "raw material" under the M.P. General Sales Tax Act because the statutory definition covers goods consumed in manufacture, including fuel and lubricants. The definition of "manufacture" was treated as wide enough to include extraction and collection, so coal mining qualified as a manufacturing process for this purpose. Since the explosives were consumed in extracting coal, they could not be reclassified as incidental goods. The amendment deleting them from the registration certificate was therefore unjustified, and the specified raw materials had to remain included.

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Issues: Whether explosives and related goods used in underground coal mining fall within the expression "raw material" under section 2(1) of the M.P. General Sales Tax Act and could not be shifted to the category of incidental goods under section 2(h) of that Act.

Analysis: The definition of "raw material" under section 2(1) covers not only articles used as ingredients in manufactured goods but also articles consumed in the process of manufacture, and expressly includes fuel and lubricants. The definition of "manufacture" in section 2(j) is wide enough to include extraction and collection. Mining of coal is, therefore, a process of extraction falling within the statutory concept of manufacture. Since explosives are consumed in the extraction of coal from underground mines, they are used in the process of manufacture within the meaning of section 2(1). Goods that satisfy the definition of raw material cannot be treated as incidental goods.

Conclusion: The deletion of explosives and related mining goods from the category of raw materials was unjustified. The issue is decided in favour of the assessee.

Final Conclusion: The impugned amendment to the registration certificate could not be sustained, and the petitioner's specified raw materials were required to remain included in the registration certificate.

Ratio Decidendi: Goods consumed in a statutory process of extraction are raw material where the definition of manufacture includes extraction, and such goods cannot be reclassified as incidental goods.

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