Tea blending as manufacturing process supports eligibility under the sales tax exemption notification despite later instructions.

Blending tea may qualify as a manufacturing process for purposes of the eligibility certificate under the 23 October 1981 sales tax notification, so small-scale tea-blending units can fall within the exemption scheme. The note also states that later executive instructions and subsequent notifications did not clearly exclude such units, because the 16 October 1986 notification applied only to dealers commencing commercial production on or after 1 August 1986, and the 3 July 1987 notification did not take tea-blending units outside the regime. On that basis, eligibility certificates remained available, with consequential sales tax relief to be pursued before the competent authorities.

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Issues: (i) Whether a unit engaged in blending tea was carrying on a manufacturing process so as to qualify for an eligibility certificate under the notification dated 23rd October, 1981 issued under section 12 of the M.P. General Sales Tax Act, 1958; (ii) Whether the subsequent executive instructions and later notifications excluded such tea-blending units from eligibility.

Issue (i): Whether a unit engaged in blending tea was carrying on a manufacturing process so as to qualify for an eligibility certificate under the notification dated 23rd October, 1981 issued under section 12 of the M.P. General Sales Tax Act, 1958.

Analysis: The petitioners were registered as small-scale industrial units and had applied for eligibility certificates to claim exemption from sales tax. The decisive question was whether blending tea amounted to a manufacturing process within the scope of the exemption notification. The Court treated the matter as governed by the earlier Division Bench view that blending tea is a manufacturing process and that such units fall within the benefit of the notification, subject to issuance of eligibility certificates by the Industries Department.

Conclusion: The issue was answered in favour of the petitioners, and tea-blending units were held entitled to eligibility certificates under the notification dated 23rd October, 1981.

Issue (ii): Whether the subsequent executive instructions and later notifications excluded such tea-blending units from eligibility.

Analysis: The executive instructions approved by the Government did not specifically deny eligibility certificates to small-scale industrial units engaged in blending tea. The notification dated 16th October, 1986 applied only to dealers who commenced commercial production on or after 1st August, 1986, whereas the petitioners had commenced production earlier. The notification dated 3rd July, 1987 also did not take tea-blending units outside the exemption regime. Accordingly, no later instrument was found to disable the petitioners from seeking the certificate.

Conclusion: The issue was answered in favour of the petitioners, and the later instructions and notifications were held not to bar eligibility.

Final Conclusion: The writ petitions were allowed and the respondents were directed to issue eligibility certificates to the petitioners in accordance with the notification dated 23rd October, 1981, leaving the petitioners free to seek consequential sales tax relief before the appropriate authorities.

Ratio Decidendi: A tea-blending unit can fall within the expression manufacturing process for purposes of the exemption notification, and later executive instructions or notifications will not defeat that entitlement unless they clearly and specifically exclude such units.

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