Manufacturing concession under sales tax law remains available even when part of the process is done on job work.

Section 5CC of the Rajasthan Sales Tax Act, 1954 allowed concessional treatment for raw material purchased for manufacture of goods for sale, and it did not require every stage of production to be carried out by the same assessee. The Court held that outsourcing one manufacturing component on job work did not defeat the benefit where the assessee performed the substantial processes and the statute contained no express condition that the entire activity be completed in-house. The department's objection was therefore rejected, and the statutory benefit remained available.

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Issues: Whether the assessee was entitled to the benefit of section 5CC of the Rajasthan Sales Tax Act, 1954 where part of the manufacturing activity, namely weaving, was carried out through job work and the assessee itself carried out the other substantial processes.

Analysis: Section 5CC granted concessional tax on raw material purchased for the manufacture of goods for sale within the specified period and did not stipulate that every stage of the manufacturing process must be performed by the same unit claiming the benefit. The essential requirement was that the raw material be purchased for manufacture of goods for sale. The factual position showed that the assessee performed the major processes and only one component of the work was outsourced on job basis. The Court accepted that industrial specialisation and use of specialised outside units for particular processes did not defeat the statutory benefit, because the provision contained no condition that the entire manufacturing activity must be completed by the assessee alone.

Conclusion: The assessee was entitled to claim the benefit under section 5CC; the department's objection was rejected.

Final Conclusion: The revision failed and the Tribunal's view granting the statutory benefit was left undisturbed.

Ratio Decidendi: Where a taxing provision allows concessional treatment for raw material purchased for manufacture of goods, the benefit cannot be denied merely because part of the manufacturing process is outsourced on job work, unless the statute expressly requires the entire process to be performed by the assessee itself.

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