Manufacture requires a commercially different product; filling bulk L.P.G. into cylinders was treated as resale, not manufacture.

Transferring and filling bulk liquid petroleum gas into smaller cylinders did not amount to manufacture under section 2(16) of the Gujarat Sales Tax Act, 1969, because the process did not create a commercially different commodity. The court applied the test whether the process brought about a vital change in the goods' essential character, and held that L.P.G. remained L.P.G. before and after filling. As the activity merely facilitated delivery, packing and marketing without changing the identity of the product, the transactions were treated as resale and the corresponding deduction was available to the assessee.

---

---

Issues: Whether transferring, collecting and filling liquid petroleum gas from a bulk container into cylinders amounted to manufacture within section 2(16) of the Gujarat Sales Tax Act, 1969, so as to deny the assessee deduction on resale turnover.

Analysis: The relevant test was whether the process brought about a vital in the commodity so that it became something essentially and commercially different from what it was before the process. The filling of bulk L.P.G. into smaller cylinders was only for efficient delivery to customers. The commodity remained L.P.G. before and after the process, and there was no change in its essential or commercial identity. A process which merely facilitates transport, packing or marketing, without changing the character of the goods, does not amount to manufacture.

Conclusion: The process was not manufacture. The assessee was entitled to treat the transactions as resale and to the corresponding deduction. The answer was in the affirmative, in favour of the assessee and against the Revenue.

Ratio Decidendi: A process amounts to manufacture only if it results in a commodity that is essentially and commercially different from the original goods; mere repacking or transfer into smaller containers does not constitute manufacture where the identity of the goods remains unchanged.

---