Manufacture for tax remission depends on real change in goods and strict compliance with separate records and stock registers.

Remission under section 41 of the West Bengal Sales Tax Act, 1994 required manufacture in a newly set up industrial unit and strict compliance with the prescribed record-keeping rules. The finishing activity relied on by the applicant did not change the name, character or use of the goods, and the evidence showed that ingots were converted into bars outside the unit; the rolled bars were therefore not manufactured in the applicant's own unit, so the remission claim failed. Because the unit did not satisfy the manufacturing condition, separate accounts, sale documents and stock registers were required, and the failure to maintain or produce them amounted to violation of rule 151(2)(a), (b) and (d).

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Issues: (i) Whether rolled bars were manufactured by the applicant-company in its newly set up industrial unit so as to qualify for remission of tax under section 41 of the West Bengal Sales Tax Act, 1994. (ii) Whether the applicant-company violated rule 151(2)(a), rule 151(2)(b) and rule 151(2)(d) of the West Bengal Sales Tax Rules, 1995 by maintaining common accounts, common sale documents and not producing the required separate stock registers.

Issue (i): Whether rolled bars were manufactured by the applicant-company in its newly set up industrial unit so as to qualify for remission of tax under section 41 of the West Bengal Sales Tax Act, 1994.

Analysis: Remission under section 41 is available only to a dealer manufacturing goods in a newly set up industrial unit and is subject to the prescribed conditions. The definition of manufacture in section 2(17) required a real change in the goods, and the finishing activity asserted by the applicant did not bring about any change in name, character or use. The evidence showed that ingots were sent to outside units for conversion into bars and that the alleged finishing work in the applicant's own unit did not amount to manufacture of rolled bars there.

Conclusion: The rolled bars were not manufactured by the applicant-company in its own unit, and the claim to remission on that basis failed.

Issue (ii): Whether the applicant-company violated rule 151(2)(a), rule 151(2)(b) and rule 151(2)(d) of the West Bengal Sales Tax Rules, 1995 by maintaining common accounts, common sale documents and not producing the required separate stock registers.

Analysis: Once rolled bars were found not to have been manufactured in the applicant's unit, the company was required to maintain separate accounts, separate serially numbered sale documents and separate stock registers for the goods manufactured in its unit. The claimed reliance on rule 52A of the Central Excise Rules, 1944 did not override the sales tax requirements, because the two enactments operate in different fields and there was no real conflict requiring exemption from rule 151. The record also did not establish production of the separate stock registers required by rule 151(2)(d).

Conclusion: The applicant-company violated rule 151(2)(a), rule 151(2)(b) and rule 151(2)(d).

Final Conclusion: The rejection of renewal of the eligibility certificate was sustained because the applicant failed to satisfy the statutory conditions for remission under section 41.

Ratio Decidendi: Remission-linked eligibility under the sales tax regime depends on strict compliance with the prescribed manufacturing and record-keeping conditions, and activities that do not alter the commercial identity of the goods do not amount to manufacture for that purpose.

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