Fertiliser mixing was not manufacture for the earlier period; statutory expansion applied only from the later notification.

Mixing fertilisers in different proportions and selling the granulated mixture did not amount to manufacture under the unamended section 2(17) of the Bombay Sales Tax Act, 1959, because combining fertilisers alone did not bring the process within the statutory definition. The 1994 amendment permitted specification of processes altering the nature, character or utility of goods by notification, and the 2000 notification treated mixed fertiliser preparation as manufacture only from that date. The Court held that this enlarged definition could not be applied retrospectively to earlier periods, so the activity was not manufacture during the relevant years and the issue was answered for the assessee.

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Issues: Whether the activity of mixing fertilisers in different proportions and selling the resulting granulated mixture constituted manufacture under section 2(17) of the Bombay Sales Tax Act, 1959 for the relevant period.

Analysis: The definition of manufacture under the unamended provision did not include the process of fertiliser mixture merely because different fertilisers were combined. The amendment to section 2(17) with effect from 1 May 1994 empowered the State Government to specify by notification processes involving alteration in the nature, character or utility of goods. The notification dated 8 December 2000 specifically treated preparation of mixed fertiliser by mixing fertilisers as manufacture only from that date. The Court held that the State could not treat the same process as manufacture for periods prior to the amendment and notification, as that would render the legislative amendment otiose. The reliance placed on the earlier Supreme Court decision did not assist the Revenue because the statutory setting was different and the process in question had not been brought within the definition earlier.

Conclusion: The mixing of fertilisers during the relevant years did not amount to manufacture, and the question was answered in the negative, in favour of the assessee and against the Revenue.

Final Conclusion: The references were answered by holding that fertiliser mixture became taxable as manufacture only from the statutory change and notification, not for the earlier period in dispute.

Ratio Decidendi: A process involving alteration in the nature, character or utility of goods is not manufacture for an earlier period unless it is brought within the statutory definition by the applicable amendment and valid notification, and such enlargement of the definition cannot be given retrospective effect by interpretation.

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