Manufacture under entry tax law requires a new commodity; mere LPG repacking is not manufacture, and advance demand needs assessment.

Refilling LPG from bulk containers into small cylinders was held not to be manufacture because it caused no transformation into a new and distinct marketable commodity; it was only a change of receptacle or repacking, outside the notified meaning of manufacture, so entry tax liability did not arise on that basis. The Court also held that advance recovery of entry tax could not be demanded before assessment unless the statute expressly permitted that limited mode of recovery; as the case did not fall within the exception, the advance demand lacked legal basis. The notice was quashed, leaving the authorities free to complete a lawful assessment and recover any tax found due.

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Issues: (i) Whether refilling LPG from bulk containers into small cylinders amounts to manufacture so as to attract entry tax liability; (ii) whether advance payment of entry tax can be demanded without assessment.

Issue (i): Whether refilling LPG from bulk containers into small cylinders amounts to manufacture so as to attract entry tax liability.

Analysis: The expression "manufacture" under the entry tax regime was to be understood by reference to the definition in the commercial tax law. That definition was wide, but it still required a process resulting in a transformation into a new and distinct marketable commodity. Refilling LPG did not change its chemical or physical properties, did not produce a new commodity, and involved only a change of receptacle. The process was in substance repacking, which was also outside the notified meaning of manufacture.

Conclusion: Refilling LPG from bulk containers into small cylinders is not manufacture and does not, by that character alone, attract the impugned entry tax liability.

Issue (ii): Whether advance payment of entry tax can be demanded without assessment.

Analysis: The statutory scheme did not authorise demand of tax in advance of assessment except in the limited class of cases covered by the relevant provision for such advance recovery. As the case did not fall within that exception, the demand raised without completing assessment was without legal basis.

Conclusion: Advance demand of entry tax without assessment was not sustainable.

Final Conclusion: The notice demanding advance payment of entry tax was quashed, while the authorities were left free to make a lawful assessment and recover any tax found due thereafter.

Ratio Decidendi: A process that merely changes the receptacle of a commodity, without producing a new and distinct marketable product, is not manufacture; tax cannot be demanded in advance of assessment unless the statute expressly permits it.

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