Fresh fruits and green vegetables in tins kept exemption because preservation did not create a new commercial commodity.

Tinned fresh fruits and green vegetables remained within the exemption for fresh fruits and green vegetables because tinning did not change their essential commercial identity. The later notification excluding processed and branded goods in sealed containers supported the view that the earlier exemption continued to apply so long as the goods retained their character as fresh fruits and green vegetables. Preservation and tinning under the U.P. Trade Tax Act did not amount to manufacture, as the process merely preserved marketability and did not bring into existence a new commercial commodity. The revisions were allowed and the tribunal's view was set aside.

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Issues: (i) Whether the sales of tinned fresh fruits and green vegetables were liable to tax. (ii) Whether preservation and tinning of fresh fruits and green vegetables amounted to manufacture under the U.P. Trade Tax Act.

Issue (i): Whether the sales of tinned fresh fruits and green vegetables were liable to tax.

Analysis: The entry in Notification No. 7038 dated 31.01.1985 exempted fresh fruits and green vegetables including mushroom. The later Notification No. 595 dated 06.04.1999 excluded processed and branded fresh fruits sold in sealed containers, which supported the view that such goods were covered by the earlier exemption so long as they retained their character as fresh fruits and green vegetables. The goods in question were marketed and purchased as fresh fruits and green vegetables and did not cease to fall within that description merely because they were tinned.

Conclusion: The sales of tinned fresh fruits and green vegetables were not liable to tax under Notification No. 7038 dated 31.01.1985.

Issue (ii): Whether preservation and tinning of fresh fruits and green vegetables amounted to manufacture under the U.P. Trade Tax Act.

Analysis: Manufacture under section 2(e1) of the U.P. Trade Tax Act, 1948 requires a process that results in a change in the nature or character of the goods and brings into existence a new commercial commodity. Preservation and tinning in the present case did not alter the essential identity of the goods. The process merely preserved the fruits and vegetables for sale and made them marketable, without converting them into a different commercial product.

Conclusion: Preservation and tinning of fresh fruits and green vegetables did not amount to manufacture.

Final Conclusion: The Tribunal's view was set aside and the revisions succeeded because the tinned goods retained their identity as exempt fresh fruits and green vegetables and the process employed did not create a new commercial commodity.

Ratio Decidendi: A process does not amount to manufacture unless it results in a new commercial commodity or changes the essential identity or character of the goods; mere preservation, packing, or tinning that leaves the goods commercially the same does not attract tax as manufacture.

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