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Issues: Whether sale consideration received on sale of an import licence could be subjected to trade tax by treating the dealer as a manufacturer under the U.P. Trade Tax Act, 1948.
Analysis: The dispute was governed by the settled view that manufacture requires a process resulting in a new manufactured commodity, and that the definition of manufacture under section 2(e1) of the Act applies to tangible goods and not to intangible goods. Import licences and exim scrips are intangible goods and are incapable of being manufactured. The authority issuing or granting such a licence cannot therefore be treated as its manufacturer. The notification dealing with patents, trade mark, import licence, export permit or licence, issued under the proviso to section 3A(1)(e), fastened liability on the importer or the person in whose name the licence or permit had been issued, and not on any supposed manufacturer of the licence.
Conclusion: The levy of tax on the sale consideration of the import licence by treating the dealer as a manufacturer was not sustainable, and the revision failed.
Ratio Decidendi: Import licences and similar permits are intangible goods and cannot be treated as manufactured goods; consequently, tax liability cannot be fastened on a dealer as manufacturer merely on the sale of such a licence.
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