Statutory water treatment is not manufacture or business for trade tax when performed as a public utility function.

Desilting, filtration and purification of water by a Jal Sansthan did not amount to manufacture or business for levy under section 3G(3) of the U.P. Trade Tax Act, 1948. The definition of "manufacture" in section 2(e1) is wide, but its scope must be read in context, and section 3G(2) applies to goods purchased for resale or for use in manufacture or packing of goods for sale. A Jal Sansthan constituted under the U.P. Water Supply and Sewerage Act, 1975 performs a statutory public utility function, not a separate commercial manufacturing venture. The tax demand for alleged misuse of form IIID was therefore not sustainable, and the revisions were dismissed.

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Issues: Whether desilting, filtration and purification of water by a Jal Sansthan amounts to manufacture or business so as to attract the levy under section 3G(3) of the U.P. Trade Tax Act, 1948 for alleged misuse of form IIID.

Analysis: The definition of "manufacture" in section 2(e1) of the U.P. Trade Tax Act, 1948 is ordinarily wide, but it must yield to the subject and context where the opening words of the definition clause require that result. Section 3G(2) is aimed at denying concessional tax where goods are purchased for resale or for use in manufacture or packing of goods for sale. The Jal Sansthan was constituted under the U.P. Water Supply and Sewerage Act, 1975 to provide water supply and sewerage services, not to carry on buying and selling business. Its treatment of water was part of its statutory public utility function and not an independent manufacturing activity for sale. The relevant legal context therefore restricted the meaning of "manufacture" in section 3G(2) to manufacture for sale, and the connected activity did not amount to business in the absence of a separate commercial venture.

Conclusion: The Jal Sansthan was not a manufacturer for the purpose of section 3G(2), and the tax imposed under section 3G(3) for misuse of form IIID was not sustainable. The revisions were rightly dismissed.

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