Manufacture by cumulative processing: raw tobacco transformed into jarda, supporting set-off for the dealer.

Conversion of raw tobacco into chewing tobacco (jarda) was held to amount to manufacture because the goods underwent a series of connected processes-drying, sorting, blending, chemical treatment, fusion and further drying-that transformed the raw material into a commercially different product. The statutory definition of manufacture was applied broadly to include processing and treating goods, and the cumulative effect of multiple operations was treated as decisive where the original commodity lost its identity and character. The dealer was therefore entitled to set-off under the relevant rules, and the issue was answered in favour of the assessee.

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Issues: Whether the process of converting raw tobacco into chewing tobacco (jarda) amounts to manufacture within section 2(17) of the Bombay Sales Tax Act, 1959, and whether the dealer is entitled to set-off under rule 41D of the Bombay Sales Tax Rules, 1959.

Analysis: The raw tobacco underwent a series of connected operations, including drying, machine analysis and separation into different fractions, sorting, blending of selected portions, sprinkling of lime water and liquid chemicals, overnight fusion, and further drying before packing. On the statutory definition, manufacture includes producing, making, altering, ornamenting, finishing or otherwise processing or treating goods. Applying that test, the combined and successive processes brought about a transformation in the raw material and resulted in a commercially different product. The reasoning followed the principle that the cumulative effect of several processes may amount to manufacture where the original commodity loses its earlier identity and character.

Conclusion: The process amounted to manufacture, and the question was answered in the negative, in favour of the assessee.

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