Manufacture in softy ice-cream production upheld where raw materials and processing went beyond simple cooling under sales tax law.

Preparing and selling softy ice-cream was treated as manufacture under the Gujarat Sales Tax Act because the process went beyond mere cooling or condensing. The court accepted the factual finding that the assessee used multiple raw materials, including sweetened milk, concentrates, powders, additives, flavour and colour, to produce the final product. Section 2(16) was applied, and the excluded processes under rule 3 of the Gujarat Sales Tax Rules were held not to cover the activity. The tax assessment challenge therefore failed.

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Issues: Whether the assessee's activity of preparing and selling softy ice-cream amounted to manufacture under the Gujarat sales tax law, and whether the activity fell within the excluded processes under the Gujarat Sales Tax Rules.

Analysis: The assessee's claim of mere cooling and condensing of pre-prepared mixture was rejected on facts. The authorities found that the assessee purchased and used several raw materials, including sweetened milk, soft-drink concentrate, chocolate powder, vanilla powder, food additives, flavour and colour, and that the process involved was more elaborate than simple cooling. The definition of manufacture in section 2(16) of the Gujarat Sales Tax Act was applied, and the processes excluded by rule 3 of the Gujarat Sales Tax Rules were found not to cover the assessee's activity.

Conclusion: The activity constituted manufacture and the assessee's challenge to the tax assessment failed.

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