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AI Drafter - (New and Powerful) ✕ Generate professional replies, appeals, opinions to Show Cause Notices, assessment orders, audit objections, and other legal communications using TaxTMI's AI Drafter.
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Issues: (i) Whether the activity of hammering and cutting larger stones into smaller stones resulted in production of different commercial commodities or commodities known differently in common parlance. (ii) Whether, after the amendment to the definition of manufacture in Section 2(16) of the Gujarat Sales Tax Act, 1969 with effect from 1 April 1989, such activity amounted to manufacture even without polishing.
Issue (i): Whether the activity of hammering and cutting larger stones into smaller stones resulted in production of different commercial commodities or commodities known differently in common parlance.
Analysis: The substituted definition of manufacture was applied to the activity in question. On the facts, the process carried out by the dealer produced smaller stones from larger stones by hammering and cutting, and the Tribunal's finding was that this resulted in a different commercial commodity. The objection that no polishing was done did not alter the character of the activity under the amended definition.
Conclusion: The issue was answered against the applicant and in favour of the Revenue.
Issue (ii): Whether, after the amendment to the definition of manufacture in Section 2(16) of the Gujarat Sales Tax Act, 1969 with effect from 1 April 1989, such activity amounted to manufacture even without polishing.
Analysis: The amended provision expressly included, in relation to marble and stone, hammering, cutting, sizing or polishing within manufacture. The Court held that the inclusion of these activities meant that polishing was not a prerequisite and that hammering and cutting alone were sufficient to fall within the statutory definition.
Conclusion: The issue was answered against the applicant and in favour of the Revenue.
Final Conclusion: The reference was decided by upholding the Tribunal's view that the dealer's activity constituted manufacture under the amended statutory definition.
Ratio Decidendi: Where the statute expressly includes specific processes such as hammering and cutting in the definition of manufacture for marble and stone, those activities constitute manufacture even without further processing or polishing.
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