Cutting paper to smaller sizes is not manufacture, so exemption for cut-size paper is unavailable.

Cutting big-size paper into smaller sizes does not amount to manufacture because the process merely changes dimensions without bringing into existence a new commercial commodity with a different identity. Although the statutory definition of manufacture is wide, it does not cover every alteration or processing of goods. Paper cut to size continues to remain paper, retains its commercial identity, and does not become a new marketable product. On that basis, exemption under Section 4-A of the U.P. Trade Tax Act is not available for cut-size paper.

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Issues: Whether cutting paper into desired sizes amounts to manufacture so as to entitle the assessee to exemption under Section 4-A of the U.P. Trade Tax Act.

Analysis: The definition of manufacture under Section 2(e-1) is wide, but it does not extend to every alteration or processing of goods. The decisive test is whether the process brings into existence a new commercial commodity with a different identity. On the facts, cutting big size paper into smaller sizes only changes the dimensions of the same commodity. The paper continues to remain paper, retains its commercial identity, and no new marketable product emerges. The authorities cited by the assessee were held distinguishable on their facts, while the decisions holding that mere cutting or size reduction does not amount to manufacture were applied.

Conclusion: Cutting paper into desired sizes does not amount to manufacture, and the assessee is not entitled to exemption under Section 4-A on cut-size paper.

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