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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: Whether the activity of producing computer stationery by cutting, perforating, folding and integrating paper with carbon amounted to manufacture under section 2(30) of the Assam Value Added Tax Act, 2003, and whether it fell within the negative list of "paper cutting from roll paper" so as to disentitle the unit from sales tax remission.
Analysis: The definition of manufacture under section 2(30) is inclusive and is satisfied when processing brings about a change in the article and results in transformation into a new and different commodity having a distinct name, character and use in commercial parlance. Applying the settled test, the activity in question was not a mere paper-cutting exercise. The raw materials, namely paper and carbon, underwent a series of mechanical processes including resizing, perforation, punching, fan-folding, numbering and pasting of carbon sheets, producing a composite article usable only as computer stationery. The resulting product acquired a separate commercial identity and could not be equated with ordinary paper or with the negative-list item of paper cutting from roll paper.
Conclusion: The activity constituted manufacture within the meaning of section 2(30) of the Assam Value Added Tax Act, 2003 and did not fall within the negative list. The petitioner was entitled to the claimed fiscal benefit and the contrary administrative order could not stand.
Ratio Decidendi: Where processing of raw materials produces a commercially distinct article with a separate identity, use and character, the activity amounts to manufacture even if multiple mechanical stages are involved.
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