Manufacture test under Assam tax law: purifying raw water into packaged drinking water was not treated as manufacture.

Purification of raw water into packaged drinking water does not amount to manufacture where the process does not create a distinct commercial commodity with a changed identity, nature or character. Applying the statutory test under the Assam tax laws, the court noted that the water remained water, with its essential use unchanged, and that the process only improved quality. Earlier decisions on comparable processing, including filtration of raw mustard oil, were treated as supporting the same principle. The challenge to the impugned order failed, and the Revenue's position was upheld. The question of cancellation of eligibility certificates on a mere change of opinion was left for the competent authority to examine in accordance with law.

---

---

Issues: Whether processing of raw water into packaged drinking water amounts to manufacture under section 2(30) of the Assam Value Added Tax Act, 2003 and section 2(22) of the Assam General Sales Tax Act, 1993.

Analysis: The definition of manufacture under the Assam tax laws is wide, but the controlling test remains whether the process results in a distinct and new commercial commodity with a changed identity, nature and character. Applying that test, the purification of raw water into drinking water was held not to change the essential identity of the commodity. The water continued to remain water, its character and use remained the same, and only its quality was improved. The earlier decisions on comparable processes and the decision on filtration of raw mustard oil were treated as supporting the same principle. The question of cancellation of eligibility certificates on a mere change of opinion was not finally decided and was left to the concerned authority to examine according to law.

Conclusion: Processing of raw water into packaged drinking water does not amount to manufacture. The challenge to the impugned order failed and the Revenue's stand was upheld.

---