Stone crushing is not manufacture where no new commercial commodity emerges; input tax credit and writ relief were refused.

Crushing stone boulders into blue metal jelly was held not to amount to manufacture because the activity did not produce a commercially different and distinct commodity; the stone retained its essential identity, so input tax credit on capital goods and spares was unavailable and the reversal of credit with consequential levy was upheld. The writ petitions were also not entertained because the dispute depended on factual appraisal of the nature of the activity and supporting documents, matters more appropriately pursued before the statutory appellate authority rather than in writ jurisdiction. The impugned assessment orders, tax and penalty therefore remained undisturbed.

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Issues: (i) whether crushing of stone boulders into blue metal jelly through mining and quarrying operations amounts to manufacture so as to entitle the petitioner to input tax credit on capital goods and spares; (ii) whether the writ petitions were maintainable in view of the availability of an effective appellate remedy.

Issue (i): whether crushing of stone boulders into blue metal jelly through mining and quarrying operations amounts to manufacture so as to entitle the petitioner to input tax credit on capital goods and spares.

Analysis: The definition of manufacture under Section 2(27) of the Tamil Nadu Value Added Tax Act, 2006 requires the emergence of a commercially different and distinct commodity. Capital goods under Section 2(11) are eligible for input tax credit only when used in the course of manufacture. On the facts, the activity consisted of extracting and crushing boulders into smaller stones or blue metal jelly, which retained the essential identity of stone and did not result in a new commercial product. The authorities and the earlier binding decisions relied on showed that variation in size or shape, without transformation into a different commodity, is not manufacture.

Conclusion: The crushing activity did not amount to manufacture, and the reversal of input tax credit and consequential levy were upheld.

Issue (ii): whether the writ petitions were maintainable in view of the availability of an effective appellate remedy.

Analysis: The disputes turned substantially on factual appraisal of the nature of the activity and the documents said to support the claim. Such questions were held to be fit for determination by the statutory appellate authority rather than in writ jurisdiction under Article 226 of the Constitution of India. The existence of an alternative remedy was therefore treated as a relevant and sufficient ground not to interfere with the impugned assessment orders.

Conclusion: The writ petitions were not entertained on the ground of alternative remedy.

Final Conclusion: The impugned orders reversing input tax credit and levying tax and penalty were left undisturbed, and the writ petitions failed in full.

Ratio Decidendi: For input tax credit on capital goods under the Tamil Nadu VAT regime, the underlying activity must produce a commercially different and distinct commodity; mere crushing of stones into smaller sizes is not manufacture, and disputed factual questions of that nature should ordinarily be pursued before the statutory appellate forum rather than in writ jurisdiction.

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