Manufacture for sales tax exemption requires a new commercial commodity; LPG bottling and equitable pleas failed.

An industrial policy exemption confined to products manufactured in new units could not be extended to bottling bulk LPG into cylinders, because the process did not create a new and distinct commercial commodity; bulk LPG remained LPG and the activity was not manufacture or production. The exemption claim therefore failed. Temporary eligibility certificates were only tentative and did not create an enforceable right, and promissory estoppel, contemporanea expositio, and non-collection of tax could not override the plain policy language or statutory sales tax liability. The writ petitions were dismissed and the interim orders vacated.

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Issues: (i) whether filling bulk liquefied petroleum gas into cylinders amounted to manufacture or production so as to qualify the units for sales tax exemption under the industrial policy; (ii) whether temporary or final eligibility certificates, promissory estoppel, contemporanea expositio, or non-collection of tax could defeat the State's claim for sales tax.

Issue (i): whether filling bulk liquefied petroleum gas into cylinders amounted to manufacture or production so as to qualify the units for sales tax exemption under the industrial policy.

Analysis: The exemption under the industrial policy was confined to sales tax on products manufactured in new industrial units. The Court held that the policy and its guidelines had to be read as a whole and strictly according to their language. On the facts, the bottling activity did not bring into existence a new and distinct commercial commodity. Bulk LPG remained LPG even after being filled into cylinders, and the regulatory instruments governing supply, distribution, and cylinder safety did not establish any manufacturing process. The claim based on the absence of express inclusion in the ineligible list was rejected because the policy was limited to manufactured products.

Conclusion: The units were not engaged in manufacture or production of a new product and were not entitled to sales tax exemption.

Issue (ii): whether temporary or final eligibility certificates, promissory estoppel, contemporanea expositio, or non-collection of tax could defeat the State's claim for sales tax.

Analysis: The temporary eligibility certificates were only tentative and subject to final determination by the competent authority. The Court held that such certificates did not create an enforceable right when the final authority had not granted eligibility, and the initial administrative understanding could not override the policy language. Promissory estoppel was inapplicable because there was no clear promise to grant exemption irrespective of manufacture. The plea based on non-collection of tax was also rejected because liability to pay sales tax arose by statute and did not depend on whether tax had been collected from purchasers.

Conclusion: The petitioners could not rely on eligibility certificates, promissory estoppel, contemporanea expositio, or non-collection of tax to avoid liability.

Final Conclusion: The exemption claims failed and the writ petitions were dismissed, with the interim orders vacated.

Ratio Decidendi: An exemption confined to manufactured products cannot be extended to a process that does not create a new and distinct commercial commodity, and tentative administrative certificates or equitable doctrines cannot override the plain terms of the exemption scheme.

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