Manufacture includes gas compression into CNG and PNG, securing entry tax exemption for capital goods and refund.

The wide statutory meaning of "manufacture" under the Uttar Pradesh trade tax framework applied to the entry tax exemption notification for capital goods, plant and machinery used in manufacturing. Compressing natural gas into CNG and PNG was treated as processing and making a commercially distinct product, and an earlier section 35 determination had also recognised the assessee as a manufacturer. The contrary administrative view that no new commercial identity emerged was rejected. The assessee was therefore held entitled to exemption under the 18.02.2003 notification and to refund of the entry tax paid.

---

---

Issues: Whether the revisionist was a manufacturer of Compressed Natural Gas and Piped Natural Gas so as to be entitled to exemption from entry tax on capital goods and machinery brought into the local area for use in such manufacturing under the notification dated 18.02.2003.

Analysis: The notification issued under section 4-B of the Uttar Pradesh Tax on Entry of Goods Act, 2000 exempted entry tax on capital goods, plant, machinery and spare parts brought into a local area for use in manufacturing. The term "manufacture" was not defined in the Act of 2000, and by section 2(2) its meaning had to be taken from section 2(e-1) and section 2(ee) of the Uttar Pradesh Trade Tax Act, 1948. Those provisions define manufacture in very wide terms, including producing, making, altering, processing, treating or adapting goods. Conversion of natural gas into CNG and PNG by compression was held to involve processing and making of a commercially distinct product, and the earlier determination under section 35 of the Act of 1948 also treated the revisionist as a manufacturer. The contrary view taken by the authorities, based on the absence of a new commercial identity, was held unsustainable.

Conclusion: The revisionist was held to be a manufacturer of CNG and PNG and was entitled to the exemption under the notification dated 18.02.2003, with refund of the entry tax paid.

---