Broad definition of manufacture covers lacquering of hardware and locks, while factual responsibility was remitted for reconsideration.

Lacquering of hardware and locks was treated as manufacture under the U.P. Trade Tax Act, 1948 because the statutory definition of manufacture is broad and includes finishing, treating and processing goods; the usual test of whether a new commercial commodity emerges was therefore not decisive. The court also noted that lacquering could affect marketability and price. On the separate factual question whether the assessee itself carried on the lacquering activity, the Tribunal had not given a specific finding despite the assessee's denial and challenge to the evidence, so that issue was remitted for fresh decision on the material.

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Issues: (i) Whether lacquering of hardware and locks amounts to manufacture under the U.P. Trade Tax Act, 1948; (ii) Whether the Tribunal's finding that the assessee itself carried on lacquering activity was supported by material and evidence.

Issue (i): Whether lacquering of hardware and locks amounts to manufacture under the U.P. Trade Tax Act, 1948.

Analysis: The definition of manufacture under Section 2(e-1) of the U.P. Trade Tax Act, 1948 is wide and includes producing, making, altering, ornamenting, finishing, processing, treating or adapting goods. In view of this expanded definition, the test whether a new commercial commodity comes into existence is not under the Act. Lacquering is a process of finishing or treating goods and, on the assessee's own case, it affected marketability and price.

Conclusion: The process of lacquering amounts to manufacture under the Act, against the assessee and in favour of the Revenue.

Issue (ii): Whether the Tribunal's finding that the assessee itself carried on lacquering activity was supported by material and evidence.

Analysis: The assessee consistently disputed that the lacquering was done by it and denied having the raw material, equipment or workmen necessary for such activity. The Tribunal recorded the assessee's stand but did not deal with it and did not return a specific finding on whether the assessee had in fact carried on the activity. A finding on this factual issue was necessary before fastening liability as manufacturer.

Conclusion: The finding on this issue was set aside and the matter was remitted to the Tribunal for fresh decision on the evidence.

Final Conclusion: The legal position on manufacture was decided against the assessee, but the factual determination on whether the assessee itself carried on lacquering was left to be reconsidered by the Tribunal on remand.

Ratio Decidendi: Under Section 2(e-1) of the U.P. Trade Tax Act, 1948, manufacture includes finishing, treating or otherwise processing goods, and liability cannot be tested only by asking whether a new commercial commodity emerged.

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