Manufacture includes crushing stones into gitti when the process creates a new commercial article with distinct use and character.

Crushing stones or boulders into gitti, ballast or metal is treated as manufacture under Section 2(j) of the Madhya Pradesh General Sales Tax Act, 1958 because the process converts a raw material into a new commercial article with a distinct name, character and use for construction purposes. The note applies the settled transformation test and concludes that the activity is not a mere change in shape but a manufacturing process. On that basis, the petitioner was held entitled to consideration for an eligibility certificate for sales tax exemption.

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Issues: Whether crushing stones or boulders into gitti, ballast or metal amounts to manufacture within Section 2(j) of the Madhya Pradesh General Sales Tax Act, 1958, and whether the petitioner was entitled to an eligibility certificate for sales tax exemption.

Analysis: The definition of manufacture in the Act is wide and includes any process of producing or making goods. The process in question changes larger stones and boulders into a new commercial article of different size and use, suitable for construction purposes. Applying the settled test that manufacture requires a transformation resulting in a new and different article having a distinctive name, character or use, the process of crushing stones into gitti is not a mere change in shape but a manufacturing activity. The contrary view taken in the later Division Bench decision was treated as distinguishable on facts.

Conclusion: Crushing stones or boulders into gitti, ballast or metal is manufacture within Section 2(j) of the Act, and the petitioner was entitled to consideration for the eligibility certificate.

Ratio Decidendi: A process amounts to manufacture when it transforms a raw material into a new commercial commodity having a distinctive name, character or use, and crushing stones into gitti satisfies that test.

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