Crushing stone into gitti is not manufacture, and diesel for stone crushers is not eligible for input tax rebate.

Crushing boulders into gitti does not amount to manufacture under the Madhya Pradesh Value Added Tax Act because the process does not create a new commercial commodity with a distinct name, character or use; the goods remain stone in commercial substance. Diesel used to run the stone crusher is not eligible for input tax rebate under Sections 14 and 14(1AC) because fuel used merely to operate machinery is not a specified input for rebate and the statutory conditions were not satisfied. The stated ratio is that size reduction alone is insufficient for manufacture, and rebate is unavailable unless the statute specifically permits it for the relevant input.

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Issues: (i) Whether crushing boulders into gitti amounts to manufacture under the Madhya Pradesh Value Added Tax Act, 2002. (ii) Whether diesel used to run the stone crusher qualifies for input tax rebate under Section 14 and Section 14(1AC) of the Madhya Pradesh Value Added Tax Act, 2002.

Issue (i): Whether crushing boulders into gitti amounts to manufacture under the Madhya Pradesh Value Added Tax Act, 2002.

Analysis: Manufacture requires a process that brings into existence a new and different commercial commodity having a distinct name, character or use. Mere reduction in size of stones by crushing does not alter the basic identity of the goods. Gitti remains stone in commercial substance, and the activity does not amount to transformation into a new commodity.

Conclusion: Crushing boulders into gitti does not amount to manufacture.

Issue (ii): Whether diesel used to run the stone crusher qualifies for input tax rebate under Section 14 and Section 14(1AC) of the Madhya Pradesh Value Added Tax Act, 2002.

Analysis: Input tax rebate is available only in respect of specified purchases made by a registered dealer in accordance with the statutory scheme. Diesel used merely as fuel for operating machinery is not raw material for manufacturing gitti, and the dealer was not engaged in the sale or purchase of diesel as a taxable input for rebate purposes. The statutory conditions for rebate were therefore not satisfied.

Conclusion: Diesel used for running the crusher is not eligible for input tax rebate.

Final Conclusion: No substantial question of law arose, and the challenge to the orders below failed.

Ratio Decidendi: Crushing stones into smaller pieces without emergence of a new commercial commodity is not manufacture, and input tax rebate cannot be claimed on fuel used merely to operate machinery unless the statute specifically permits rebate on that input.

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