2002 (11) TMI 112 - SC - VAT / Sales Tax

Crushing stone boulders into 'gitti' and metal sizes: treated as non-manufacture u/s2(17); appeal dismissed

Crushing stone boulders into metal of different sizes (commonly called 'gitti') was assessed for whether it constitutes 'manufacture' under s. 2(17) of ... Manufacture - Gitti - Whether on the facts and circumstances of the case and on a true and correct interpretation of the provision of Section 2(17) of the Bombay Sales Tax Act, was the Tribunal justified in holding that crushing of boulders resulting in metal of different sizes ordinarily known as 'Gitti' does not amount to manufacture? - HELD THAT:- The processes of producing, making, extracting, alternating, ornamenting, finishing or otherwise processing, treating or adapting of any goods fall within the meaning of the term 'manufacture'. But it may be pointed out that every type of variation of the goods or finishing of goods would not amount to manufacture unless it results in emergence of new commercial commodity. In the instant case, the very nature of the activity does not result in manufacture because no new commercial commodity comes into existence. This Court in Commissioner of Sales Tax, Uttar Pradesh v. Lal Kunwa Stone Crusher (P) Ltd.[2000 (3) TMI 58 - SUPREME COURT], on an identical question, expressed the view that when stone boulders were crushed into stone chips, gitti and stone ballast, the process could not be termed as 'manufacture'. That case arose under the Uttar Pradesh Sales Tax Act, 1948 (for short, 'the Act'). The definition of 'manufacture' in Section 2(e-1) of the U.P. Act appears to be similar to the definition under consideration. Respectfully following the same, we find no illegality in the impugned judgment of the High Court. The civil appeal is, therefore, dismissed. Issues:Interpretation of the term 'manufacture' under Section 2(17) of the Bombay Sales Tax Act, 1959.Analysis:The case involved a question referred by the Maharashtra Sales Tax Tribunal to the High Court regarding whether the crushing of boulders into smaller sizes, known as 'Gitti', amounts to manufacture under Section 2(17) of the Bombay Sales Tax Act. The assessee purchased boulders and crushed them into 'Gitti', seeking clarification on the manufacturing process. The Deputy Commissioner considered the conversion as 'manufacture', but the Tribunal disagreed. The High Court, relying on precedents, held that the process did not constitute 'manufacture'. The appellant challenged this view. The definition of 'manufacture' under Section 2(17) includes various processes like producing, making, or treating goods, but it requires the emergence of a new commercial commodity. The Supreme Court cited a similar case under the Uttar Pradesh Sales Tax Act, where crushing boulders did not amount to 'manufacture'. The Court agreed with this precedent, finding no fault with the High Court's decision. Another judgment was distinguished as not applicable. Consequently, the civil appeal was dismissed without costs.