TaxTMI 
TaxTMI 
1998 (9) TMI 507
X X X X Extracts X X X X
X X X X Extracts X X X X
....es on business in manufacture and sale of oils at Agra in the State of Uttar Pradesh (U.P.). As a part of their business they purchase crude oil of different varieties, such as linseed oil, castor oil, mustard oil and, after refining, sell as refined oil. The refinement is brought about by first treating the oil with alkali to remove the acid contents, then bleaching it with absorbent cotton or activated carbon and lastly deodorising it with steam. 2.. To ascertain whether they were liable to pay tax on the sale of refined oil as they had already paid tax for purchase of the crude oil and, if so, what would be the rate thereof, the appellant approached the Commissioner of Sales Tax, U.P. invoking the provisions of section 35 of th....
X X X X Extracts X X X X
X X X X Extracts X X X X
....refined oil inasmuch as the meaning of the word "manufacture" in section 2(e-1) of the Act clearly envisages any sort of processing. Therefore, he contended, the question whether the crude oil maintained its character as oil even after refinement was redundant. 5.. Under section 2(e-1) of the Act "manufacture" means producing, making, mining, collecting, extracting, altering, ornamenting, finishing or otherwise processing, treating or adapting any goods; but does not include such manufactures or manufacturing processes as may be prescribed. Section 3 of the Act, so far as it is relevant for our purposes reads as under: "3. Liability to tax under the Act.-(1) Subject to the provisions of this Act, every dealer shall, for each assessmen....
X X X X Extracts X X X X
X X X X Extracts X X X X
....s subjected to a process or treatment with a view to its development or preparation for the market it would amount to processing. The nature and extent of processing may vary from case to case; in one case the processing may be slight and in another it may be extensive; but in each process suffered, the commodity would experience a change. This Court further observed that whatever be the means employed for carrying out the processing operation, it is the effect of the operation on the commodity that is material for the purpose of determining whether the operation constitutes processing. Viewed in the context of the above meaning given to the word "processing" by this Court there cannot be any manner of doubt that the nature and extent of th....
X X X X Extracts X X X X
X X X X Extracts X X X X
....ithin the meaning of section 5 of the Central Sales Tax Act, 1956. In answering the above question this Court applied the "commercial parlance" test and relying upon its earlier judgment in Deputy Commissioner of Sales Tax (Law) v. Pio Food Packers [1980] 46 STC 63 (SC); [1980] 3 SCR 1271 held that processed shrimps, prawns and lobsters are not a new and distinct commodity but they retain the same character as the original shrimps, prawns and lobsters even after the processing. This case is of no assistance to the appellant for unlike the above commodity, the crude oil does not at all retain its earlier character after processing. 9.. In Shiv Datt & Sons [1992] 84 STC 497 (SC); (1993) Supp 1 SCC 222, the question was whether the dealer w....