TaxTMI 
TaxTMI 
1990 (1) TMI 289
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....plicant to set-off under rule 41-A of the Bombay Sales Tax Rules, 1959, in respect of such materials? (2) If the answer to the aforesaid question is against the applicant, whether the tanning materials, lime, chemicals, oils used in the process of conversion of raw hides into tanned hides and skins and which are sold thereafter can be said to have been resold within the meaning of the term under the Act so as to entitle the applicant to set-off under rules 42 and 43 of the Bombay Sales Tax Rules, 1959?" Additional question in Sales Tax Reference No. 21 of 1986 is: "Whether, on the facts and in the circumstances of the case, was the Tribunal justified in holding that the Sales Tax Officer had jurisdiction to rectify the order under section 62 of the Bombay Sales Tax Act, 1959?" 2.. The assessee carries on business. It purchases raw hides and skins and also tanning materials, like oil, chemicals, hards, lime. The raw hides and skins are converted into dressed hides and skins by a process of cleaning and tanning. While cleaning the sheep skin, the assessee gets raw wool as a subsidiary or by-product. The dressed hides and skins as well as raw wool are sold to the registere....
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....This point is neither implicit in nor covered by the questions of law referred to this Court. The facts necessary for adjudication of such a point are also not on record. Accordingly, we do not think that Shri Joshi can be allowed to argue this aspect of the matter in these references. 5.. As regards the first common question what requires consideration is whether the assessee is or can be said to be a manufacturer of hides and skins. In other words whether the process of converting raw hides and skins into finished and dressed hides and skins amounts to "manufacture" within the meaning of section 2(17) of the Bombay Sales Tax Act, 1959 (for short "the Act") which defines the word "manufacture" thus: "'manufacture', with all its grammatical variations and cognate expressions, means producing, making, 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." Apparently the definition is broad enough to include the treating or adapting any goods as "manufacture". The process of converting raw hides and skins into tanned or dressed hides and ski....
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.... to grant relief to a manufacturing dealer with the aim of seeing that the cost of manufacture in this State did not bear too heavy an incidence of taxation. But for such provisions for a set-off, refund, etc., the ultimate cost of the finished product would have to bear the cost of purchase tax or the amounts collected by way of tax from the manufacturing dealer in respect of raw materials, even semi-finished products and containers and packing materials for the manufactured goods, thus increasing the ultimate cost of the goods. The State intended to give this benefit to its own industries not only in respect of local sales or inside State sales made by them but also in respect of outside State sales made by them so that the goods manufactured in this State might not suffer in competition with goods manufactured in other States." He had also referred to another decision of this Court in the case of Commissioner of Sales Tax v. Automatic Engineering Works [1981] 47 STC 343, Kerala High Court decision in the case of Deputy Commissioner of Sales Tax v. Kerala Industrial Works [1987] 66 STC 415 and Gujarat High Court decision in the case of State of Gujarat v. Wood Polymer L....
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....but it cannot do something in the vacuum. Moreover, the law in this regard is clear. Though in common parlance or even under the definition of the word "manufacture" without taking into account the exception provided therein the assessee is a manufacturer, the exception requires that it should not be treated as a manufacturer. Merely because the assessee is not a manufacturer in law though as a matter of fact it is, it cannot automatically mean that it resells the goods. There is, in our judgment, no legal contradiction. The second common question of law is also, thus, answered in the negative and in favour of the Revenue. 8.. This takes us to the additional question raised in Sales Tax Reference No. 21 of 1986. For the three years involved therein covering the period from April 1, 1964 to March 31, 1967, the set-off was granted to the assessee while completing the assessments originally. Subsequently, it was felt that the set-off was wrongly allowed to the assessee. Accordingly after allowing the assessee an opportunity of being heard as contemplated under section 62, the Sales Tax Officer started rectification proceedings, rectified the relevant assessments and withdrew the....