TaxTMI 
TaxTMI 
1993 (12) TMI 216
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....iii) states that industry should not be one specified in the appendix to the notification. Appendix does not refer to the industry of the petitioner. In the year 1985 the Deputy Commissioner of Commercial Taxes issued a clarification, obviously on the basis of a letter of the Commissioner stating that the petitioners were eligible for the exemption as per the said notification of March 31, 1983. In the appendix thirteen industries are mentioned. The said letter nowhere refers to the particular activity carried on by the petitioners. Subsequently on July 4, 1987, the Commissioner of Commercial Taxes issued a circular as follows: "Since polished Cuddapah, Shahabad and marble stones are not a commercially different commodity from the unpolished ones, no new commodity is obtained and hence polishing of these stones does not amount to manufacture. Hence, the benefit of concession of 50 per cent exemption would not be available." In view of the above clarification, assessment orders made were sought to be revised under section 21(4) of the Act. Similarly the assessing authority also made an endorsement that since polished Shahabad stones are not a commercially different commodity f....
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....h sides referred to several decisions, some of which shall have to be referred. In this context Mr. Ramabhadran also referred to Part S of the Second Schedule to the Act. Serial No. 17 of Part S refers "stones, that is to say.........." Thereafter various stones are referred. Different rates of taxes are provided regarding polished, unpolished and chips of several kinds of stones. From this it was contended that the Legislature itself has treated a polished stone different from an unpolished stone and similarly chips are different from the raw stone. According to the learned counsel for the petitioners this is a clear indication of the fact that they are commercially different articles and if so, the change of the status of the stone from one category to the other involves manufacture. A similar contention was in fact advanced by the State when the State contended that timber is different from timber sizes or logs, etc., for which purpose, Part T, item 9 was relied upon in Bangalore Wood Industries v. Asst. Commissioner of Commercial Taxes (W.P. No. 27509 of 1991, etc., decided on 15th July, 1993*). This contention was not accepted by the Division Bench. The Bench pointed out that ....
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.... Act. However, at page 66 the court referred to the concept of manufacture thus: "Manufacture implies a change, but every change is not manufacture, and yet every change in an article is the result of treatment, labour and manipulation. But something more is necessary........... There must be transformation; a new and different article must emerge, 'having a distinctive name, character or use'." Proceeding further the Supreme Court thereafter referred to further observation of the American Supreme Court stating that: "At some point processing and manufacturing will merge. But where the commodity retains a continuing substantial identity through the processing stage we cannot say that it has been 'manufactured'." Therefore it is clear that the Supreme Court was concerned with the two aspects (i) concept of consumption as well as (ii) the concept of manufacture, which was essential for a proper determination of the question before the Supreme Court. Sterling Foods v. State of Karnataka [1986] 63 STC 239 is another decision of the Supreme Court. The process undergone by the shrimps, prawns and lobsters did not result in the change of the original character and identity and....
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....ighted the difficulty involved in applying the settled principles, though in the said case the processes involved were held as part of the manufacturing activity. The learned Government Pleader on the other hand relied on the decision of the Rajasthan High Court in Assistant Commercial Taxes Officer v. Sitaram Badrilal [1986] 61 STC 258 wherein the Bench of the Rajasthan High Court held that even after polishing the stones they do not lose the original identity and a separate commercial article does not come into being for being marketable; essentially it is the same commercial commodity. Therefore the court held that the polishing of stones does not come within the term "manufacture" as defined in the State enactments. In Bangalore Wood Industries case (W.P. No. 27509 of 1991*) the timber logs and sizing of timber and similar activities were held as not altering the substances of the original material and all of them come within the concept of timber. To the same effect is the decision of the Supreme Court in Collector of Central Excise v. Kutty Flush Doors & Furniture Co. (P) Ltd. [1988] 70 STC 314. It was held in Bangalore Wood Industries case (W.P. No. 27509 of 1991*) that t....