TaxTMI 
TaxTMI 
2003 (8) TMI 497
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....ered dealer registered under the Bengal Finance (Sales Tax) Act, 1941 and West Bengal Sales Tax Act, 1954 and also under the Central Sales Tax Act, 1956. In the permanent S.S.I. certificate, the activity of the petitioner No. 1 has been recorded as manufacturing activity of filtered edible oil. On the petitioner's application for grant of eligibility certificate in the year, 1994, on being satisfied, respondent No. 1 granted eligibility certificate for one year only, that is, from April 24, 1994 to April 24, 1995 (correct date is April 24, 1993 to April 23, 1994). But when the petitioner on March 11, 1994 filed application for renewal of eligibility certificate, respondent No. 1, after inspection, refused to grant the same by order dated September 4, 1995 on the plea that no manufacturing activity is carried on by the petitioner whose activity only amounted to reselling refined soyabean oil and til oil. The petitioner filed revisional application before respondent No. 2, the Deputy Commissioner who affirmed the order of respondent No. 1 so far as soyabean oil is concerned but set aside the order concerning "til " oil and directed respondent No. 1 to pass a fresh order over the same....
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....n in section 2(dd) of the Act of 1941 reads thus: " 'Manufacture' with all its grammatical variations and cognate expressions means producing, making, extracting (or blending) any goods; but does not include such manufactures or manufacturing processes as may be prescribed." It may be mentioned that no prescription as per that section has been made as regards particular type of processing or manufacturing processes-which are liable to be excluded from the definition of manufacture. 5.. It has been submitted by Sri M.L. Bhattacharyya, learned Advocate for the petitioner, that both the respondents, namely, respondents Nos. 1 and 2 inspected the petitioner's factory and found the process of manufacture carried out by the petitioner there. Those processes or procedure followed have been given in the impugned order dated October 9, 1998 of respondent No. 1. Refined oil is put in a storage tank and then that input (refined oil) is passed through a vessel where it is treated with temperature, soil (mati), activated carbon and thereafter oil is passed through a device called micro processing which filters the oil which is the final output. It is held by respondent No. 2 in the imp....
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....re became further refined through filtration. Ultimately the product used to be packed in small containers for sale under the brand name of "Nihar". The revenue authorities did not consider such activity as manufacture with the idea that the final product did not amount to a new commercial product. As that was a case of "blending" and as that word "blending" has been specifically used in the definition of "manufacture" and as judicial notice of two distinct commodities as per trade parlance was taken by the Tribunal, the Tribunal in that case set aside the order of the revenue authorities. 6.. Mr. J.K. Goswami, learned State Representative on the other hand submits that the petitioner has been described as manufacturer of til oil and vegetable oil in the registration certificate but has been described in the eligibility certificate and S.S.I. certificate as manufacturer of refined til oil and refined vegetable oil or filtered edible oil. These point to addition of certain process to the original manufacturing process. This is only a refining process to the original manufacturing process. By that refining process, no change takes place. Even if there is any change, that change is....
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....itial stage before processing and the oil that ultimately comes out after processing. He could feel it in his naked eye. But he could not concur with the stand taken by the petitioner that the ultimate product is a different commercial commodity. In this case, there is no such blending done as in the reported case Abdos Oil (P.) Ltd. (1999) 33 STA 95. Neither party has adduced any evidence on the point as to whether soyabean oil or til oil before processing and soyabean oil and til oil after processing are different commercial commodities or not. However, we may take note that when a complete transformation in the original article takes place-so much so-that a new commercial article or commodity emerges, the said process may be termed as manufacturing activity. But in the case before us we do not find that the original article-til oil and vegetable oil which are edible oil input have been completely transformed into a different article. Those very well remain edible soyabean oil and edible til oil or refined til oil or refined soyabean oil. It has been held by the Supreme Court that "manufacture" is the end result of one or more processes through which the original commodity is mad....
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..... The application is, therefore, liable to be dismissed and is dismissed. We make no order as to costs. D. BHATTACHARYYA (Technical Member)-I agree. [Against this decision the assessee filed writ petitions before the High Court]. Mihir Lal Bhattacharya, Senior Advocate and Prithu Dudhoria, for the petitioners. Mrs. Seba Roy, for the respondents. JUDGMENT ASOK KUMAR GANGULY, J.-This writ petition has been filed challenging the judgment and order dated 12th July, 2002 passed by the West Bengal Taxation Tribunal in R.N. Case No. 227 of 2000. 2.. By the said judgment, the West Bengal Taxation Tribunal (hereinafter referred to as "the said Tribunal") passed an order, inter alia, holding that the process of making refined soyabean oil and See page 618 supra. refined til oil from the input edible soyabean oil and til oil does not amount to manufacture and as such, the impugned orders which were challenged before the Tribunal, were upheld. 3.. The material facts of the case are that the petitioner claims to be a manufacturer of til oil and refined soyabean oil having its factory at 120K, G.T. Road, Kotrang, District, Hooghly. The petitioner claims to be a registe....
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....ion Tribunal, after hearing the counsel for the parties, set aside both the orders of the revisional authority, viz., the Assistant Commissioner dated September 4, 1995 and the Deputy Commissioner dated December 14, 1995 in respect of soyabean oil. The matter was remitted to the Assistant Commissioner for a fresh determination with the following directions: "The matter is remitted to the Assistant Commissioner for a fresh determination as to whether the applicants are actually manufacturing edible soyabean oil as claimed by them and thereafter for disposal of the application for renewal of eligibility certificate in respect of soyabean oil for the period already mentioned. The order of remand already made by the Deputy Commissioner in his order dated December 14, 1995 in respect of til oil should also be carried out by the Assistant Commissioner as directed by the Deputy Commissioner. Let it be made clear that all the issues by the applicants are left open." 6.. Thereafter the Assistant Commissioner again passed an order October 9, 1998 rejecting the application for renewal of the petitioner. In the said order it was again found that the petitioner simply brings refined soyab....
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....rocess involved in the factory of the petitioner, there has been any error committed by the Tribunal. In paragraph 7 of the judgment, the learned Tribunal held, and in our view rightly, that the expression "manufacture" in the context of sales tax law has now acquired a settled legal connotation. According to the settled position "manufacture" in sales tax law implies a change but it is equally well-settled that every change is not "manufacture". Only a change as a result of which a new different and distinct article emerges with distinct character and use would amount to manufacture. It is also equally settled that there may be several processes involved but even after going through those processes, manufacture may not take place, if no new commercial commodity emerges as a result of such processes. It has also been held by the learned Tribunal and we affirm the said finding that if over certain goods some labour is employed and even thereafter the goods remain essentially the same commercial item, it cannot be said that the final product is a result of manufacture. 9.. The Tribunal considered the National Test House Report as also the report of the chemist. We have also see....
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.... materials as these are pure questions of facts. 12.. In attacking the said judgment of the Tribunal the learned counsel for the petitioner has relied on various judgments. Some of the judgments deal with the question of interpretation of taxing statute. 13.. In the instant case there is no question of interpretation of taxing law. The question of interpretation comes into play in a See page 623 supra. situation where two interpretations are possible. And in such a situation the interpretation which supports the contention of the taxpayer may have to be accepted. But in the instant case on repeated inspection of the processes involved in the factory of the petitioner it was found by the proper fact-finding authority, that as a result of the processes undergone in the factory of the petitioner, manufacturing does not take place. In other words, as a result of employment of various processes, no new commercial commodity with distinct identity, character and use comes into existence. A mere change between the input and output through the processes will not amount to manufacture. This has been found by several authorities on actual inspection of the processes involved in the p....
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....ng that the undertaking should not be formed in any manner provided in clause (i) of section 15C(2). By the said restriction the Legislature wanted to control any abuse of the beneficiary provision. But the court held that the intention of the Legislature was not to deny the benefit to genuinely established new industrial undertaking. 18.. In the context of those facts the observation of the honourable Supreme Court about liberal construction of taxing statute were made. But here, those questions are not at all relevant, as pointed out above. Here no question of interpretation is involved inasmuch as there is no scope for two opinions on the end-product which emerges as a result of the processes employed in the factory of the petitioner. 19.. On the question of interpretation of the taxing statute, the learned counsel also relied on the decision of the Supreme Court in the case of Commissioner of Sales Tax v. Industrial Coal Enterprises reported in [1999] 114 STC 365. That was also a case of granting an exemption to new industrial unit. On consideration of the facts of the case, the Supreme Court came to the conclusion in para 11 of the judgment, by relying on the previous de....