TaxTMI 
TaxTMI 
2016 (7) TMI 287
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....al Tax Tribunal at Lucknow which has upheld the judgment of the first appellate authority and rejected the appeal of the revisionist whereby the matter has been carried forward further to this court by way of this revision. Contention of the revisionist is that it purchases wood and bamboo and after undertaking a process of debarking and cutting including removal of roots same is manufactured as saleble item and is sold. Based on this contention it says that it is entitled to the benefit of Section 13 of the Act of 2008 under which subject to the provisions of the said Act dealers referred to in the clauses mentioned therein and holding a valid registration certificate under the said Act, shall, in respect of taxable goods purchased within the State and mentioned in such clauses, subject to the conditions given therein and such other conditions and restrictions as may be prescribed, be allowed credit of an amount, as I.T.C., to the extent provided by or under the relevant clause. Section 13(1)(a) provides that subject to conditions given in column 2, every dealer liable to pay tax, shall, in respect of all taxable goods except non-vat goods, capital goods and captive power pl....
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....od and bamboo, therefore, the process does not involve any manufacture. Consequently the benefit of I.T.C. under Section 13 is not available to the revisionist. The reversion of an I.T.C. under Rule 21(1)(a)(f) of the VAT Rules was justified. The waste product and fire-wood resulting from the process allegedly undertaken by the revisionist has not been shown in the closing stock of the relevant year nor any sale has been shown. The sale of waste product and fire-wood is alleged to have been disclosed in the year 2015-16. The Tribunal arrived at the conclusion as was of the appellate authority also that wood and bamboo had been purchased by the revisionist in square meters and were sold as bamboo and wood. Reliance has been placed upon the judgment of the Supreme Court rendered in the case of CST v. Lal Kunwa Stone Crusher (P) Ltd., (2000) 3 SCC 525, wherein it was held that gitti etc. produced as a consequence of crushing of boulders were not a new commercial item having a totally different identity than boulders, therefore, the process did not involve any manufacture of new item. The Tribunal also relied upon a judgment of the Supreme Court rendered in the case of C.S.T. v. Sarvsh....
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....nsideration before the Supreme Court in the case of CST v. Lal Kunwa Stone Crusher (P) Ltd., (2000) 3 SCC 525, though, in a different context, but one of the contentions before the Supreme Court, based on the said definition, was that the definition used for the purpose of 'manufacture' in the Act makes it very clear that every activity in relation to goods not only altering the same, but also processing of the same has also been included and based thereon the Department contended that the items resulting from crushing of boulders such as gitti etc. were also taxable under the said Act. The Supreme Court while deciding the matter observed "where commercial goods without change of their identity as such goods are merely subjected to some processing or finishing, they may remain commercially the same goods which cannot be taxed again, in a series of sales so long as they retain their identity as goods of a particular type." In this regard it drew support from an earlier decision in the case of State of Tamil Nadu v. M/s Pyare Lal Mehrotra & ors., (1976) 1 SCC 834. In the case of Dy. Commissioner of Sales Tax v. M/s Pio Food Packers, 1980 Supp. SCC 174 the Supreme Court in ....
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....anufacture. Every change may be the result of treatment, labour and manipulation i.e. processing, but something more is necessary i.e. a new and different article must emerge "having a distinctive name, character or use". It was held that at some point of time processing and manufacture will merge, but where the commodity retains a continuing substantial identity through the processing stage it could not be said that it had been "manufactured". Based on the aforesaid the Supreme Court opined that pineapple slice was not entirely different from original product i.e. pineapple itself and there was no process of manufacture involved. In the case of State of Maharashtra v. Mahalaxmi Stores, (2003) 1 SCC 70, the Supreme Court had the occasion to consider the definition of the term 'manufacture' as contained in Section 2(17) of the Bombay Sales Tax Act 1959 which is similar to the one contained in Section 2(e)(1) of the Trade Tax Act 1948, and also essentially similar to the definition contained in Section 2(f) of the Act of 2008, except for the use of the words 'mixing and blending' in the latter provision as has already been noticed in the earlier part of this judgme....