STATE OF MAHARASHTRAversusMAHALAXMI STORES

A                          STATE OF MAHARASHTRA
                                     v.
                             MAHALAXMI STORES

                              NOVEMBER, 20, 2002

B     [SYED SHAH MOHAMMED QUADRI AND ARIJIT PASA YAT, JJ.]


            Bombay Sales Tax Act, 1959:

            S.2(17)- 'Manufacture '-Stone boulders-Crushed into 'gitti '-
C Assessee 's contention that converting boulders into gitti does not involve any
    manufacturing process accepted by Tribunal-On reference, High Court
    holding that conversion of boulders into 'gitti' did not amount to
    manufacture '-Held, there is no illegality in the judgment of the High Court.   )-



D           Commissioner of Sales Tax, Uttar Pradesh v. Lal Kunwa Stone (P.)
    Ltd, [2000) 3 sec 525, relied on.

         Kher Stone Crusher v. General Manager, District Industries Centre,
    Jabalpur and Anr., (79, S.T.C. 149), overruled.

E         Deputy Commissioner of Sales Tax, v. Pio Food Packers, (46 S.T.C.
    63); Chowgule & Co. Pvt. Ltd and Anr. v. Union of India and Ors., 47
    S.T.C. 124 and Sterling Foods v. State of Karnataka and Ors., (63 S.T.C.
    239), referred to.

            CIVIL APPELLATE JURISDICTION : Civil Appeal No. 9157 of
F   1995.

         From the Judgment and Order dated 22.2.1995 of the Mumbai High
    Court in S.T.R.C. No. I of 1995.

            Arun Pednekar, S.S. Shinde and V.N. Raghupathy for the Appellant.
G           The following Order of the Court was delivered :

         This appeal arises from the judgement of a Division Bench of the High
    Court at Bombay passed in Sales Tax Reference No. I of 1995 dated 22nd
    February, 1995.
H                                         292
                        STATE v. MAHALAXMISTORES                           293
      The Maharashtra Sales Tax Tribunal referred the following question          A
Under Section 61(1) of the Bombay Sales Tax Act, 1959 (for short, 'the
Act') to the High Court:

         "Whether on the facts and circumstances of the case and on a true
         and correct interpretation of the provision of Section 2(17) of the
         Bombay Sales Tax Act, was the Tribunal justified in holding that         B
         crushing of boulders resulting in metal of different sizes ordinarily
         Known as 'Gitti' does not amount to manufacture?''

        The facts, insofar as they are relevant for our purpose are as follows:

       The assessee purchases big sized stones-boulders from registered dealers C
and crushes them into small sizes, Known as 'Gitti'. It approached the
Commissioner of Sales Tax for determination of the question whether
converting bigger size boulders into 'gitti' would amount to n1anufacture.
The Deputy Commissioner held that the process of conversion amounts to
'manufacture' within the meaning of Section 2(17) of the Act. Against the D
order of the Deputy Commissioner, the assessee went in appeal before the
Maharashtra Sales Tax Tribunal. The contention of the assessee that converting
boulders into 'gitti' does not involve any manufacturing process within the
meaning of the Act, was accepted by the Tribunal. From that order, the afore-
mentioned question was referred to the High Court at Bombay. Following the
judgements of this Court in Deputy Commissioner of Sales Tax v. Pio Food E
 Packers, (46 S.T.C. 63). Chowgule & Co. Pvt. Ltd and Anr. v. Union of
 India and Ors., (47 S.T.C. 124) and Sterling Foods v. State of Karna/aka
and Ors., (63 S.T.C. 239), the High Court held that the conversion of boulders
 into.'gitti' did not amount to manufacture'. It is this view of the High Court
 that is assailed in this appeal by the Revenue.
                                                                                  F
        Section 2( 17) of the Act defines the term 'manufacture' and it reads
thus:

          "Manufacture with all the grammatical vanauons and cognate
          expressions means producing, making, extracting, alternating
          ornamenting, finishing or otherwise processing, treating or adapting    G
          any goods but does not include such manufacture or manufacturing
          processes as may be prescribed."

      From a perusal of the definition, extracted above, it is clear that the
processes of producing, making, extracting, alternating ornamenting, finishing    H
    294                      SUPREME COURT REPORTS [2002] SUPP. 4 S.C.R.

A or otherwise processing, treating or adapting of any goods fall within the
    meaning of the term 'manufacture'. But it may be pointed out that every
    type of variation of the goods or finishing of goods would not amount to
    manufacture unless it results in emergence of new commercial commodity.
    In the instant case, the very nature of the activity does not result in manufacture
B   because no new commercial commodity comes into existence.

          This Court in Commissioner of Sales Tax, Uttar Pradesh v. Lal Kunwa
    Stone Crusher (P.) ltd., [2000] 3 SCC 525, on an identical question, expressed
    the view that when stone boulders were crushed into stone chips, gitti and
    stone ballast, the process could not be termed as 'manufacture'. That case
C   arose under the Uttar Pradesh Sales Tax Act, 1948 (for short, 'the Act'). The
    definition of manufacture' in Section 2{e-l) of the U.P. Act appears to be
    similar to the definition under consideration.

           In view of the judgement of this Court in Lal Kunwa Stone Crusher
    (P.) Ltd. (supra), with which we are in respectful agreement, we find no
D   illegality in the impugned judgment of the High Cou1t. In the view that we
    have taken, the judgment of the High Court of Madhya Pradesh in Kher
    Stone Crusher v. General Manager, District Industries Centre, Jabalpur and
    Anr., (79 S. T.C. 149) cannot be treated as good law.

           The Civil appeal is, therefore, dismissed.
E
           No costs.

    R.P.                                                           Appeal dismissed.