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Commissioner of Sales Tax Vs. Alsbah Enterprises - Court Judgment

LegalCrystal Citation
SubjectSales Tax
CourtAllahabad High Court
Decided On
Case NumberSales Tax Revision No. 264 of 1978
Judge
Reported in[1980]45STC283(All)
AppellantCommissioner of Sales Tax
RespondentAlsbah Enterprises
Appellant AdvocateStanding Counsel
Respondent AdvocateR.V. Gupta, Adv.
DispositionPetition dismissed
Excerpt:
- - 2. after hearing the counsel for the parties, i am of the opinion that the view taken by the revising authority is perfectly correct and justified......the commissioner of sales tax, u.p., lucknow, is as to whether the assessee is a manufacturer of mutton tallow. the assessee purchases mutton tallow and what he does is that after purchasing mutton tallow from butchers and, after removing dust, bone-pieces, etc., therefrom, offers it for sale. according to the assessing authority, the assessee is a manufacturer of mutton tallow and on sales of the same was liable to be taxed as such. the appellate assistant commissioner (judicial), sales tax, took the same view but, in revision, the revising authority has taken a contrary view. according to the learned revising authority, the mere filtering of mutton tallow did not change or alter the commodity in any manner whatsoever and hence the assessee could not be regarded as a manufacturer of.....
Judgment:

R.R. Rastogi, J.

1. The short question that arises for decision in this revision filed by the Commissioner of Sales Tax, U.P., Lucknow, is as to whether the assessee is a manufacturer of mutton tallow. The assessee purchases mutton tallow and what he does is that after purchasing mutton tallow from butchers and, after removing dust, bone-pieces, etc., therefrom, offers it for sale. According to the assessing authority, the assessee is a manufacturer of mutton tallow and on sales of the same was liable to be taxed as such. The Appellate Assistant Commissioner (Judicial), Sales Tax, took the same view but, in revision, the revising authority has taken a contrary view. According to the learned revising authority, the mere filtering of mutton tallow did not change or alter the commodity in any manner whatsoever and hence the assessee could not be regarded as a manufacturer of mutton tallow within the meaning of Section 2(e-l) of the U.P. Sales Tax Act.

2. After hearing the counsel for the parties, I am of the opinion that the view taken by the revising authority is perfectly correct and justified. The definition of 'manufacture' as given in Section 2(e-1) of the Act, which has been inserted by U.P. Act No. 38 of 1975, with effect from 13th October, 1972, reads as under:

2. (e-1) 'Manufacture' means producing, making, mining, collecting, extracting, altering, ornamenting, finishing or otherwise processing, treating or adapting any goods; but d6es not include such manufacture or manufacturing processes as may be prescribed.

3. The word 'manufacture', as would appear from the above definition, has various shades of meaning and, as held by the Supreme Court in Commissioner of Sales Tax v. Harbilas Rai and Sons [1968] 21 S.T.C. 17 (S.C.), in the context of sales tax legislation, if the goods to which some labour is applied remain essentially the same commercial article, it cannot be said that the final product is the result of manufacture. In that case, the assessees, dealers in pig bristles, brought bristles plucked by kanjars from pigs, boiled them, washed them with soap and other chemicals, sorted them out according to their sizes and colours, tied them in different bundles of different sizes and despatched them to foreign country for sale. The view taken was that the sales made in foreign country were not taxable as bristles were not manufactured goods within the meaning of explanation II(ii) to Section 2(h) of the U.P. Sales Tax Act. It is correct that the definition of the expression 'manufacture' has now been given a wider import but when grinding of wheat into flour is not manufacture: vide U.P. Atta Chakki Vyavasai Sangh, Varanasi v. Krishi Utpadan Mandi Samiti, Varanasi 1976 U.P.T.C. 322, or where the mixing of scents in ordinary til oil purchased by a dealer has not been held to amount to manufacture of perfumed oil: vide Commissioner of Sales Tax v. Bechu Ram Kishorilal 1976 U.P.T.C. 253, it cannot be said with any justification that the sale of mutton tallow by the assessee after removing the dust and bone-pieces would amount to manufacture.

4. I, therefore, agree with the view taken by the revising authority and dismiss this revision with Rs. 200 as costs to the respondent-assessee.


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