RAJESH BALIA, J. - (1.) HEARD learned counsel for the parties. The short question raised in this case is whether the process applied by the respondent-dealer to produce gypsum powder at the quarry site can be considered to be an activity of manufacture so that he can avail the benefit of concessional rate of tax on the purchases made by him under section 5-C of the Rajasthan Sales Tax Act, 1954. It is the case of the dealer that he purchased gypsum from quarry owner by giving a declaration under section 5-C to the effect that gypsum will be used as raw material for manufacturing another commodity and thereafter he prepares powder thereof of different gradation, through the process of dehydration, the end-product is sold to the fertilisers and to the other industries. He also claims that he manufactures plaster of paris from the gypsum.
(2.) THE assessing officer found it to be a mere processing activity not amounting to manufacture because according to him the only process involved is grinding gypsum to powder for convenient marketing purposes but essentially the commodity in its raw-shape and powder-shape remains the same. THE assessee contended otherwise. THE Deputy Commissioner (Appeals) accepting the contention of the assessee has allowed the appeal and deleted the penalty levied in respect of the turnover in question. THE order has been affirmed by the Rajasthan Tax Board, vide its order under revision dated September 30, 1998. There is not much controversy between the parties that whenever gypsum is converted into fine powder after dehydrating the same by different grindings, it amounts to process of manufacture as the plaster and gypsum are qualitatively different commodities, if tested on the touch stone of functional utility. It was pointed out by referring to description in Encyclopaedia Britannica that gypsum has been described as a common sulfate mineral of great commercial importance, hydrated calcium sulfate Caso4 2h2o. Whereas plaster though sometime is used as synonym of gypsum has been described as white cementing material made by partial or complete dehydration of gypsum, commonly with special retarders or hardeners added when applied in a plastic state (with water), it sets and hardens by chemical recombination of the gypsum with water. For specially hard finish plaster, the gypsum is completely dehydrated at high temperature, and such chemicals as alkali sulfate, alum, or borax are added. The plaster of paris has been explained as quick-setting gypsum plaster consisting of a fine, white powder, calcium sulfate hemihydrate, or semihydrate Caso4 1/2h2o, which hardens when moistened and allowed to dry. Plaster of paris is prepared by heating calcium sulfate dihydrate. With an additive to retard the set, it is called wall, or hard wall, plaster. These explanations disclose that when gypsum in natural state, by dehydration, partial or completely, it changes its character and also in its functional utility. The gypsum in the crude form is used as a fluxing agent, fertilizer, filler in paper and textiles, and retarder in portland cement. As discussed above when it is partially or completely dehydrated it is a changed commodity usable for different purposes than it can be used simply in crude form. The principle is well-settled. In the context of sales tax laws, ordinarily when by application of some process, manually or mechanically, the commodity with different functional utility comes into existence and in the commercial parlance known distinctly by those who usually deal in it, and is treated to be different, such process has to be considered as a process of manufacture. Reference in this connection may be made in the matter of Commercial Taxes Officer v. Prakash Udyog, Sales Tax Revision No. 701 of 1999 decided on January 13, 2000 ([2002] 126 STC 372 (Raj) ). As a result in the facts and circumstances considering the finding recorded by the appellate authority in respect of process employed by the petitioner and the end-product brought into existence by the petitioner is of distinct functional utility and distinct identity were right in holding the process in question to be a process of manufacture. Consequently the assessee could not be subjected to levy of difference in tax and penalty in respect thereof. Accordingly this revision fails and is hereby dismissed. Petition dismissed. . ;