JAIN, J. - (1.) THIS revision u/s. 15 (2) of the Rajasthan Sales Tax Act against the judgment of learned Sales Tax Tribunal, Ajmer dated 4. 7. 1986 in Sales tax special appeal No. 85/82.
(2.) BRIEF facts of the case are that the non-petitioner M/s. Chhogalal Akodia is a registered dealer deading in 'mica' cutting who is now being represented by his L. Rs. The assessee for the assessment year 1972-73 for the period 1. 1. 72 to 31. 12. 72 filed return. The assessee had purchased certain'mica' for the purpose of resale on the strength of declaration in form ST-17. Some 'mica' was sold after cutting its edges and dressing the 'mica' blocks. The assessing authority treating this process as a process of manufacture of 'mica' and charged tax @ 1% on 'mica' purchased by the assessee. The assessee filed an appeal before the Dy. Commissioner (Appeals) which was partly allowed on 1. 3. 1977. Being aggrieved by the order of Dy. Commissioner (Appeal), the Assessee has moved an appeal before the Board of Revenue for Rajasthan. The learned Single Member rejected the same on 28. 6. 82 treating 'mica' cutting as a process of manufacture. The assessee preferred a special appeal before the Division Bench and the same was allowed holding that cutting crude 'mica' is not a process of manufacture as it is not covered by section 2 (K) of the RST Act. Hence, the Department has preferred this revision, raising following questions of law : - 1. Whether the process of cutting of crude mica amounts to manufacture u/s. 2 (K) of the Rajasthan Sales Tax Act, 1954. 2. Whether Tribunal rightly set aside tax levied by lower authorities u/s. 5c read with section 5a of the Act? Mr. B. C. Mehta, learned counsel for the Revenue submits that process of cutting of crude 'mica' is manufacture process and placed reliance on C. T. O Pali S. M/s. Umed Sizing Factory (1) along with the connected matters and Ujagar Prints vs. UOI (2 ). On the other hand Mr. Vineet Kothari has not disputed the proposition of law of above cases but submitted that the process of cutting of edges and dressing of mica blocks does not amount to 'manufacture' and placed reliance on Dy. C. S. T. vs. Pio Food Packers (3), Sterling Food & Ors. vs. State of Karnataka (4), CST vs. Paper Process Works (5), School Boys Industry vs. CST (6), State of Orissa vs. Satyanarayan Ramshankar (7) and State of Orissa vs. Titaghurpaper Mills Co. Ltd. He has also placed reliance on order No. 465 of 1980 of the Govt. of India dt. 5. 5. 80 and the Notification dt. 3. 4. 1971 published in Raj. Gaz. 4 (ga) (I) dt. 1. 7. 71. In C. T. O. vs. M/s. Umed Sizing Factory (supra), it has been observed that in sizing the yarn materials like starch, gum and cellulose is required for sizing of the plain cotton yarn. In the registration certificate no mention has been made that what goods are going to form part of the manufacturing process of the sized yarn. It has also been observed that the items are used for processing of the yarn and the result is the sized yarn, therefore, there is no hesitation in saying that the assessee is entitled to the benefit u/s. 5c (1) of the Act. The learned Judge has also observed that in fact the department should insist that whoever wants to get the benefit of ST-17, the applicant must fill in all column of ST-3 and mention that what are the raw materials for manufacturing of the goods for sale on which the assessee wants to claim any benefit, if any. In Ujagar Prints vs. U. O. I. (supra) it has been held that the process of bleaching, mercerising, dyeing printing, water proofing, etc. , carried out by the processors on job work basis amount to manufacture both under the Act as it stood prior to the amendment as also under the Act subsequent to the amendment and the processed fabrics are liable to be assessed to excise duty in the hands of what may be called 'jobbers'. In this case the process of dyeing, processing and printing of cloths was considered by the Constitutional Bench reported in (1988) 27 STL 207 (SC) (9) has not answered the same, observing that indeed, on this point the Referring Bench did not disagree or have any reservations either.
(3.) IN Dy. CST vs. Pio Food Packers (supra) it has been observed that when pine-apple fruit is processed into pine-apple slices for the purposes of being sold in sealed cane there is no consumption of the original pine-apple fruit for the purpose of manufacture and the case does not fall within section 5a (1) (a) of the Kerala General Sales Tax Act, 1963. Although a degree of processing is involved in preparing pine-apple slices from the original fruit, the commodity continues to possess its original identity, notwithstanding the removal of inedible portions, the slicing and thereafter canning it on adding sugar to preserve it. It has also been observed that where there is no essential difference in identity between the original commodity and the processed article it is not possible to say that one commodity has been consumed in the manufacture of another. Although it has undergone a degree of processing, it must be regarded as still retaining its original identity. In sterling Food & Ors. vs. State of Karnataka (supra) it has been observed that when raw shrimps, prawns and lobsters are subjected to the process of cutting of heads and tails, peeling, deveining, cleaning and freezing, they do not cease to be shrimps, prawns and lobsters and become another distinct commodity. In CST vs. Paper Process Works (supra) it has been observed that Cl. (17) of s. 2 of the said Act gives an extensive definition of the term 'manufacture' so as to include within its scope even the processing or treating or adapting of any goods. R. 2 of the Bombay ST Rules, 1959 sets out the processes which are not included in 'manufactured. It would be sufficient to notice that the process of slitting larger reels of paper into smaller reels, such as was carried on by the assessee, has not been excluded from the definition of 'manufacture' under this rule. It has also been observed that in any event, it was for the revenue to establish before the Tribunal by leading sufficient evidence that reels of paper produced by the assessee were regarded as a different commercial commodity from the larger reels of paper purchased by them. In fact on the evidence before the Tribunal, the Tribunal has come to the conclusion that the two articles in question are commercially the same commodity. There is no warrant to interfere with that finding in this reference. ;