ASHIRWAD ISPAT UDYOG AND ORS. versus STATE LEVEL COMMITTEE AND ORS.

Citation: [1998] SUPP. 2 S.C.R. 542 · Decided: 03-11-1998 · Supreme Court of India · Bench: S.P. BHARUCHA · Disposal: Appeal(s) allowed

Judgment (excerpt)

A 
ASHIRWAD ISPAT UDYOG AND ORS. 
\I. 
STATE LEVEL COMMITTEE AND ORS. 
NOVEMBER 3, 1998 
B 
[S.P. BHARUCHA AND S. RAJENDRA BABU, JJ.] 
SALES TAX: 
MP. General Sales Tax Act: Section 2(j). 
C 
"Manufacture"-Meaning-Construing of-Iron and steel scrap-
Processing of-Held: Meaning of an expression construed with reference to 
one statute does not apply to other statutes unless the definition of the expression 
is similar-The plain construction of the definition in the statute must prevail-
Hence, iron and steel scrap processing is manufacture-Interpretation of 
D Statutes. 
Words and Phrases: 
"Manufacture"-Meaning of-In the context ofS.2(j) of the MP. General 
Sales Tax Act. 
E 
The appellant purchased iron and steel scrap from a steel plant and 
cut down the scrap for being utilised by rolling mills and other 
manufacturers. The appellant obtained eligibility certificate from the 
respondent for exemption of tax under a Government notification issued 
under Section 12 of the M.P. General Sales Tax Act. Subsequently, the said 
eligibility certificate was cancelled on the ground that the iron and steel scrap 
F processing was not "manufacture" within the special definition of that word 
under Section 2(j) of the Act. The appellant filed a writ petition before the 
High Court challenging the aforesaid cancellation of the eligibility 
certificate, which was dismissed. Hence this appeal. 
G 
H 
Allowing the appeal, this Court 
HELD: 1.1. The meaning of an expression construed with reference 
to one statute does not apply to other statutes unless the definition of the 
expression is similar. The clear words of the definition, therefore, must be 
given due weight and cannot be overlooked merely because in other co11texts 
the word "manufacture" has been judicially held to refer to the pro<:ess of 
542 
•. 
ASHIRWAD ISPAT UDYOG v. STA TE LEVEL COMMITTEE [S.P. BHARUCHA, J.J 543 
manufacture of new articles. The plain construction of a special definition A 
of a word in a particular Act must prevail. (546-C) 
1.2. In the special definition given in Section 2(j) of the M.P. Generul 
Sales Tax Act, the Word 'manufacture' has been defined as including a 
process or manner of producing, collecting, extracting, preparing or making 
any goods. There can be no doubt whatsoever that "collecting" goods does B 
not result in the production of a new article. There is, therefore, inherent 
evidence in the definition itself that the narrow meaning of the word 
"manufacture" was not intended to be applied in the said Act. Again, the 
definition speaks of"the process oflopping the branches (of trees), cutting 
the trunks". The lopping of branches and the cutting of trunks of trees also, C 
self~vidently, does not produce a new article. [546-D-F) 
1.3. The appellants treat iron and steel scrap of considerable bulk 
cutting it down by mechanical processes into pieces that may be conveniently 
utilised in rolling mills and foundries. Such treatment making saleable goods 
would fall within the wide definition of "manufacture" under Section 2(j) D 
of the Act. [546-G) 
CIVIL APPELLATE JURISDICTION: Civil Appeal Nos. 12518-
12520 of 1996 Etc. Etc. 
From the Judgment and Order dated 13.5.96 of the Madhya Pradesh 
High Court in M.P. Nos. 1333, 1430 and 2200 of 1991. 
E 
K.K. Venugopal, B.Sen, Joseph Vellapally, S.K. Gambhir, Prakash 
Srivastava, Lalit Ahluwalia, Praveen Kumar, Tarun Gulati, Vivek Gambhir, 
U.U. Lalit, K.K. Gupta, S.K. Agnihotri, Mrs. Madhur Dadlani and Ms. F 
Kamakshi Mehlwal for the appearing parties. 
The Judgment of the Court was delivered by 
BHARUCHA, J. The principal judgment and order under appeal and G 
the orders following it, also under appeal, were passed by a Division Bench 
of the High Court of Madhya Pradesh on writ petitions filed by the appellants. 
Very briefly stated, the facts are these : The appellants purchase iron 
and steel scrap from the Bhilai Steel Plant and other parties. The scrap, in the 
form of defective angles, channels, tubes and coils is of very considerable H 
544 
SUPREME COURT REPORTS [1998] SUPP. 2 S.C.R. 
A size. The appellants cut down the scrap so that it may be utilised by rolling 
mills and forging parts manufacturers, gear and pinion manufactures and dye 
block manufactures. The question is whether such cutting down, with the 
help of shearing machines and glass cutting, of the scrap of widths of 2' to 
5' and thickness upto 2.5" into strips of the size of 2" to 4" is a process of 
B "manufa

Excerpt shown. Read the full judgment & AI analysis in Lexace.