ORIENT PAPER AND INDUSTRIES LTD. versus THE STATE OF M.P. AND ORS.

Citation: [2006] SUPP. 8 S.C.R. 790 · Decided: 09-11-2006 · Supreme Court of India · Bench: ARIJIT PASAYAT · Disposal: Appeal(s) allowed

Judgment (excerpt)

A 
B 
ORIENT PAPER AND INDUSTRIES LTD. 
v. 
THE STATE OF M.P. AND ORS. 
NOVEMBER 9, 2006 
[ARUITPASAYAT ANDS.H.KAPADIA,JJ.] 
Agricultural Produce Market Committee-MP. Krishi Upaj Mandi 
Adhiniyam, 1972-Sections 19 & 2(mmm)-Bamboo, a notified agricultural 
C produce within meaning of the Adhiniyam-Brought into market area-Levy 
of market fee by Market Committee-Validity of-Held, not valid, since 
bamboo was not used for processing-ft was used as raw material in 
manufacturing paper. 
Words and Phrases-"Manufacture and processing"-Distinction 
D between-Discussed 
Interpretation of Statutes-Plain construction-When the words of a 
statute are clear, plain or unambiguous, Courts are bound to give effect to 
that meaning irrespective of consequences. 
E 
Appellant is a Public Limited Company having a Paper Mill. It uses 
bamboos, wood dyes, starch rosin, talcum and several chemicals as raw 
material for production of paper. The manufacturing process consists of 
crushing bamboos and wood pieces into pulp to which chemicals are added at 
a subsequent stage. 
F 
Appellant brought bamboo, a notified agricultural produce within 
meaning of the M.P. Krishi Upaj Mandi Adhiniyam, 1972, inside the market 
area on which the Market Committee in exercise of power under the Adhiniyam 
(Act) demanded market fee from Appellant on the ground that it brought the 
bamboo for purpose of processing. Appellant i10wever submitted that the 
notified agricultural produce i.e. bamboo brought inside the market area is 
G not used for the purpose of processing, and the end-user is manufacturer, 
hence the Market Committee was not authorized to levy market fee. 
H 
The question which arose for consideration in the present appeal is 
whether Appellant is liable to pay any market fee to the Market Committee 
790 
.... 
,•· 
ORIENT PAPER AND INDUSTRIES LTD. v. STATE OF M.P. 
791 
under the said Adhiniyam (Act). 
A 
Allowing the appeal, the Court 
HELD: 1.1. By manufacture something is produced and brought into 
existence which is different from that out of which it is made in the sense 
that the thing produced is by itself a commercial commodity capable of being B 
sold or supplied. The material from which the thing or product is manufactured 
may necessarily lose its identity or may become transformed into the basic 
or essential properties. (798-G-H] 
1.2. Manufacture implies a change but every change is not manufacture, 
yet every change of an article is the result of treatment, labour and C 
manipulation. Naturally, manufacture is the end result of one or more 
processes through which the original commodities are made to pass. The 
nature and extent of processing may vary from one class to another. There 
may be several stages of processing, a different kind of processing at each 
stage. With each process suffered the original commodity experiences a D 
change. Whenever a commodity undergoes a change as a result of some 
operation performed on it or in regard to it, such operation would amount to 
processing of the commodity; but it is only when the change or a series of 
changes takes the commodity to the point where commercially it can no longer 
be regarded as the original commodit} but instead is recognized as a new and 
distinct article that a manufacture can be said to take place. Process in E 
manufacture or in relation to manufacture implies not only the production 
but also various stages through which the raw material is subjected to change 
by different operations. It is the cumulative effect of the various processes to 
which the raw material is subjected to that the manufactured product emerges. 
Therefore, each step towards such production would be a process in relation F 
to the manufacture. Where any particular process is so integrally connected 
with the ultimate production of goods that but for that, process processing of 
goods would be impossible or commercially inexpedient, that process is one 
in relation to the manufacture. (799-A-E( 
1.3. 'Manufacture' is a transformation of an article, which is G 
commercially different from the one, which is converted. The essence of 
manufacture is the change of one object to another for the purpose of making 
it marketable. The essential point thus is that in manufacture something is 
brought into existence, which is different from that, which originally existed 
in the sense that the thing produced is by itself a commercially different 
H 
792 
SUPREME COURT REPORTS [2006] SUPP. 8 S.C.

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