STATE OF MAHARASHTRA versus MAHALAXMI STORES

Citation: [2002] SUPP. 4 S.C.R. 292 · Decided: 20-11-2002 · Supreme Court of India · Bench: S.S.M. QUADRI, ARIJIT PASAYAT · Disposal: Dismissed

Judgment (excerpt)

A 
STATE OF MAHARASHTRA 
v. 
MAHALAXMI STORES 
NOVEMBER, 20, 2002 
B 
[SYED SHAH MOHAMMED QUADRI AND ARIJIT PASA Y AT, JJ.] 
Bombay Sales Tax Act, 1959: 
S.2(17)- 'Manufacture '-Stone boulders-Crushed into 'gitti '-
C Assessee 's contention that converting boulders into gitti does not involve any 
manufacturing process accepted by Tribunal-On reference, High Court 
holding that conversion of boulders into 'gitti' did not amount to 
manufacture '-Held, there is no illegality in the judgment of the High Court. 
D 
Commissioner of Sales Tax, Uttar Pradesh v. Lal Kunwa Stone (P.) 
Ltd, [2000) 3 sec 525, relied on. 
Kher Stone Crusher v. General Manager, District Industries Centre, 
Jabalpur and Anr., (79, S.T.C. 149), overruled. 
E 
Deputy Commissioner of Sales Tax, v. Pio Food Packers, (46 S.T.C. 
63); Chowgule & Co. Pvt. Ltd and Anr. v. Union of India and Ors., 47 
S.T.C. 124 and Sterling Foods v. State of Karnataka and Ors., (63 S.T.C. 
239), referred to. 
CIVIL APPELLATE JURISDICTION : Civil Appeal No. 9157 of 
F 
1995. 
G 
H 
From the Judgment and Order dated 22.2.1995 of the Mumbai High 
Court in S.T.R.C. No. I of 1995. 
Arun Pednekar, S.S. Shinde and V.N. Raghupathy for the Appellant. 
The following Order of the Court was delivered : 
This appeal arises from the judgement of a Division Bench of the High 
Court at Bombay passed in Sales Tax Reference No. I of 1995 dated 22nd 
February, 1995. 
292 
)-
STATE v. MAHALAXMISTORES 
293 
The Maharashtra Sales Tax Tribunal referred the following question A 
Under Section 61(1) of the Bombay Sales Tax Act, 1959 (for short, 'the 
Act') to the High Court: 
"Whether on the facts and circumstances of the case and on a true 
and correct interpretation of the provision of Section 2(17) of the 
Bombay Sales Tax Act, was the Tribunal justified in holding that B 
crushing of boulders resulting in metal of different sizes ordinarily 
Known as 'Gitti' does not amount to manufacture?'' 
The facts, insofar as they are relevant for our purpose are as follows: 
The assessee purchases big sized stones-boulders from registered dealers C 
and crushes them into small sizes, Known as 'Gitti'. It approached the 
Commissioner of Sales Tax for determination of the question whether 
converting bigger size boulders into 'gitti' would amount to n1anufacture. 
The Deputy Commissioner held that the process of conversion amounts to 
'manufacture' within the meaning of Section 2(17) of the Act. Against the D 
order of the Deputy Commissioner, the assessee went in appeal before the 
Maharashtra Sales Tax Tribunal. The contention of the assessee that converting 
boulders into 'gitti' does not involve any manufacturing process within the 
meaning of the Act, was accepted by the Tribunal. From that order, the afore-
mentioned question was referred to the High Court at Bombay. Following the 
judgements of this Court in Deputy Commissioner of Sales Tax v. Pio Food E 
Packers, (46 S.T.C. 63). Chowgule & Co. Pvt. Ltd and Anr. v. Union of 
India and Ors., (47 S.T.C. 124) and Sterling Foods v. State of Karna/aka 
and Ors., (63 S.T.C. 239), the High Court held that the conversion of boulders 
into.'gitti' did not amount to manufacture'. It is this view of the High Court 
that is assailed in this appeal by the Revenue. 
F 
thus: 
Section 2( 17) of the Act defines the term 'manufacture' and it reads 
"Manufacture with all the grammatical vanauons and cognate 
expressions means producing, making, extracting, alternating 
ornamenting, finishing or otherwise processing, treating or adapting G 
any goods but does not include such manufacture or manufacturing 
processes as may be prescribed." 
From a perusal of the definition, extracted above, it is clear that the 
processes of producing, making, extracting, alternating ornamenting, finishing H 
294 
SUPREME COURT REPORTS [2002] SUPP. 4 S.C.R. 
A or otherwise processing, treating or adapting of any goods fall within the 
meaning of the term 'manufacture'. But it may be pointed out that every 
type of variation of the goods or finishing of goods would not amount to 
manufacture unless it results in emergence of new commercial commodity. 
In the instant case, the very nature of the activity does not result in manufacture 
B because no new commercial commodity comes into existence. 
This Court in Commissioner of Sales Tax, Uttar Pradesh v. Lal Kunwa 
Stone Crusher (P.) ltd., [2000] 3 SCC 525, on an identical question, expressed 
the view that when stone boulders were crushe

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