JUDGMENT
Mishra, J.
1. This case has to be disposed of with a mere reiteration of the order of the Sales Tax Appellate Tribunal (Main Bench), Madras – 1.
2. A question arose whether the blue metal jelly obtained by conversion of the bigger stone boulders into smaller stones of varying sizes would be subjected to purchase tax under section 7A of the Tamil Nadu General Sales Tax Act or not. The assessee-respondent was subjected to such a tax, on a reading in section 7A of the Act that the process under which the bigger stone boulders were converted into smaller stones of varying sizes and blue metal jelly thus obtained was manufacture using stones for the creation and preparation of blue metal jelly. Recounting of the entire ordeal of the assessee of going through every stage of the legal proceeding until the appeal before the Tribunal is not necessary. The Tribunal, however, had in a short, but effective, order held that the process of converting the bigger stone boulders into smaller stones of varying sizes is not a manufacture through which blue metal jelly is obtained. The Tribunal has referred to a decision in Deputy Commissioner of Sales Tax (Law), Board of Revenue (Taxes) v. Pio Food Packers [1978] 41 STC 364 (Ker) and other authorities on the subject. Corpus Juris Secundum, volume 55, at page 685, explained the term “manufacture” thus :
“In determining whether an activity is or is not a manufacture, or whether a process or operation is or is not manufacturing, one of the important factors is the extent of the change that has been effected in the original material, since, while every change in an article is the result of treatment, labour and manipulation, every change is not manufacture; something more is necessary, and the application of labour must be carried out to such an extent that the article suffers a species of transformation and a new and different article emerges. This characteristic has been the subject of considerable discussion and the courts have experienced some difficulty in determining what constitutes a new and different article.”
Ismail, C.J. and M. A. Sathar Sayeed, J.
3. Were faced with a similar contention in State of Tamil Nadu v. Subbaraj and Co. [1981] 47 STC 30 (Mad.) where the assessee bought raw bones and converted them into crushed bones by a process of braking the bones in a disintegrator into pieces of 3/8″ and 5/8″ bones, and obtained in that process bone grist, bone-meal, fluff horns and hoof, which were sold locally. The Tribunal in that case held that the case did not attract section 7-A(1)(a) of the Act. This Court affirmed the Tribunal’s view saying that with regard to the purchase of the raw bones and the end-products which were sold locally, the Tribunal was right in holding that section 7-A(1)(a) of the Act was not attracted, as there had been no consumption of the goods purchased in the manufacture of other goods.
Section 7-A(1)(a) of the Act uses the words :
“7-A(1). Every dealer who in the course of his business purchases from a registered dealer or from any other person, any goods (the sale or purchase of which is liable to tax under this Act) in circumstances in which no tax is payable under section 3, 4 or 5, as the case may be, and either,
(a) consumes such goods in the manufacture of other goods for sale or otherwise; or
…………….
shall pay tax on the turnover relating to the purchase aforesaid at the rate mentioned in section 3, 4 or 5, as the case may be, whatever be the quantum of such turnover in a year :
Provided that a dealer (other than a casual trader or agent of a non-resident dealer) purchasing goods the sale of which is liable to tax under sub-section (1) of section 3 shall not be liable to pay tax under this sub-section, if his total turnover for a year is less than one lakh rupees.”
It is not the case of the State that there was any sale of the blue metal jelly to any person beyond the State or any despatch outside the State. We are of the opinion that the Tribunal has correctly understood the law and rightly held that all the ingredients of section 7-A are not satisfied in the case of blue metal jelly obtained in the process of crushing of stone boulders and conversion into smaller stones of varying sizes. There is no merit in this tax case. It is accordingly dismissed. There will be no order as to costs.
4. Petition dismissed.
