Madhya Pradesh High Court
Shree Balaji Mineral Grinding ... vs State Of Madhya Pradesh And Ors. on 13 July, 1999
ORDER A.K. Gohil, J.
1. This is a petition under Article 226 of the Constitution of India. The petitioner is a registered firm carrying business of mining marble stone at Gram Kund Tehsil, Alirajpur District, Jhabua and the petitioner is also carrying on business of marble powder at Pratapganj Marg, Khandwa Baroda Road, Jhabua. The process involved in the said manufacturing activity is as under :
"The marble stones are fed into crushing machine for crushing. Now boulders are crushed into small pieces in the crusher and transferred to hopper of the grinding mill through conveyer belts. From here again the pieces are transferred to grinder which grinds them to required meshes and powder is transferred to filter plant through pipe lines and cyclonic fans and then it is bagged and packed."
2. In this petition the petitioner is challenging the order by which the respondent has refused to grant eligibility certificate for exemption from entry tax and sales tax both on the ground that the industry is not involved in the manufacturing process and is not a manufacturing industry.
3. The main question for decision in this case is whether the petitioner is entitled to eligibility certificate for availing the sales tax exemption and whether its activities of manufacture of marble powder after crushing the marble stones comes with the definition of "manufacture" under Section 2(j) of the M.P. General Sales Tax Act, 1958. The definition of the word "manufacture" is given in Section 2(j) of the M.P. General Sales Tax Act, 1958 which reads as under :
"2. Definitions.--In this Act, unless there is anything repugnant in the subject or context,--
(a) to (i)................
(j) 'manufacture' includes any process or manner of producing, collecting, extracting, preparing or making any goods and in respect of trees which have been severed from the land or which have been felled, also the process of lopping the branches, cutting the trunks or converting them into logs, poles or bailies or any other articles of wood, but does not include such manufactures or manufacturing processes (as may be notified)."
4. The submission of the learned counsel for the petitioner is that the crushing of marble stones and converting it into powder is a manufacturing process and clearly comes under the definition of "manufacture" as defined under Section 2(j) of the Act and, therefore, the petitioner is entitled for grant of eligibility certificate and also for exemption.
5. In reply, submission of learned counsel for the respondent is that in view of the decision rendered in the case of Bheraghat Mineral Industries v. Divisional Deputy Commissioner of Sales Tax [1990] 79 STC 156 (MP) [App] ; (1987) 20 VKN 290 in which the division Bench of this Court was pleased to hold that :
"converting dolomite into chips and powder which will not mean 'manufacture' within the meaning of Section 2(j) of the Act and the return of the respondent is also based on the analogy given in this particular case."
6. The submission of the learned counsel for the petitioner is that the decision rendered in the case of Bheraghat Mineral Industries [1990] 79 STC 156 (MP) [App]; (1987) 20 VKN 290 was cited before the Full Bench of this Court in the case of Kher Stone Crusher, Jabalpur v. General Manager, District Industries Centre, Jabalpur [1990] 79 STC 149 and the Full Bench of this Court was pleased to distinguish on facts the aforesaid decision of the division Bench on the ground that a definite manufacturing process was under consideration in that case, The division Bench in that case of Bheraghat Mineral Industries [1990] 79 STC 156 (MP) [App]; (1987) 20 VKN 290 has held that the preparation of chips and powder from dolomite stones is not "manufacture" because no new commercial activity from dolomite comes into existence. However, in the case of G.R, Kulkarni v. State [1957] 8 STC 294 division Bench of this Court held that :
"The breaking of boulders into metal gitti is 'manufacture' within the meaning of M.P. Sales Tax Act. The act of manufacturing is changing of one object into another for the purposes of making it marketable."
For this purpose, the division Bench had relied on another division Bench decision of this Court in State of Madhya Pradesh v. Wasudeo [1955] 6 STC 30 wherein it has been held that :
"Fashioning of timber into logs for the purpose of sale is 'manufacture'."
This decision was dissented from by another division Bench in Mohanlal Vishram v. Commissioner of Sales Tax [1969] 24 STC 101 (MP) thereby felling standing timber trees cutting them and converting some of them into ballis did not alter their character as timber or using them for the manufacture of other goods within the meaning of Section 8(1) of the Act. The Full Bench of this Court in Kher Stone Crusher v. General Manager, District Industries Centre [1990] 79 STC 149 in para 12 held that :
"In view of the discussion aforesaid and relying on the decision in the case of G.R. Kulkarni [1957] 8 STC 294 (MP), the petition succeeds and is hereby allowed."
Recently the Supreme Court in the case of Ashirwad Ispat Udyog v. State Level Committee [1999] 112 STC 207 has held that :
"In the special definition of 'manufacture' given in Section 2(j) of the M.P. General Sales Tax Act, 1958 '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 not result in 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 of lopping the branch of trees, cutting the trunk. The lopping of branches and cutting of trunks of trees also, self evidently, does not produce the new article. The clear words of the definition, therefore, must be given due weight and cannot be overlooked merely because in other contexts the word 'manufacture' has been judicially held to refer to the process of manufacture of new articles and it has been further held that the trading of iron and steel scrap by cutting it down by mechanical process into pieces there may be conventionally utilised in rolling mills and foundries such treatment makes saleable goods would in our opinion fall within the wide definition of 'manufacture' under Section 2(j) of the said Act."
7. In an another case of Indian Poultry v. Sales Tax Officer, Rajnandgaon [1999] 113 STC 507 relying on the case of Ashirwad Ispat Udyog [1999] 112 STC 207 the Supreme Court has further held that, the definition of word "manufacture" under the M.P. General Sales Tax Act is very wide in terms and the narrow meaning of the word "manufacture" was not to be applied under the Act :
".............the rearing of the chicks until they become marketable broilers is 'manufacture' within the definition of that word in the said Act. Our attention was drawn by learned counsel for the respondents to the definition of word 'rear' in Webster's Dictionary. it is defined to mean 'to breed and raise an animal for use or market'. The definition of 'manufacture' under Section 2(j) includes any manner of preparing goods. The preparing of any goods for the market is, therefore, for the purposes of this artificial definition, a process of manufacture."
8. In view of the aforesaid decisions of the apex Court, it is clear that the making of marble powder by manufacturing process is an activity covered within the special definition of "manufacture" given in Section 2(j) of the M.P. General Sales Tax Act, 1958 and, therefore, the opinion of respondent in impugned order is not correct and is set aside.
9. In the result, the petition is allowed. Impugned order is quashed and the respondent is directed to grant eligibility certificate to the petitioner for grant of exemption from entry tax and sales tax for which he is entitled in accordance with law. Security deposit, if any be refunded after verification. No order as to costs.