STATE OF MAHARASHTRA THE CENTRAL PROVINCES MANGANESE ORE COMPANY LIMITED Vs. CENTRAL PROVINCES MANGANESE ORE CO LTD

JUDGEMENT

(1.) The eight appeals before us by special leave arise out of four Sales Tax References under Section 23 (1) of the Central Provinces and Berar Sales Tax Act, 1947, (hereinafter referred to as the Act). Six common questions arose here relating to assessments for different periods on identically similar facts stated below. Five of these were decided by a Division Bench of the Bombay High Court. As it answered the main question determining liability to pay the sales tax under the Act against the State, there are four appeals against it by the State. The sixth question, which was one of law only, was referred by the Division Bench to a Full Bench, and, this was determined in favour of the State. There are, therefore, four appeals by the assessee against the Full Bench decision.

(2.) M/s. Central Provinces Manganese Ore Co. Ltd., the assessee, has its Head Office in London. It carries on business on an extensive scale. It owns 22 manganese ore mines in Madhya Pradesh from where manganese ore, after being excavated, is sent mostly abroad through different ports. The Company is a registered dealer under the Act. It used to enter into contracts at places outside Madhya Pradesh for the despatch of what came to be known, in the special parlance of this company's business, as "Oriental Mixture". But, the contracts contain specifications only of strengths of manganese ore to be supplied with permissible percentages of other ingredients as admixtures. The term "Oriental Mixture" was evidently employed by the Company itself to describe a particular type of conglomerate which the unloading at one place of various types of manganese ore produced. The required average consistency or strength of manganese ore specified in the contracts, which did not contain a reference to any "Oriental Mixture", was said to be obtained in the course of this mechanical process of transportation when various grades of manganese ore were heaped together. These grades of manganese ore were transported, in railway wagons, from one or more mines, and, it appears that the order in which trucks were loaded in goods trains and unloaded was also so arranged that the mixture came into existence, as described above, in the mere process of unloading at the Port. But, this procedure did not seem to involve a process of "Manufacture", as that term is ordinarily understood, to which the assessee could be said to have subjected its manganese ore.

(3.) The case of the assessee company was that the "Oriental Mixture" as a taxable commodity came into existence only after the ores got mixed up in the process of unloading and not before so that it could not be taxed as "goods in existence" in Madhya Pradesh at the time when contracts relating to these goods were made. This is the crucial and simple question, largely one of fact which resulted in considerable argument before the High Court and before us also. Other questions appear to be subsidiary. Nevertheless, we have to consider them before coming to the crucial question which is:Is the process described above one of "manufacture" so that a new kind of goods, known as "Oriental Mixture" came into existence at the port where manganese ore trucks were unloaded