COMMISSIONER OF SALES TAX Vs. DAMODAR PADMANATH RAO

JUDGEMENT

(1.) The question referred is as follows :-

(2.) The short question, therefore, that falls for consideration in this case is - whether the activity of a person like the respondent, who is a pan-shop dealer and who runs a pan-shop, can be said to be included in the activity of manufacturing or processing goods. The Tribunal came to the conclusion that when the pan-shopkeeper prepares pan or vidas and sells them, he cannot be said to be either manufacturing or processing any goods. So far as the question whether in making vidas, it could be said that the respondent manufactured goods, it is not now the contention of the department that the respondent can be said to be engaged in the manufacturing of any goods, but it is contended that when a pan-shop dealer prepares vidas for sale, he is undoubtedly engaged in the processing of goods, because the process by which vida is prepared answers that activity which can be described as processing of goods. This contention has not found favour with the Tribunal. The Tribunal has observed that the word "process" has not been defined in the Bombay Sales Tax Act, 1953, and according to Webster's New International Dictionary, Second Edition (page 1972), "process" means "to subject to some special process or treatment; to subject to a process of manufacture, development, preparation for the market, etc. to convert into marketable form, as livestock by slaughtering, grain by milling, cotton by spinning, milk by pasteurizing, fruits and vegetables by sorting and repacking." As we shall presently point out this definition or meaning attributed to the word "process" apparently has not been correctly and fully reproduced in the judgment of the Tribunal. According to Webster's Third New International Dictionary, at page 1808, one of the meanings given to the word "process" as a verb is as follows : "To subject to a particular method, system, or technique of preparation, handling, or other treatment designed to effect a particular result : put through a special process :..........."

(3.) It is, thus, clear that one of the meanings that can be given to the word "process" is to subject to a particular method or technique or preparation, handling, or other treatment designed to effect a particular result. Now, what a pan-shop dealer does is to prepare an article like the vida or pan out of several articles. It was suggested that what he does is merely mixing of several articles though in a different form. We are unable to interpret what the respondent does as merely an act of mixing. Really what is done when pan or vida is prepared by a pan-shop dealer is that he takes one or two betel leaves and subjects them to a treatment, such as he chips off the ends, and also softens it by weeding out some portion, then he applies edible lime, spreads kattha, and then puts crushed or granulated betel-nuts and cardamom and other articles and to give it a flavour sprinkles some scented water or otherwise adds kopra and some other mixture in order to give it taste and flavour. Then all this is wound up in such a manner as to present it, sometimes in an attractive form, and things inside are kept intact by pressing a piece of clove. Thus, the article that is produced as a result of this process is neither betel leaves nor individual ingredients of the mixture, but an entirely different article. We, therefore, fail to see why all the materials that are used cannot be said to be subjected to a process or that the maker of the vida is not processing goods. If all these actions have to be done in order to produce the article in a saleable form, it must be held that the respondent is engaged in processing goods. Differing therefore from the Tribunal it must be held that even though the panpatti or vida-maker is not engaged in the manufacture of goods, he is undoubtedly engaged in the processing of goods, and as he is engaged in the processing of goods, it must be held that he is a dealer whose activity falls within the provisions of section 5(1)(b)(ii) of the Bombay Sales Tax Act, 1953.