PYARE LAL KHUSHWANT RAI Vs. STATE OF PUNJAB

JUDGEMENT

(1.) THIS judgment, of ours would dispose of Sales Tax References Nos. 40 and 41 of 1971, which relate to the same firm, that is, Messrs. Pyare Lal Khushwant Rai (hereinafter referred to as the assessee-firm ). The references relate to the assessment years 1959-60 and 1960-61. The assessee-firm is an unregistered dealer in firewood. It was held liable to pay sales tax by the Assessing Authority and the order of the Assessing Authority was upheld though with a little modification by the highest revisional authority. An application was made under Section 22 (1) of the Punjab General Sales Tax Act, 1948 (hereinafter referred to as the Act) for referring certain questions of law arising out of the order of the Financial Commissioner (Taxation), Punjab, but the same was dismissed as time barred by the Presiding Officer, Sales Tax Tribunal, Punjab. The matter was brought to this court by filing petitions under Section 22 (2) of the Act for issuing direction to the Sales Tax Tribunal, Punjab, to refer the question of law, which were allowed by D. K. Mahajan and B. R. Tuli, JJ. , on 28th October, 1970. Thereafter the matter again went back to the Presiding Officer, Sales Tax Tribunal, Punjab, who has referred the following question of law for our decision:

(2.) THE relevant provision of the Act, which would be relevant for the decision of the question referred to, reads as under:

(3.) THE a5sessee-firm has been assessed as a dealer who manufactures goods for sale. The contention of Mr. J. N. Kaushal, Senior Advocate, was that, in the, circumstances and on the facts of this case, the assessee-firm could not be held a manufacturer of goods and that it had to be assessed as a general dealer. After giving our thoughtful consideration to the entire matter, in the light of the submissions made before us by the learned counsel for the parties, we are of the view that there is considerable force in the contention, of the learned counsel for the assessee-firm. From the statement of the case we find that the case of the department was that the assessee was an authorised contractor engaged in the purchase of firewood, removed trees from the forest and brought the same to his business premises, chopped and sold the same as firewood. The question that arises for consideration is whether all this process results in manufacture of any goods ? The answer, in our view, has to be in the negative. As observed by their Lordships of the Supreme Court in Commissioner of Sales Tax, U. P. , Lucknow v. Harbilas Rai and Sons [1968] 21 S. T. C. 17 (S. C.), the word "manufacture" has various shades of meaning, and in the context of sales tax legislation, if the goods to which some labour is applied remain essentially the same commercial article, it cannot be said that the final product is the result of manufacture. As to what do we mean by the word "manufacture", in another decision of the Supreme Court in Union of India and Anr. v. Delhi Cloth and General Mills Co. Ltd. A. I. R. 1963 S. C. 791, it was observed as follows: