1997 (11) TMI 475 - SC - VAT and Sales Tax

Whether the rearing of the chicks until they become marketable broilers is manufacture within the definition of that word in the said Act? Held that - Appeal allowed. Referring 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. Therefore, the appellants are entitled to succeed having regard to the definition of the word manufacture in section 2(j) of the Act.

Summary

Issues:
1. Interpretation of the definition of "manufacture" under the Madhya Pradesh General Sales Tax Act, 1958.
2. Determining whether rearing broilers constitutes "manufacture" within the Act.
3. Examination of the definition of "goods" under the Act.
4. Analysis of judicial precedents regarding the interpretation of "manufacture" in tax laws.

Analysis:
The Supreme Court analyzed the appeal concerning the interpretation of the term "manufacture" under the Madhya Pradesh General Sales Tax Act, 1958. The appellants, engaged in rearing broilers through technological processes, challenged actions taken against them based on the exclusion of broiler rearing from the definition of "manufacture." The Court noted the definition of "manufacture" under section 2(j) of the Act, which includes processes of producing goods. The Court examined the process of rearing chicks into broilers and its classification as "manufacture" under the Act.

The Court considered the definition of "goods" under section 2(g) of the Act, which encompasses movable property and materials for construction. The appellants argued that rearing chicks into broilers constituted "manufacture" as the broilers were goods prepared for the market. The respondents contended that while broilers were goods under section 2(g), they did not qualify as goods under the definition of "manufacture" in section 2(j). Reference was made to a judgment under the Kerala General Sales Tax Act for interpreting the term "manufacture" in common parlance.

The Court emphasized the broad definition of "manufacture" under the Act, as analyzed in a previous judgment. It deliberated on whether rearing chicks until they become marketable broilers fell within the definition of "manufacture." The Court referred to the definition of "rear" in Webster's Dictionary, which involves breeding animals for use or market. It concluded that preparing goods for the market constituted a process of manufacture under the Act.

The Court rejected the argument that animate objects should not be considered goods under the definition of "manufacture." It emphasized consistency in interpreting the term "goods" throughout the Act. Ultimately, the Court held in favor of the appellants, stating that rearing broilers qualified as "manufacture" under the Act. The appeal was allowed, the order under appeal was set aside, and the writ petitions filed by the appellants were made absolute. No costs were awarded in the judgment.