1962 (11) TMI 28 - HC - VAT and Sales Tax

Summary

Issues:
1. Whether the respondents are 'processors' within the meaning of the Bombay Sales Tax Act, 1953?
2. Whether the respondents are producers or manufacturers within the meaning of the Act?
3. Whether the respondents are liable to pay tax under section 5 of the Act from a specific date?

Analysis:
1. The court analyzed the term "process" in the context of the Act, referring to dictionaries for interpretation. It concluded that removing spare parts from old motor-cars for sale does not constitute processing goods. The court emphasized that the spare parts retain their identity and are not transformed into a different commercial commodity. The court cited relevant case law to support its interpretation, ultimately answering question 1 in the negative.

2. Regarding the production or manufacturing of goods, the court considered whether taking parts out of a car amounts to production. It distinguished this action from cases involving the transformation of goods into different commercial commodities. The court highlighted that the spare parts maintain their distinct identity even when removed from the car, leading to the conclusion that the respondents did not produce any goods. The court referenced case law to illustrate the distinction between manufacturing and the actions taken by the respondents, ultimately answering question 2 in the negative.

3. The court's response to question 3 was contingent on the answers to questions 1 and 2. Since the court determined that the respondents were not processors or producers/manufacturers within the Act, it concluded that the respondents were not liable to pay tax under section 5(1)(b)(ii) of the Bombay Sales Tax Act, 1953. The court ordered the applicant to pay the costs of the reference, thereby settling the matter conclusively.

This detailed analysis of the judgment provides a comprehensive understanding of the court's reasoning and decision on each issue raised in the reference under the Bombay Sales Tax Act, 1953.