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1993 (10) TMI 323 - HC - VAT and Sales Tax
Issues involved: Determination of whether the process of excavating and dressing stones amounts to manufacturing, and whether the levy of tax was justified.
Summary: Issue 1: Process of excavating and dressing stones as manufacturing The Commercial Taxes Officer filed a revision under section 15 of the Rajasthan Sales Tax Act, 1954, challenging the Sales Tax Tribunal's order. The Tribunal upheld that the process of cutting stones after excavation constitutes manufacturing. The definition of "manufacture" under section 2(k) includes any process of producing goods involving a change in physical or chemical nature. In this case, the stones were cut into specific sizes after excavation, resulting in a different commercial product. The Tribunal found that the process of reducing big blocks of stones to smaller pieces with defined dimensions qualifies as manufacturing. The Tribunal's decision was based on the transformation of the original commodity into a different product known differently in commercial parlance. The Board of Revenue and Sales Tax Tribunal's findings supported the view that the assessee is a manufacturer eligible for tax benefits under a specific notification. Issue 2: Justification of setting aside the levy of tax The assessing authority had initially rejected the declaration forms submitted by the assessee, leading to the levy of tax at 7%. However, the Tribunal's decision to set aside the tax levy was deemed appropriate based on the conclusion that the process undertaken by the assessee constituted manufacturing. The Tribunal affirmed that the point of tax had correctly shifted to the manufacturer as per the relevant notification. Consequently, the Sales Tax Tribunal's order was upheld, and the revision was dismissed, affirming the assessee's status as a manufacturer eligible for the tax benefits outlined in the notification. In conclusion, the revision filed by the Commercial Taxes Officer was dismissed, and the Tribunal's decision regarding the manufacturing process of stones and the associated tax levy was upheld.
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