2009 (5) TMI 1018 - HC - VAT and Sales Tax

Summary

Issues involved: Whether blending and packing of tea amounts to manufacturing u/s the U.P. Trade Tax Act for the assessment year 1998-99.

The High Court considered the question of law regarding the classification of blending and packing of tea as manufacturing. The assessee was engaged in blending and packaging of tea, where the final product remained tea itself. The court referred to previous judgments, including those of the Hon'ble Supreme Court, to analyze the concept of "manufacture" under the U.P. Trade Tax Act. It was emphasized that for an activity to be considered manufacturing, it must result in the emergence of a new commercial commodity with a new commercial identity. The court highlighted that if the goods remain the same and are identifiable under the Act as the same commodity, it would not amount to manufacturing.

The court also took into account a decision of the same Court in a similar case, where it was concluded that blending and packing of tea did not result in the creation of a new commercial commodity. Based on the legal precedents and interpretations of the relevant provisions, the court held that the unbranded tea produced through blending did not amount to the manufacture of a new commercial commodity. Consequently, the question was answered in favor of the assessee and against the department. The revision filed by the State was dismissed accordingly.