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TMI Blog1965 (4) TMI 103X X X X Extracts X X X X X X X X Extracts X X X X ..... s claimed by virtue of notification No. 8728-C.T-66/49 F. dated the 1st July, 1949, of the Government of Orissa in the Finance Department issued in pursuance of section 6 of the Orissa Sales Tax Act, 1947, exempting certain classes of sales from payment of sales tax. The item with which we are concerned in these petitions is item 33 of the said notification: "33. Gold ornaments.-When sold by the manufacturer who charges separately for the value of gold and the cost of manufacture." There was also a press note issued by the Government to the effect that gold ornaments will also be exempted from sales tax when the manufacturer charges them separately for the value of gold and the cost of manufacture. 3.. The question before the High Court was whether the petitioners were "manufacturers". The Court was to construe the exemption clause which purports to exempt manufacturer-sellers when they sell gold ornaments and charge separately for the gold and for making charges. This Court, before remand by the Supreme Court, took the view that the expression "manufacturer" occurring in the aforesaid exemption clause means the first owner of the finished product for whom it is made, either by ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... siness with respect to articles manufactured therein within the meaning of section 2 of the Validation Act 7 of 1961. In Epari China Krishna Moorthy's case(2) mentioned above the Supreme Court had not defined the meaning of the word "manufactory" as the parties therein did not claim that they run any manufactory within the meaning of the said section. In view of the statement filed by the dealers before the Commercial Tax Officer, as quoted in extenso in the judgment of the Supreme Court by which the said appeals were remanded to this Court, the Supreme Court noted the position that the dealers are stated to have had workshops and they were having the ornaments made in the manner described in the statement. 6.. In view of the statement made on behalf of the dealers the Supreme Court remanded the case to the High Court. The reasoning on which the Supreme Court made the order of remand is (as quoted from the judgment) this: "The question is whether in the circumstances pleaded by them (dealers), they run a 'manufactory' within the meaning of section 2 of Act 7 of 1961. The High Court did not go into that question, for at the time it decided the case the amending Act had not come ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ent form. It is in this manner that the word "manufactory" has been given a connotation on the facts of each particular case. A manufactory (which is not defined in the Act) must be a place where a manufacture is carried on. 9.. The first question is: What is manufacture? In Benington and Sons v. The Metropolitan Board of Works54 L.T. 837., Mr. Justice Chitty rightly observed that each case must be decided upon its own facts. Many cases may be put of (sic) more or less difficulty as to what is manufacture. In the light of the observations made in this English decision we take the view that in the present case there is a manufacture of ornament because the process by which gold is converted from its natural state to the article of commerce known as ornament is a manufacture. The dealers' point is that they carry on manufacture of ornaments in that they take the raw material, as they call it, which is gold, and that they convert it into a new article of commerce. The nature of their operations is this: They take the gold and they submit it to a process so as to convert it to ornaments of different kinds. By passing raw gold through these operations they produce articles which the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... accommodate not more than 10 such workers. The petitioners have in their continuous employment goldsmith artisans, (about 30 others) including myself, who out of gold supplied by the petitioners, produce ornaments as per the specifications given by them, in their residence". The petitioner Jammula Srirangam himself filed an affidavit dated 1st December, 1964. The petitioners' case as stated therein is this: "That the petitioner supplies to these workers the raw materials, gold, etc. They are also given electric facilities and are supplied with implements like desk, vice fitted to the desk, pipes, etc. The skilled workers however bring their special instruments which are sometimes required for preparation of special nature and accustomed to handle. The karigars prepare and produce the ornaments according to the specifications given by the petitioner and under his direct supervision. * * * The list of 10 karigars actually working in the premises of the petitioners where the gold ornaments are manufactured, and the list of remaining karigars who prepare the ornaments at their respective residences, and the gold supplied to them, the wages earned by them are also shown in the ledge ..... X X X X Extracts X X X X X X X X Extracts X X X X
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