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TMI Blog1981 (9) TMI 265X X X X Extracts X X X X X X X X Extracts X X X X ..... ctured within the meaning of section 2(16) of the Act and whether the deduction claimed by the opponent of resales of goods purchased from registered dealers is admissible?" The question arose in the course of the assessment of the assessee, a dealer reselling dyes and chemicals after diluting the concentration of the dyes by adding certain quantity of gobar salt, soda-bi-carb or soda-ash in the said dyes purchased by it from the registered dealers. The dyes with the reduced strength were resold at a reduced price. The question arose whether the opponentassessee was entitled to claim deduction of the purchases from the registered dealers from his turnover of sales under section 7(ii) of the Gujarat Act. The Sales Tax Officer disallowed ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... wgule's case [1981] 47 STC 124 (SC), one of the questions before the Supreme Court was, whether blending of iron ore from the different stock piles made at the harbour site in the course of loading in the ship by means of mechnical ore handling plant constituted manufacture or processing of ore for sale within the meaning of section 8(3)(b) of the Central Sales Tax Act read with rule 13 of the Central Sales Tax (Registration and Turnover) Rules. In that context, the Supreme Court, speaking through Bhagwati, J., referred with approval to the test laid down for distinguishing as to what act would constitute manufacture in its earlier decision in Pio Food Packers' case [1980] 46 STC 63 (SC). The test as laid down in Pio Food Packers' case [198 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... stinct article that a manufacture can be said to take place.' The test that is required to be applied is: does the processing of the original commodity bring into existence a commercially different and distinct commodity? On an application of this test, it is clear that the blending of different qualities of ore possessing different chemical and physical composition so as to produce ore of the contractual specifications cannot be said to involve the process of manufacture, since the ore that is produced cannot be regarded as commercially new and distinct commodity from the ore of different specifications blended together. What is produced as a result of blending is commercially the same article, namely, ore, though with different specificat ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... not manufacture, and yet every change in an article is the result of treatment, labour and manipulation. But something more is necessary...There must be transformation; a new and different article must emerge, 'having a distinctive name, character or use'....... At some point processing and manufacturing will merge. But where the commodity retains a continuing substantial identity through the processing stage we cannot say that it has been 'manufactured'." We do not think that the principle which has been referred to by the learned Government Pleader as enunciated by the Supreme Court of United States and referred to in Pio Food Packers' case [1980] 46 STC 63 (SC) can be of much assistance to the cause of the State on the facts and in th ..... X X X X Extracts X X X X X X X X Extracts X X X X
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