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TMI Blog2006 (3) TMI 723X X X X Extracts X X X X X X X X Extracts X X X X ..... peal and deleted the tax levied on the sale consideration of REP licence. The Tribunal has held that REP licence was an unclassified goods, liable to tax at the point of manufacturer or importer and since the REP licence was issued by the Deputy Chief Controller of Importer and Exporter, Moradabad, dealer was neither manufacturer nor importer. Heard learned counsel for the parties. The learned Standing Counsel submitted that after the issue of licence by the Deputy Chief Controller of Import and Export, Moradabad, first sale was made by the dealer, therefore, dealer was the manufacturer of such REP licence within the definition of section 2(ee) of the Act. Sri Vikram Gulati, Advocate, filed Vakalatnama on behalf of the dealer but despite the case being listed number of times and the list is being revised, Sri Vikram Gulati, Advocate did not appear. Thus, Sri K. Saxena, Advocate, has been asked to assist the court as amicus curiae. Sri K. Saxena, Advocate, submitted that there is no dispute that REP licence is goods as held by the apex court in the case of Vikas Sales Corporation v. Commissioner of Commercial Taxes reported in [1996] 102 STC 106; [1996] UPTC 1097. He submitted ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... to whether, in the facts and circumstance of the case, the dealer could be treated to be a manufacturer so as to subject to tax on the sale of REP licence. The term manufacture has been defined under section 2(e1) of the Act which reads as follows: (e1) 'manufacture' means producing, making, mining, collecting, extracting, altering, ornamenting, finishing or otherwise processing, treating or adapting any goods; but does not include such manufacture or manufacturing processes as may be prescribed. The term manufacturer has been defined under section 2(ee) of the Act which runs as under: (ee) 'manufacturer' in relation to any goods means the dealer who makes the first sale of such goods in the State after their manufacture and includes . . . The main dispute in the present case is therefore, whether the dealer can be treated to be a manufacturer. The case of the Revenue is that these REP licences were manufactured by the authority granting licence and the sale of such manufactured goods was made by the dealer and, therefore, it would be treated as the manufacturer and thus liable to tax at eight per cent. In the case of Vikas Sales Corpora ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Their Lordships further observed that the expression movable property is stated to include corporeal as well as incorporeal property, debts, contracts and other choses in-action are said to be chattels, no less than furniture or stock-in-trade. Similarly patents, copyrights and other rights in rem, which are not rights over land, are also included within the meaning of movable property. After having examined the definition of the term goods and the expression movable property as also the provisions of Import and Export Policy of the Government of India (1990-93), their Lordships held the above provisions do establish that REP licences have their own value. They are bought and sold as such. The original licensee or the purchaser is not bound to import the goods permissible thereunder. He can simply sell it to another and that another to yet another person. In other words, these licences/exim scrips have an inherent value of their own and are traded as such. They are treated and dealt within the commercial world as merchandise as goods . For all purposes and intents, it is goods. From the above observations of the honourable Supreme Court, it would appear distinctly ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tate of Maharashtra v. Mahalaxmi Stores reported in [2003] 129 STC 79; [2003] UPTC 453; [2002] STI 97, the honourable Supreme Court held crushing of boulders into small sizes known as gitti does not amount of manufacture within the definition of section 2(17) of the Bombay Sales Tax Act. In the case of S.R. Cannery, Allahabad v. Commissioner of Trade Tax reported in [2007] 10 VST 23; [2006] UPTC 710; [2006] 3 VAT Law Journal 8, this court after referring to a large number of cases on the subject held that the process of preservation and tinning does not amount to manufacture. It was further held that every type of variation of the goods or finishing the goods would not amount to manufacture unless it results in emergence of new commercial commodity. From the perusal of the aforesaid cases it would appear that some process has to be carried out on a commodity to obtain a new manufactured commodity. In every case of manufacture there has to be some process whether slight or extensive. This act of processing can be carried out only in tangible goods and not in respect of intangible goods; therefore, definition of the term manufacture given under section 2(e1) of the Act applie ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ability of tax could be fastened on dealer. It is also very significant to point out the section 2 of the Act which contains various definition, including definition of the term manufacturer , starts with the phase in this Act unless there is anything repugnant in the subject or context . This phrase came up for consideration before this honourable court in the case of Commissioner of Sales Tax v. Maha Prabandhak, Jal Sansthan, Kanpur reported in [2000] UPTC 1000(1). After referring to several decisions of the honourable Supreme Court this court observed that the meaning to be ordinarily given is what is given in the definition clause but this is not inflexible and there may be sections in the Act where the meaning may have to be departed from on account of the subject or context in which the word has been used and that will be giving effect to the opening sentence in the definition section, namely, unless there is anything repugnant in the subject or context . This court further (1)See page 31 infra. held that no doubt under section 2(e1) manufacture would be complete if any of the process mentioned therein is undertaken but in view of the opening phrase in section 2 of the ..... X X X X Extracts X X X X X X X X Extracts X X X X
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