In the case of M/s A.P.Products v. State of
In the case of Deputy Commissioner of Sales Tax (Law), Board of Revenue (Taxes), Ernakulam v. M/s PIO Food Packers, 1980 Supp (1) SCC 174, the Apex Court held that "Manufacture implies a change, but every change is 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.
In Deputy Commercial Tax Officer and another v. Mvelmurugan, STI 2000 Supreme Court 175, the
Before Allahabad High Court, in WRIT TAX No. 1166 of 2003., M/S Ashoka Food & De-Hydred Sansthan Vs. State Of U.P. & Others,
the petitioner apart from being engaged in the activities of trading various spices, such as Ajwain, Kalauji, Jeera, Raee, is also engaged in purchase of naturally grown spices and after grinding the same, was mixing with other spices and selling them. Such spices which are being sold by the petitioner, were Garam Masala, Chat Masala, Sabji Masala, Meat Masala etc. The question was whether these spices which the petitioner was obtainning as a result of mixing and grinding of various spices in different proportion, can be said to be a process of manufacture or simply processing. Applying the test laid down by the Apex Court in the aforesaid case, the Division Bench (Hon. R.K.Agrawal and Hon. Vikram Nath, JJ.) held that as a result of the process undertaken by the petitioner, a new and different article has emerged, which is entirely different from the natural grown spices. Thus, the petitioner is a manufacturer of such spices, namely, Garam Masala, Chat Masala, Sabji Masala, Meat Masala etc. and it cannot be said that the activities undertaken by the petitioner amounts to simply processing of spices.
Their lordships held observed that the petitioner not only mixes various spices but also uses the process of grinding them and making an entirely new commercial commodity, for example, Garam Masala, Chat Masala, Sabji Masala, Meat Masala etc. It is not for the facility of the customers. The Court held that the view adopted by Allahabad High Court in Commissioner, Sales Tax v. Ashok Grah Udyog Kendra (P) Ltd., 2004 NTN (25) 702 (Allahabad) that grinding spices and condiment and mixing them would not amount to manufacture as no new commodity in common parlance has come into existence, cannot be said to be a good law as it is contrary to the view taken in the latest decision of the Apex Court in the case of M/s A.P.Products (supra).
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