IMPORTANT POINT
Mounting of the body of the Auto Rickshaw on the chassis thereof would amount to ‘manufacture’ within the meaning of Section 2(e-1) of the U.P. Sales Tax Act, 1948 as ‘Auto Rickshaw’ in ordinary commercial parlance has a definite connotation and it cannot be said to be its body or chassis.

Headnote:(i) U.P. Sales Tax Act, 1948—Sections 2 (e-1), 3-AAAA—U.P. Sales Tax Rules, 1948—Rule 12-A—Levy of purchase tax on ‘auto rickshaw’—Appellant dealing in manufacture and sale of Auto Rickshaw—It purchases body of Auto Rickshaw from M/s Apollo Builders and chassis from M/s Scooters India Ltd. upon issuing III-A form—Appellant was held liable to pay purchase tax on ground that upon mounting the body of Auto Rickshaw on the chassis and sale having not been made on the same condition and form, purchase tax was leviable—Appellant sold Auto Rickshaw after the body was mounted on chassis with the help of nuts and bolts—Whether mounting of body of Auto Rickshaw on the chassis thereof would amount to ‘manufacture’ within the meaning of Section 2 (e-1) of the Act—(Yes)—Meaning of ‘manufacture’ in terms of the statutory provision is of wide amplitude—It takes within its sweep not only a new product but also alterations made in an existing product.
       Held : ‘Auto Rickshaw’ in ordinary commercial parlance cannot be said to be its body or chassis. It has a definite connotation. The contention that once those nuts and bolts are removed the chassis and the body would be restored to their original position, in our considered opinion, is of not of much significance.(Para 10)
       The Court is required to give a literal meaning to the expression used by the Legislature, while interpreting the provisions of a statute. In terms of Form III-A, a trader would be exempted from payment of purchase tax only in the event the terms and conditions thereof are satisfied. Necessary condition for obtaining such exemption is that the assessee must sell the commodity it purchased in the same form and condition. The requirement of law, thus, is that goods once sold to a registered dealer must be sold in the same form and condition in which he had purchased. We have no doubt in our mind that the sales made by the assessee of chassis with mounted body would be selling a product which is in different condition from the chassis or the body, and, thus, the same would be liable to purchase tax under sub-section (a) of Section 3-AAAA of the Act. (Para 11)
       A commodity is identified by ordinary commercial parlance. Auto rickshaw is an auto rickshaw. It can be sold only as a combination of chassis and the body mounted thereupon, and not body or chassis separately. If it is so done, consequences may be different.(Para 13)
       The Tribunal also opined that by mounting auto rickshaw body on the chassis a new product comes into being. However, it had proceeded to hold that both chassis and auto rickshaw being under the same entry no tax would be payable. The Tribunal was not correct in that behalf as it failed to take into consideration the fact that if two articles were purchased by the assessee and the articles it sold were different commodities; purchase tax would be payable therefor as the terms and conditions laid down in Form 3-A had not been satisfied.(Para 19)
       (ii) INTERPRETATION OF STATUTES—Rule of Literal Interpretation—Court is required to give a literal meaning to the expression used by the legislature.(Para 11)

JUDGMENT

S.B. Sinha, J.—Leave granted.

2. Appellant herein deals in manufacture and sale of Auto Rickshaw. For the said purpose, it purchases body of Auto Rickshaw from M/s. Apollo Builders, a sister concern of M/s. Scooters India Ltd. and chassis thereof from M/s. Scooters India Ltd.

3. The question which arises for consideration in this appeal is as to whether mounting of the body of the Auto Rickshaw on the Chassis thereof would amount to ‘manufacture’ within the meaning of Section 2 (e-1) of the U.P. Sales Tax Act, 1948 (‘the Act’, for short).

4. It is not in dispute that the appellant had purchased ‘Vikram three wheeler Chassis’ upon issuing III-A form from M/s. Scooters India Ltd. It did not pay any purchase tax in respect of the purchases made from M/s. Appolo Builders. Appellant was held to be liable to pay purchase tax on the premise that upon mounting the body of Auto Rickshaw on the chassis and sale having not been made on the same condition and form, purchase tax was leviable.

5. The contention of the appellant is that having regard to the provisions contained in Section 3-AAAA of the Act, no purchase tax is payable as the condition remained the same. In any event having regard to the Entry 43 B and having regard to the fact both chassis and body of three wheelers came within the purview of ‘auto rickshaw’, which find place in the same entry, no tax was payable. Reliance, in this behalf, has been placed on the decision of Commercial Taxes Officer, Anti Evasion-I vs. Rajesh Motors & Anr. (1997) 107 STC 468; the decision of a Rajasthan Taxation Tribunal as also the decision of Dy. Commissioner of Salex Tax (Law), Board of Revenue (Taxes), Ernakulam vs. M/s. Pio Food Packers 1980 Supp. S.C.C. 174 and M/s. Sterling Foods, a Partnership firm represented by its partner Sh. Amesh Dalpatram v. State of Karnataka & Anr. (1986) 3 SCC 469.

6. The Act was enacted to provide for levy on the tax of purchase of goods in the State of U.P.

‘Manufacture’ has been defined in section 2(e-1) of the Act to mean:

“(e-1) ‘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.”

7. Section 3-AAAA provides for liability to pay tax on goods under certain circumstances. It reads as under:-

“1. Subject to the provisions of section 3, every dealer who purchases any goods liable to tax under this Act:-

(a)from any registered dealer in circumstances in which no tax is payable by such registered dealer, shall be liable to pay tax on the purchase price of such goods at the same rate at which, but for such circumstances, tax would have been payable on the sale of such goods;

(b)from any person other than a registered dealer whether or not Tax is payable by such person, shall be liable to pay tax on the purchase price of such goods at the same rate at which tax is payable on the sale of such goods:

Provided that no tax shall be leviable on the purchase price of such goods in the circumstances mentioned in clauses (a) and (b) if–

(i)Such goods purchased from a registered dealer have already been subjected to tax or may be subjected to tax under this Act;

(ii)tax has already been paid in respect of such goods purchased from any person other than a registered dealer;

(iii)the purchasing dealer resells such goods within the State or in the course of inter-State trade or commerce or exports out of the territory of India, in the same form and condition in which he had purchased them;

(iv)such goods are liable to be exempted under Section 4-A of this Act.”

8. It has been noticed herein before that in regard to the purchases made from M/s. Scooters India Ltd. Form IIIA has been utilized. Similar purchases of Auto Rickshaw body were made from Appolo Builders against issuance of Form III-A prescribed in terms of Rule 12-A of the U.P. Sales Tax Rules, 1948, which,

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