JUDGMENT

V.S. SIRPUKAR, J. —

1.The Judgment of the High Court denying the exemption from payment of Sales Tax is under challenge in this appeal at the instance of the Appellant Pondicherry State Cooperative Consumer Federation Ltd. (for short “the Assessee”). Such exemption was granted by the Sales Tax Appellate Tribunal at Pondicherry by allowing an appeal filed by the Assessee. Prior to that the Assessee was assessed by the Assessing Authority and on an appeal by the Assessee the taxable liability was brought down to Rs.14,26,729.86 by the Appellate Commissioner. An appeal was, thereafter, filed before the Tribunal which allowed the appeal holding that the Assessee was covered by the G.O.Ms.No.15/74 dated 25.6.1974 and was as such exempted from paying the Sales Tax.

2.The Assessee is a Small Scale Industry certified as such by Director of Industries, Government of Pondicherry by G.O. No.35/IND/88-89/A-5/A-9 dated 19.5.1989. The said certificate specifically provided that the Unit of the Assessee was exempted from payment of Sales Tax for five years vide G.O.Ms.No.15/74/FIN (CT) dated 25.6.1974. It is obvious that thereafter this tax holiday was extended from time to time. The Assessee is also registered as a Small Industrial Unit and is certified as such by the Director of Industries by his order dated 9.3.1989. The Assessee purchases Palmolive Oil in bulk and packs the oil in small packages for the purpose of selling in retail and this packing of Palmolive Oil is done in the small industrial unit of the Assessee.

3.The Government of Pondicherry has issued a G.O. which we have referred to earlier dated 25.6.1974 and vide that G.O., in exercise of powers conferred by Sub-Section (3) of Section 19 of the Pondicherry General Sales Tax Act, 1967 a general exemption is provided from payment of Sales Tax on the turnover of the sales of goods “manufactured” by (i) Small Scale Industries which went into production on or after 6th November; and (ii) All industries other than small scale industries which went into production on or after 1st April, 1971, as certified by the Director of Industries, Pondicherry. There is no difficulty and it is an accepted position that the appellant-assessee is covered by this G.O.

4.The Department, however, took the view that purchase of Palmolive Oil and then re-packing the same could not amount to manufacture of goods and as such the said G.O. could not be made applicable to the Assessee’s case. It is in that view that the Assessment Orders were passed. The Tribunal took the view that though in the strict legal sense the Assessee’s activities could not be viewed as “manufacturing” yet since the Director of Industries had exempted the Assessee from payment of Sales Tax it had to be accepted as a valid legal document founded on the authority of the Finance Department in terms of G.O.Ms.No.15/74 dated 25.6.1974. In that view the Tribunal allowed the appeal filed by the Assessee. However, the High Court took the view that for being covered under G.O.Ms.No.15/74 dated 25.6.1974 it had to be proved by the Assessee that it “manufactured” the goods since the said G.O. was applicable to the industries manufacturing goods and the turnover relating to such manufactured goods. The High Court further took the view that it could not be said that there was any manufacturing process involved in the Assessee’s Small Scale Industry and, therefore, held that no exemption would be available to the Assessee. It is this judgment of the High Court which is assailed before us.

5.Learned Senior Counsel Shri Venkatraman appearing for the Appellant-Assessee submitted that this question was no more res integra and was covered by the Judgment of this Court reported in Vadilal Chemicals Ltd. vs. State of U.P. & Ors1. [(2006) 6 SCC 292]. It was pointed out that in that case an identical question fell for consideration under the similar circumstances. There also, the question was: as to whether the small scale industry which was engaged