The judgment of the Court was delivered by

KANIA, J. - This is a reference under section 61(1) of the Bombay Sales Tax Act, 1959 (hereinafter referred to as "the said Act"), made at the instance of the Commissioner of Sales Tax. The question referred to us for our determination is as follows :

"Whether, on the facts and in the circumstances of the case, the Tribunal was justified in holding that the activity carried on by the respondent, viz., mixing of distilled water with methonol in certain proportion and selling the same as 'Methimix' does not amount to manufacture of goods within the meaning of section 2(17) of the Bombay Sales Tax Act, 1959 ?"

The respondent is a dealer registered under the said Act. By an application dated 14th October, 1971, made under section 52(1) of the said Act, to the Commissioner of Sales Tax, the respondent sought determination of the correct rate of tax payable on the sale of Methimix effected under a certain invoice, a copy of which was annexed to the application. The respondent applied for determination of the question as to whether mixing of distilled water with methonol amounted to manufacture of goods under section 2(17) of the said Act. The respondent further applied for the determination of the correct rate of tax payable on the sale of Methimix effected under the aforesaid invoice. The respondent purchased methonol from the Fertilizer Corporation of India which is a registered dealer under the said Act. The methonol so purchased was mixed by the respondent with distilled water in the exact proportion of 45 per cent. methonol and 55 per cent. distilled water. This mixture was sold by the respondent under the name "Methimix". It was stated in the said application that this mixture was a power augmentation fluid used for increasing power development by aviation engines and was principally used at the take-off stage. The Commissioner of Sales Tax came to the conclusion that mixing of distilled water with methonol in the circumstances aforesaid would amount to "manufacture" as defined in section 2(17) of the said Act, that the product Methimix was covered by entry 67 of Schedule C to the said Act and that it would be liable to the levy of sales tax at 12 per cent. under section 8 of the said Act. The respondent preferred an appeal against this decision to the Sales Tax Tribunal. The Tribunal held that mixing of distilled water with methonol by the respondent as aforestated did not amount to "manufacture" within the meaning of the said term under section 2(17) of the said Act. In view of this conclusion, the Tribunal did not examine the question of the rate of tax payable on the sale of Methimix. The Tribunal set aside the order of the Commissioner of Sales Tax in the determination proceedings, holding that the respondent having purchased methonol from a registered dealer would be entitled to the benefit of resale while selling the diluted methonol in the way in which it had done. As no process of manufacture was involved, the sales by the respondent would amount to resales within the meaning of section 2(26) of the said Act and hence the amount of the said resales would be liable to be deducted from the taxable turnover under section 8 of the said Act. The question referred to us arises from this decision of the Tribunal.

Clause (17) of section 2 of the said Act gives a very extended definition to the term "manufacture". The said clause reads thus :

"'manufacture', with all its grammatical variations and cognate expressions, means producing, making, extracting, altering, ornamenting, finishing or otherwise processing, treating, or adapting any goods; but does not include such manufactures or manufacturing processes as may be prescribed."

We have no doubt that in view of the said extended definition, the mixing of methonol with distilled water in exact proportions and subjecting the mixture to laboratory test as has been done in the present case by the respondent would be covered in