Mixing different varieties of tea manually, without the application of mechanical or chemical processes, does not constitute processing or alteration within the meaning of the proviso to section 8(a) of the Bombay Sales Tax Act, 1953.

JUDGMENT OF THE TRIBUNAL

The applicants, who deal in tea under the name and style of Messrs Nilgiri Ceylon Tea Supply Co. claimed a deduction from their turnover of the sales of goods which had been purchased by them from registered dealers on or after the appointed day mentioned in section 8 of the Bombay Sales Tax Act, 1953. That deduction has not been allowed by the authorities below in view of the proviso "that the goods have not been processed or altered in any manner after such purchase". It was found that they prepared new blends by mixing different varieties of tea purchased by them and sold such new blend of tea. It was contended that the mixing of different varieties of tea should not be regarded as "processing". The Additional Collector of Sales Tax has held that by the blending of different varieties of tea new mixtures are prepared, that the value and utility of the original are thereby altered, and that, therefore, the blending of different kinds of tea amounts to processing. The applicants filed an affidavit before the Additional Collector in which it was stated that the mixing of different kinds of tea was done by hand, no machinery or chemical process for the purpose being employed and that, therefore, it should not be held that there had been any processing.

2. In Chotalal Raghunathiji v. The State of Bombay (1 S.T.D. 65), it was held that the word "process" appeared to have a wider connotation than the word "manufacture", and that the main thing which was necessary for holding a person to be a manufacturer was that he should, by some process or series of processes, make a certain kind of goods out of another or so alter or change the original thing or material as to make it into something which was recognised commercially as different from the original stuff. In the case of Motilal Ramchandra Oswal v. The State of Bombay (2 S.T.D. 33), this Tribunal, however, held that the boiling of butter into ghee did not amount to processing. In our opinion, and also in view of the earlier decision, this view appears to be erroneous, and we, accordingly, overrule the decision in the latter case. Mr. N. A. Palkhiwala for the applicants, however, has argued that as the mixtures were the result of mixing tea leaves and tea dust and as after the mixture the ingredients could be separated into the original varieties, it should not be held that there has been any processing in such mixing of the varieties. We do not think that this contention is tenable, as what was sold was a distinct species of goods different from the original varieties and as the mixing of the varieties was not a haphazard process but required a certain amount of skill in that a certain proportion of each of the original ingredients had to be mixed; and the resulting mixtures were intended to meet a demand which was different from the demand that might exist for the original ingredients in the market. In North Bengal Stores Ltd. v. Member, Board of Revenue, Bengal ([1946] 1 S.T.C. 157), the High Court of Calcutta dealt with a case where different drugs had been mixed by a dispensing chemist according to the prescription of a physician, and in considering the connotation of the expression "to manufacture goods" observed, "The drugs may or may not be transformed into a different matter. The mixture may become a chemical compound in which the drugs used may have been transformed into a totally different thing in their character and properties, or it may result in what is called a mechanical or physical mixture, in which each drug retains its original properties. But in either case the resulting mixture is a distinct product brought into being in a particular form suitable for the particular use for which it is intended and capable of being sold or supplied for a price ................... This finished product is different from the ingredients with which it is made, just in the same sense as an ornament is different from the lump of gold or a pair of boots dif

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