JUDGMENT

PANDA, J. - This is a reference made by the Member, Sales Tax Tribunal, under section 24(1) of the Orissa Sales Tax Act, 1947 (Act 14 of 1947) (hereinafter referred to as the Act) at the instance of the State of Orissa posing the following two points of law said to be arising out of its judgment dated 4th December, 1972, for answer by this court :

"(1) Whether, on the facts and in the circumstances of the case, the Member, Sales Tax Tribunal, is right in holding that conversion of logs into different sizes and shapes does not amount to manufacture and production of a different commodity ?

(2) Whether, on the facts and in the circumstances of the case, the Member, Sales Tax Tribunal, is right in holding that there is no contravention of the provisions contained in the proviso to section 5(2)(A)(a)(ii) of the Orissa Sales Tax Act, when the opponent converted logs and timbers into different sizes and sold the same inside the State of Orissa ?"

2. The opposite party, Patel Saw Mill, is a registered dealer carrying on business in logs and timbers. It purchased logs from various sources, processed the same in its mill and sold sized timbers either in the State of Orissa or in th