The felling of trees and cutting them into pieces does not amount to manufacture of goods.

Prem Chand Jain, J.

1. This judgment, of ours would dispose of Sales Tax References Nos. 40 and 41 of 1971, which relate to the same firm, that is, Messrs. Pyare Lal Khushwant Rai (hereinafter referred to as the assessee-firm). The references relate to the assessment years 1959-60 and 1960-61. The assessee-firm is an unregistered dealer in firewood. It was held liable to pay sales tax by the Assessing Authority and the order of the Assessing Authority was upheld though with a little modification by the highest revisional authority. An application was made under Section 22(1) of the Punjab General Sales Tax Act, 1948 (hereinafter referred to as the Act) for referring certain questions of law arising out of the order of the Financial Commissioner (Taxation), Punjab, but the same was dismissed as time barred by the Presiding Officer, Sales Tax Tribunal, Punjab. The matter was brought to this court by filing petitions under Section 22(2) of the Act for issuing direction to the Sales Tax Tribunal, Punjab, to refer the question of law, which were allowed by D.K. Mahajan and B.R. Tuli, JJ., on 28th October, 1970. Thereafter the matter again went back to the Presiding Officer, Sales Tax Tribunal, Punjab, who has referred the following question of law for our decision:

Whether the business of firewood carried on by the applicant-firm can be called a manufacturing business and it can be called a manufacturer and further whether the liability of assessee to pay tax arises at Rs. 50,000 or Rs. 10,000?

2. The relevant provision of the Act, which would be relevant for the decision of the question referred to, reads as under:

4. (1) Subject to the provisions of Sections 5 and 6, every dealer except one dealing exclusively-in goods declared tax-free under Section 6 whose gross turnover during the year immediately preceding the commencement of this Act exceeded the taxable quantum shall be liable to pay tax under this Act on all sales effected after the coming into force of this Act and purchase made after the commencement of the East Punjab General Sales Tax (Amendment) Act, 1958....

(2) Every dealer to whom Sub-section (1) does not apply or who does not deal exclusively in goods declared to be tax-free under Section 6 shall be liable to pay tax under this Act on the expiry of 30 days after the date on which his gross turnover during any year first exceeds the taxable quantum: Provided that in the case of a dealer who imports any goods for sale or use in manufacturing or processing, or who manufactures or processes any goods for sale, the liability to pay tax shall commence with effect from the date on which his gross turnover during any year first exceeds the taxable quantum.

3. The a5sessee-firm has been assessed as a dealer who manufactures goods for sale. The contention of Mr. J.N. Kaushal, Senior Advocate, was that, in the, circumstances and on the facts of this case, the assessee-firm could not be held a manufacturer of goods and that it had to be assessed as a general dealer. After giving our thoughtful consideration to the entire matter, in the light of the submissions made before us by the learned counsel for the parties, we are of the view that there is considerable force in the contention, of the learned counsel for the assessee-firm. From the statement of the case we find that the case of the department was that the assessee was an authorised contractor engaged in the purchase of firewood, removed trees from the forest and brought the same to his business premises, chopped and sold the same as firewood. The question that arises for consideration is whether all this process results in manufacture of any goods ? The answer, in our view, has to be in the negative. As observed by their Lordships of the Supreme Court in Commissioner of Sales Tax, U. P., Lucknow V/s. Harbilas Rai and Sons [1968] 21 S.T.C. 17 (S.C.), the word "manufacture" has various shades of meaning, and in the context of sales tax legislation, if the goods to