( 1 ) AT the instance of the Revenue, the Income-tax Appellate Tribunal, Delhi Bench "b", New delhi, has referred the following question for the opinion of this court :

"whether, on the facts and in the circumstances of the case, the Tribunal was correct in holding that the firm, Messrs. Amjad Ali and Company, in which the assessee was a partner was an industrial undertaking within the meaning of the Explanation to Section 5 (1) (xxxii) of the wealth-tax Act, 1957, and as such in confirming the order of the Appellate Assistant commissioner whereby he held that the assessee was entitled to exemption under Section 5 (1) (xxxii) of the Act in respect of his interest in the said firm ?"

( 2 ) LIST is revised. None appears for the assessee. We have, therefore, heard only learned standing counsel for the Department.

( 3 ) THE opposite party is a partner in the firm, Messrs. Amjad Ali and Co. , Meerut, which is said to be engaged in the manufacture and processing of tobacco. The Tribunal relying on the order of the Appellate Assistant Commissioner found :

"the process which the raw tobacco has to undergo till it reaches the final stage of sale to beeri merchants has been mentioned by the assessee in his submission to the Appellate Assistant commissioner. In our opinion, the Appellate Assistant Commissioner was correct in giving the wealth-tax Officer necessary directions to give the assessee relief under Section 5 (1) (xxxii) of the Wealth-tax Act, 1957. "

( 4 ) IT is, therefore, necessary to advert to the finding of the Appellate Assistant Commissioner, who dearly found that the firm was engaged in the processing of tobacco. He reached this conclusion on the basis of the following observations :

"there is no doubt whatsoever that the appellant after purchasing tobacco leaves, subjected the same to various processes of crushing, removal of stems and dust therefrom and taking out a mixture of tobacco which was ultimately sold to the intending manufacturers of beeris. "

( 5 ) THE question for consideration is whether the Appellate Tribunal was right in affirming the view taken by the Appellate Assistant Commissioner. The word "processing" has not been defined under the Wealth-tax Act, 1957 (briefly, "the Act"), and, therefore, it is necessary to see what is the true meaning and connotation of the word "processing" within the meaning of section 5 (1) (xxxii) of the Act. The question of what is "processing", came up before the supreme Court in Chowgule and Co. Pvt. Ltd. v. Union of India [1981] 47 STC 124. In this authority, the question before the Supreme Court was as to what is the correct meaning and connotation of the word "processing" in Section 8 (3) (b) of the Central Sales Tax Act and Rule 13 of the Central Sales Tax (Registration and Turnover) Rules, 1957, which too did not define the word "processing". The Supreme Court then adverted to Websters Dictionary, which gives the following meaning of the word "process" (at page 130 ):

"to subject to some special process or treatment, to subject (especially raw material) to a process of manufacture, development or preparation for the market, etc. , to convert into marketable form as livestock by slaughtering, grain by milling, cotton by spinning, milk by pasteurising, fruits and vegetables by sorting and repacking. "

( 6 ) CONSIDERING the said definition, the Supreme Court held (at page 131) :

"where, therefore, any commodity is subjected to a process or treatment with a view to its development or preparation for the market, as, for example, by sorting and repacking fruits and vegetables, it would amount to processing of the commodity within the meaning of Section 8 (3) (b) and Rule 13. The nature and extent of processing may vary from case to case ; in one case the processing may be slight and in another it may be extensive ; but with each process suffered, the commodity would experience a change. Wherever a commodity undergoes a change as a result of some operation performed on it or in reg

Click Here to Read the rest of this document