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196 Goods & Services Tax Cases - Reports [Vol. 1 the agriculturists. The fee was already paid to the Mandi Samiti before having the gate-pass. However, the full address of the agriculturists were not possible. Sometimes, the sellers are small farmers who change their residence or came from the remote areas. No advance money is required for the contract. In some cases, the goodwill is sufficient to have a transaction with the ex-U.P. principals. No former contract is mandatory in the age of electronic era. In this regard, yardstick will have to be from businessman’s viewpoint as per the ratio laid down by the Hon’ble Supreme Court in CIT v. Walchand & Co. (P.) Ltd. [1967] 65 ITR 381. 8. In the light of above discussions, I agree with the order of the Tribunal where it was observed that the assessee being a commission agent has made the purchases of the goods for ex-U.P. principals. The grounds taken by the department are question of facts. No question of law is emerging from the impugned order of the Tribunal. Hence, the revision filed by the department is liable to be dismissed. 9. The revision is dismissed. [2010] 1 GST 196 (ALL.) HIGH COURT OF ALLAHABAD Commissioner, Trade Tax*, U.P. v. Ramco Coke Industries RAJES KUMAR, J. TRADE TAX REVISION NO. (1970) OF 1998 OCTOBER 27, 2009 MANUFACTURE - Assessment year 1989-90 - Assessee was engaged in business of manufacture and sale of hard coke - It claimed that manufactured hard coke was not liable to tax because it was manufactured out of tax paid coal and both coal and hard coke were same commodities - Hard coke was manufactured by assessee after processing of coal breeze and it was commercially known as a different commodity than coal/coal breeze - Whether since process involved in converting coal into hard coke was process of ‘manufacturing’ within ambit of section 2(ee), assessee was liable to pay tax on sale of hard coke being manufacturer *In favour of revenue. GOODS & SERVICES TAX CASES ❑ JANUARY 20 - FEBRUARY 4, 2010 ◆ 72 ■■ A B C D E F G
2010] Commissioner, Trade Tax v. Ramco Coke Industries (All.) 197 A B C D E F G of same - Held, yes [Section 2(e-1) read with section 2(ee) of U.P. Trade Tax Act, 1948] FACTS The assessee was engaged in the business of manufacture and sale of hard coke. It claimed that the manufactured hard coke was not liable to tax because it was manufactured out of the tax paid coal and both coal and hard coke were the same commodities. The assessing authority having found that the hard coke was manufactured by the assessee after the processing of coal breeze held that both coal and hard coke were two different commodities and the assessee being manufacturer of hard coke was liable to pay tax on the sale of hard coke. On appeal, the Deputy Commissioner (Appeals) upheld the action of the assessing authority. On second appeal, the Tribunal held that the coal and hard coke were not two different commodities but were the same commodity and that since hard coke was made out of the tax paid coal, it was not further liable to tax. It, therefore, allowed the claim of the assessee. On revision : HELD It is clear that the coal breezes are being burnt at a specific temperature to remove the impurities from the coal and as a result of such burning process hard coke is obtained. Hard coke is a highly combustible item. Though breezes and hard coke both are used as fuel but hard coke is used for specific purposes being highly combustible. [Para 7] The definition of ‘manufacture’ as indicated in section 2(e-1) includes ‘processing, treating or adapting any goods’. Thus, the meaning of “manufacture” in the U.P. Trade Tax Act is wider. A dealer will be liable to pay tax on sale of any goods which he makes by processing, treating or adapting the goods he purchased. [Para 9] In the instant case, admittedly the coal breeze was being burnt at a specific temperature to remove the impurities from the coal. It involved some process. By process of burning, the coal ceased its original character. Hard coke which was obtained out of the aforesaid process was highly combustible and was commercially known as a different commodity than the coal. Therefore, the process involved in converting coal into hard coke was the process of ‘manufacturing’ within the ambit of section 2(ee). [Para 21] Therefore, the assessee was liable to pay tax on the sale of hard coke being the manufacturer of hard coke. [Para 22] Hence, the order of the Tribunal was erroneous and was liable to be set aside. [Para 23] GOODS & SERVICES TAX CASES ❑ JANUARY 20 - FEBRUARY 4, 2010 ◆ 73
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