1. What is an "industrial undertaking " within the meaning oi Section 5(l)(xxxi) of the W T. Act and whether a groundnut oil mill, which extracts oil by crushing groundnut kernel is an " industrial undertaking " are the questions which are to be answered in this writ petition.

2. The petitioner is a partner of M/s. Mahalakshmi Groundnut Oil Mills, Dharmavaram, which carries on business of crushing groundnut kernel and extracting oil therefrom. The question now is whether his interest in the said Mahalakshmi Groundnut Oil Mills valued at Rs. 1,08,757 is exempt from wealth-tax under Section 5(1)(xxxii) read with the Explanation to Section 5(1)(xxxi). There is no dispute in regard to the value of the writ petitioner's interest in the said mill. The only dispute is whether the mill is an " industrial undertaking ". However, it must be noticed that before the assessing authority this exemption was not claimed ; nor was it claimed before the appellate authority, viz., the AAC. But in a revision under Section 25 of the W.T. Act before the Commissioner this exemption was claimed and the Commissioner ruled that the undertaking is not an " industrial undertaking " within the meaning of Section 5(1)(xxxi) so that the relief postulated by Clause (xxxii) can be given to the petitioner. Hence, this writ petition by the assessee.

3. We will now read section 5(1)(xxxii) and (xxxi). section 5 occurs under the title " Exemption in respect of certain assets. " Section 5(1) says :

" Subject to the provisions of Sub-section (1A) wealth-tax shall not be payable by an assessee in respect of the following assets, and such assets shall not be included in the net wealth of the assessee--...

(xxxii) the value, as determined in the prescribed manner, of the interest of the assessee in the assets (not being any land or building or any rights in any land or building or any asset referred to in any other clause of this sub-section) forming part of an industrial undertaking belonging to a firm or an association of persons of which the assessee is a partner or, as the case may be, a member. "

4. The expression " industrial undertaking " is denned in the Explanation to Clause (xxxi). The Explanation reads thus :

" For the purposes of Clause (xxxa), this clause, Clause (xxxii) and Clause (xxxiv), the term ' industrial undertaking ' means an undertaking engaged in the business of generation or distribution of electricity or any other form of power or in the construction of ships or in the manufacture or processing of goods or in mining."

5. There is no dispute about the fact that the petitioner has an interest in this oil mill of the value of Rs. 1,08,757. The exemption is claimed under clause (xxxii) of section 5(1) in respect of this Rs. 1,08,757 alone. In this connection, we may usefully refer to Sub-section (1A) of Section 5 which says that nothing contained in Sub-section (1) shall operate to exclude from the net wealth of the assessee any assets referred to, amongst other clauses, in Clause (xxxii) to the extent the value thereof exceeds, in the aggregate, a sum of one hundred and fifty thousand rupees. Since the value of the interest is admittedly Rs. 1,08,757 only, the exemption that is now claimed does not come within the ambit of Section 5(1A).

6. The Commissioner ruled and the learned standing counsel for the revenue contends that this oil mill is not an " industrial undertaking" within the meaning of the Explanation to Clause (xxxi) and that it is only a " trading concern ". On the other hand, learned counsel for the petitioner contends that since in this oil mill there is clearly manufacture of groundnut oil and groundnut cake and processing of groundnut kernel into oil and cake, it is an "industrial undertaking", and that since that groundnut kernel is purchased and the resultant groundnut oil and groundnut cake are sold, it is also a trading concern. Indeed, any industrial undertaking, for that matter and particularly so, the industrial undertaking mentioned in the Explanation to cl, (xxxi) also partake of the characteristics of a trading concern When electrical power or any other power is generated and distributed it is a business enterprise. Indeed, the word " business " is used while giving the meaning of the industrial undertaking. Simply because there is purchase and sale, which is inevitable in any undertaking of any industrial establishment, that establishment does not cease to be an "industrial undertaking", if it otherwise has the characteristics which are enunciated in the Explanation. Therefore, the argument that it does business and, therefore, it is only a trading concern cannot be accepted.

7. Then the question is whether this oil mill, which admittedly crushes groundnut kernel and extracts oil therefrom, is an '' industrial undertaking". Going by the plain language used in the Explanation, it is reasonable to come to the conclusion that the oil mill in which the petitioner has an interest is engaged in the manufacture or processing of goods, viz., groundnut oil and groundnut cake. Groundnut kernel is put in the crusher and the kernel is crushed out of which marketable commodities, viz., groundnut oil and groundnut cake, come into existence. There is thus a complete transformation of the shape and form of the original groundnut kernel. In the place of groundnut kernel, groundnut oil and groundnut cake come into being. There is thus a total alteration or change in the goods. It results in the loss of identity of the original goods, viz , groundnut kernel. Therefore, in the groundnut oil mill in which the petitioner is a partner, manufacture of oil and groundnut cake is being done.

8. We may usefully refer to three or four decisions in this respect. The Supreme Court itself has clarified the meaning of the expression " manufacture " though in a different context. In Devi Dass Gopal Krishnan v. State of Punjab [1967] 20 STC 430, the Supreme Court held, though dealing with a sales tax matter, that when oil is produced from oilseeds, the process certainly transforms raw material into a different article for use and oilseeds can, therefore, be said to be used in the manufacture of goods.

9. In Commr. of S.T. v. Harbilas Rai & Sons [1968] 21 STC 17 (SC), once again relating to a sales tax matter, the Supreme Court observed that the word " manufacture " has various shades of meaning and in the context of sales tax legislation, if the goods to which some labour is applied remain essentially the same commercial article, it cannot be said that the final product is the result of manufacture. They were considering the case of pig bristles which were boiled and washed with chemicals and sorted according to their size and colour. The Supreme Court held that there was no manufacture. But at the same time the Supreme Court laid down the guiding principle for determining what is "manufacture". In the observation to which we have already referred, the idea is clearly brought out, viz., if the goods to which some labour is applied remain essentially the same commercial article, it is not " manufacture ". If the goods change substantially, then it is " manufacture ". As we have said, by crushing groundnut kernel the kernel disappears and, instead, oil and groundnut cake come into existence. While enunciating the characteristic of manufacture the Supreme Court followed the earlier decision in Devi Dass Gopal Krishnan v. State of Punjab .

10. These decisions fully support the view we have taken that in the oil mill in which the petitioner has a share, manufacture of groundnut oil and groundnut cake is being done.

11. Further, the other requirement of the limb, viz., processing of goods also exists in this case. In common parlance, by processing of goods, it is meant that the goods are dealt with either mechanically or by manual labour and something is done to them to change them into some other article or to keep them fine or clean. This aspect is clearly explained by the Kerala High Court in CIT v. Casino (Pvt.) Ltd. . The Division Bench was referring to the same expression " manufacture or processing of goods ". Subramonian Poti J., who spoke for the Division Bench, explained the meaning of the word " manufacture " as a process which results in an alteration or change in the goods which are subjected to such manufacture. When a commercially new article is produced, that production may be by manual force, mechanical force or even by nature's own process such as drying by heat of the sun as in a salt pan. But the real test is to see whether a commodity, which in a commercial sense is different from the raw material, has resulted due to the manufacture. Then adverting to the expression " process " the learned judge observed that it has in one sense a wider meaning than the even word " manufacture ". Referring to the four categories to whom certain benefits were given under the Finance Act, 1968, it was pointed out that the reference is only to the manufacturing concerns as against trading concerns. The learned judges held that a hotel is only a trading concern and preparation of food materials in a hotel cannot be called a " manufacture or processing of goods".

12. The Madras High Court had to consider the scope of the words " processing of goods " in CIT v. Commercial Laws of India Pvt. Ltd. [1977] 107 ITR 822. Theie the assessee folded and stitched the printed sheets. The question was whether it was processing of goods. The learned judges held that though the printing of the sheets was done by a different concern and, therefore, there was no question of the assessee carrying on any " manufacture", the folding and stitching of the printed sheets would constitute " processing of goods " so as to fall within the scope of Section 2(6)(d) of the Finance Act, 1968.

13. If groundnut kernel is put in the crusher and the crusher is operated on account of which the kernel is crushed and oil and groundnut cake are extracted therefrom, it is certainly " processing of goods". Thus, the groundnut oil mill in which the petitioner has an interest of Rs. 1,08,757 is certainly an "industrial undertaking " within the meaning of Clauses (xxxi) and (xxxii) because in it there is not only " manufacture " but also " processing of goods".

14. However, learned counsel for the revenue tries to get over this application of the exemption by calling it a " trading concern ". We have already rejected this contention by saying that it, is essentially an "industrial undertaking ", though it is also a " trading concern " in the sense that it purchases groundnut kernel and sells the manufactured or processed goods. But it does not for that reason go out of the ambit of the definition of the expression " industrial undertaking " contained in the Explanation to Clause (xxxi).

15. Learned revenue's counsel also contends that the four categories mentioned in the Explanation should be understood as being in the nature of ejusdem generis. This doctrine of ejusdem generis, we are afraid, cannot be applied to the Explanation, In it, there are four categories of undertakings mentioned. One is generation or distribution of electricity or any other form of power, the second is construction of ships, the third is in manufacture or processing of goods and the fourth is mining. One class stands apart from the other three. It is impossible to introduce the doctrine of ejusdem generis into this Explanation because it is impossible to say by any stretch of imagination that they belong to a single category.

16. Learned counsel for the revenue relies on certain observations in Bindra's Interpretation of Statutes, 6th edn., at p. 286. But the same learned author points out that before the rule of ejusdem generis can be applied, it is necessary that there must be a distinct genus which must comprise more than one species. Further, the general words are not restricted in meaning to objects ejusdem generis if there is a clear manifestation of contrary intent. While the rule of ejusdem generis is a well-established and useful one, it is, like other canons of statutory construction, only an aid to the ascertainment of the true meaning of the statute. The rule shall not be applied if it results in a construction inconsistent with the statute's legislative history, other controlling rules of construction or statutes in part materia.

17. These principles pointed out by the learned author do not help the revenue's learned standing counsel. On the other hand they are against the application of the rule in the understanding of the Explanation. Patently, Parliament intended to give exemption up to a limit prescribed in Sub-section (1A) of Section 5 to the four categories of the industrial undertakings mentioned in the Explanation to Clause (xxxi). Moreover, it is under Clause (xxxii) the exemption is given for the value of the interest of the assessee in the assets forming part of an industrial undertaking belonging to a firm or an association of persons of which the assessee is a partner or, as the case may be, a member. In our view, it would be wholly inappropriate and untenable if the doctrine of ejusdem generis is introduced into the Explanation to Clause (xxxi). Each one of the four is an independent category by itself. Therefore, we have no hesitation in repelling this contention advanced by the revenue.

18. Learned revenue's counsel also contends that since the petitioner did not raise the question either before the assessing officer or before the AAC, he is estopped from raising this contention now. We cannot accept this. This was raised in the revision before the Commissioner under Section 25 and the Commissioner has considered this contention on its merits. It is not for the first time that the petitioner raises it in the writ petition. Further, there cannot be an estoppel of this nature.

19. The above discussion shows that the groundnut oil mill in which the petitioner has an interest of the value of Rs. 1,08,757 is an " industrial undertaking" and to the extent of the said amount, he is entitled to exemption. The writ petition is, accordingly, allowed. Since, there is no direct decision on this question, we direct the parties to bear their own costs.