M.H Kania, J.:— This is a reference under section 61(1) of the Bombay Sales Tax Act, 1959 (hereinafter referred to as “the said Act”), made at the instance of the Commissioner of Sales Tax. The question referred to us for our determination is as follows:
“Whether, on the facts and in the circumstances of the case, the Tribunal was justified in holding that the activity carried on by the respondent, viz., mixing of distilled water with methonol in certain proportion and selling the same as ‘Methimix’ does not amount to manufacture of goods within the meaning of section 2(17) of the Bombay Sales Tax Act, 1959?”
2. The respondent is a dealer registered under the said Act. By an application dated 14th October, 1971, made under section 52(1) of the said Act, to the Commissioner of Sales Tax, the respondent sought determination of the correct rate of tax payable on the sale of Methimix effected under a certain invoice, a copy of which was annexed to the application. The respondent applied for determination of the question as to whether mixing of distilled water with methonol amounted to manufacture of goods under section 2(17) of the said Act. The respondent further applied for the determination of the correct rate of tax payable on the sale of Methimix effected under the aforesaid invoice. The respondent purchased methonol from, the Fertilizer Corporation of India which is a registered dealer under the said Act. The methonol so purchased was mixed by the respondent with distilled water in the exact proportion of 45 per cent methonol and 55 per cent distilled water. This mixture was sold by the respondent under the name “Methimix”. It was stated in the said application that this mixture was a power augmentation fluid used for increasing power development by aviation engines and was principally used at the take-off stage. The Commissioner of Sales Tax came to the conclusion that mixing of distilled water with methonol in the circumstances aforesaid would amount to “manufacture” as defined in section 2(17) of the said Act, that the product Methimix was covered by entry 67 of Schedule C to the said Act and that it would be liable to the levy of sales tax at 12 per cent under section 8 of the said Act. The respondent preferred an appeal against this decision to the Sales Tax Tribunal. The Tribunal held that mixing of distilled water with methonol by the respondent as aforestated did not amount to “manufacture” within the meaning of the said term under section 2(17) of the said Act. In view of this conclusion, the Tribunal did not examine the question of the rate of tax payable on the sale of Methimix. The Tribunal set aside the order of the Commissioner of Sales Tax in the determination proceedings, holding that the respondent having purchased methonol from a registered dealer would be entitled to the benefit of resale while selling the diluted methonol in the way in which it had done. As no process of manufacture was involved, the sales by the respondent would amount to resales within the meaning of section 2(26) of the said Act and hence the amount of the said resales would be liable to be deducted from the taxable turnover under section 8 of the said Act. The question referred to us arises from this decision of the Tribunal.
3. Clause (17) of section 2 of the said Act gives a very extended definition to the term “manufacture”. The said clause reads thus:
“‘manufacture’, with all its grammatical variations and cognate expressions, means producing, making, extracting, altering, ornamenting, finishing or otherwise processing, treating, or adapting any goods; but does not include such manufactures or manufacturing processes as may be prescribed.”
4. We have no doubt that in view of the said extended definition, the mixing of methonol with distilled water in exact proportions and subjecting the mixture to laboratory test as has been done in the present case by the respondent would be covered in the description of the term “manufacture”, given in clause (17) of section 2 of the said Act. For example, mixing in such a manner would certainly amount to making the mixture or producing the mixture or treating methonol with water or adapting methonol for the use in question. The question which has to be really considered is whether such activity of mixing methonol with distilled water results in a commercially different commodity. As we have already held in Commissioner Of Sales Tax v. Dunken Coffee Manufacturing Co. [1975] 35 S.T.C 493., for an activity to amount to manufacture, it must result in a different commercial article or commodity. It must not be the commodity which is commercially the same as it was before the activity was applied to it. We have pointed out in that decision that the definition of the term “manufacture” in clause (17) of section 2 of the said Act is very wide and includes within its scope certain activities which in ordinary parlance cannot be considered as manufacture. The contention of Mr. Sheth, the learned Advocate for the respondent, is that even after methonol was mixed with distilled water by the respondent, the article still remained the same, namely, a mixture containing methonol and distilled water, and hence it could not be said that any new commercial commodity had been brought into being by the activity of mixing methonol and distilled water carried out by the respondent. In our view, this contention is totally unfounded. The description of the process of such mixing given by the respondent shows that the mixing is done in exact proportions and the mixture is even tested in a laboratory. This mixture is used for a specific purpose, viz., as power augmentation fluid mainly used in aeroplane engines for the purpose of take-off. The mixture is sold under a definite name, viz., Methimix. In these circumstances, it appears to us that it is beyond dispute that a new commercial commodity, viz., Methimix, has been brought into existence by the activity of mixing methonol with distilled water carried out by the respondent and the said activity of mixing methonol with distilled water carried out by the respondent does amount to manufacture within the meaning of clause (17) of section 2 of the said Act. Mr. Sheth has drawn our attention to our decision in Commissioner Of Sales Tax v. Bombay Mercantile Corporation. In that case, the respondent, a dealer in lubricating oils, purchased some drums of oil and after hand-blending the same sold the resultant mixture. It was held that this process carried out by the respondent in that case did not amount to “manufacture” within the meaning of section 2(17) of the said Act. In our view, this decision has no application to the case before us, because, as we have pointed out in that case, there was nothing on the record to show that any new or different commercial commodity came into existence as a result of the process of hand-blending applied to the oil purchased by the respondent therein, whereas, in the present case, as we have already observed, the mixing carried out by the respondent has resulted in a new commercial commodity which is sold in the trade name of Methimix.
5. In the result, the question referred to us must be answered in the negative. As far as the question of the rate of tax applicable to the sale of Methimix is concerned, that question has not been considered by the Tribunal and no question has been referred to us regarding the same. In view of this, it will be for the parties to make submissions before the Tribunal on this question and the Tribunal will determine the same in accordance with law. The respondent to pay to the applicant the costs of this reference fixed at Rs. 300.
6. Reference answered in the negative.