SHANMUKHAM J.


All these tax cases concern the construction of s. 5(1)(xxxii) of the W.T. Act, 1957; indeed, the question referred is the same in all these cases. It is advantageous to examine s. 5(1)(xxxii) of the W.T. Act and to understand its cope before applying the same on various sets of facts as disclosed in all these cases. The relevant part of s. 5(1)(xxxii) with which we are concerned in all these cases reads as follows :


"5. (1) 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."


The Explanation which defines" industrial undertaking"reads thus :


" For the purpose 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." *


We are more concerned with the definition of "industrial undertaking". It is, therefore, necessary to closely examine the Explanation. The Explanation can be sub-divided thus :


(i) "Industrial undertaking" means an undertaking engaged in the business of generation or distribution of electricity or any other form of power;(ii) "An industrial undertaking" means an undertaking engaged in the construction of ships;


(iii) "An industrial undertaking" means an undertaking engaged in manufacture or processing of goods; and


(iv) "An industrial undertaking" means an undertaking engaged in mining.


The expression "in the business" is attributable only to generation or distribution of electricity or any other form of power but not to the subsequent clauses referred to in the section. Therefor, the word "business" is not attributable to the manufacture or processing of goods referred to in the Explanation.


It is necessary to state here that the Tribunal in all these cases proceeded on the basis that the word "business" was referable also to manufacture or processing of goods. In our opinion, according to the plain grammar, the word "business" would be attributable only to "generation or distribution of electricity" but not to "the manufacture or processing of goods." It is true that the Supreme Court has expressed that the word "business" is of the widest amplitude and, therefore, will take in any activity in the process of manufacture. But, as already pointed out by us, in all these cases we are only concerned whether there had been any manufacture or processing of goods but not the business of manufacturing or processing of goods. In this view, there is no need to follow the meaning attributed by the Supreme Court to the word "business".


What we are not concerned is, what is meant by "engaged in manufacturing or processing of goods". In our considered opinion, "engaged in manufacturing" postulates the assessee's direct involvement in the manufacture. It may not be necessary that the assessee himself should be personally engaged but it is enough that he employs his own labourers. We are not prepared to accept the contention advanced by the assessee that though the goods are not manufactured by an outside agency, the assessee can be said to manufacture the goods on the contention that the assessee pays for the manufacture or feeds the expenses incurred in the maintenance of the looms. So also the mere fact that the assessee had given instructions or specifications to the weavers indicating the quality of goods will not in any way better the case of the assessee. It is also contended on behalf of the assessee that such a specification given to the outside agency for the preparation of textile goods will mean that the assessee had control over the quality of the goods. The expression "engaged in manufacture", as already pointed out by us, indicates that the assessee should be directly involved in the manufacturing process and it will not include the cases where he gets the goods prepared by an outside agency.At the same time, we are not inclined to accept the argument of the Revenue that even though the assessee is responsible for a processing, the assessee would not be entitled to the benefits contemplated under the above provision. If we turn to the Explanation extracted above, the word used is "processing of goods". It does not predicate that it should be all the processes resulting in the end manufacture. Further, it cannot be disputed that the end manufacture may involve several processing. We are, therefore, of the opinion that if the assessee has done any processing, which ultimately brought about the product, he is entitled to avail of the above provision. We find support from the decision reported in CIT v. Commercial Laws of India Pvt. Ltd. The learned judge, who spoke for the Bench, has observed thus (p. 825) :


"The short point to be considered is whether the folding and stitching of the printed sheets would come within the scope of 'processing of goods'. The learned counsel for the Revenue submitted that this is a case where there are actually no operations of manufacture conducted by the assessee-company. The printing having been done by a different concern, the question as to whether the assessee has been carrying on the business of manufacture would not arise on the facts here. However, the expression used in section 2(6)(d) is "manufacture or processing of goods". Therefore, it is enough if the assessee, in order to get the benefit of this provision, is engaged in the 'processing of goods.' The goods in the present case would be the parts or volumes of Sales Tax Cases. The 'processing' engaged in by the assessee is to fold and stitch the printed sheets and convert them into parts or books, as the case may be, which were later on dispatched to the subscribers. This, in our opinion, would constitute 'processing of goods' so as to come within the scope of section 2(6)(d) of the Finance Act, 1968." *


No doubt, the learned judges were concerned with s. 2(6)(d) of the Finance Act, 1968. But, we can take inspiration from such a reasoning of the Division Bench of this court. We are not adverting to, in detail, the other decision cited at the Bar, viz., Addl. CIT v. Chillies Export House Ltd. to which one of us was a party. That related to s. 2(6)(c) of the Finance Act. That Bench was concerned with the question whether the assessee was mainly engaged in the continued course of activity of processing and whether the assessee can be treated as an individual company within the definition. In the instant case, such a question does not arise.


With reference to the citations, viz., Addl. CIT v. A. Mukherjee and Co. (P.) Ltd. Orient Longman Ltd. v. CIT and CWT v. Smt. Premlatabai they relate to the publication of books. In our view, the manufacture or processing involved in the publication of books are peculiar and, therefore it is not safe to look for guidance to the principles laid down therein. We, therefore exclude from our consideration the above citations.


Having set the law thus, let us approach the facts in each case. Incidentally it has to be stated that in all these cases the assessing authority rejected the claim for exemption holding that none of the assessees was engaged in the manufacture while save in T.C. No. 394/78 and T.C. No. 153/80, the AAC concurred with the assessing authority, while in the rest he accepted the assessee's claim for exemption following the decision of the Appellate Tribunal in the meanwhile.


T.C. Nos. 1369 and 1370 of 1977 : The facts, as could be culled out from the records, are that the assessee purchases art silk yarn, dyes, lace, etc., and gives to the weavers to convert them into cloth for which weaving charges, dyeing charges, etc., are paid. The cloth so manufactured is being sold by the assessee. As already pointed out by us, the Tribunal, relying on the definition expressed by the Supreme Court regarding the word "business", held that even though the cloth was loomed by outside agency, still it can be stated as a part of the activity in the process of manufacturing attributable to the assessee. But, we have held, that is not the correct understanding of the section and the word "business" has no impact at all on the expression "engaged in the manufacture or processing of goods". On the facts and applying the principle of law referred to above, we have necessarily to hold that the assessee cannot be said to have been engaged in the manufacture or processing of goods. With reference to the request for remand, we will be dealing with it at the end of this judgment in common. In the view we have taken, we have to disagree with the Tribunal and answer the question in the negative and in favour of the Revenue.T.C. No. 1351 of 1977 : The assessee, in this case, is a partner in the firm, M/S. K. A. Veeri Chetty & Son. No doubt, from the facts set out in this case, it is not brought out that this particular partnership firm was engaged in cleaning, reeling, cutting, etc., of the art silk yarn and the cutting of cloth brought by the weavers and then folding and packing the same for sale. But in T.C. No. 153 of 1980, a partner of the same firm was the assessee. We are of the view that cleaning, reeling, cutting, etc., are processes within the meaning of the definition "industrial undertaking". We, therefore, hold that the assessee in this case, a partner of the said firm, is equally entitled to the benefit of the said provisions. As all these materials are dealt with in common under a common order, we cannot escape noticing the processing activities of the said firm as expressly revealed in T.C. No. 153 of 1980. In the above view, the assessee is entitled to the benefit of the said provision. Accordingly, the question is answered in the affirmative and against the Revenue.


T.C. Nos. 1386 and 1604 of 1977 : The same set of facts as in the first two cases are present in these cases as well. Following our view in the preceding cases, we hold that the assessee cannot be said to be engaged in the manufacture or processing of goods to claim the benefit of s. 5(1)(xxxii) of the W.T. Act. The result is, the question is answered in the negative and against the assessee.


T.C. No. 186 of 1978 : The assessee, in this case, is a partner in two firms, M/s. Goodwill and company, Pondicherry, and M/s. V.G.L. Company, Cuddalore. So far as M/s. Goodwill & Co. is concerned, the facts are similar to those referred to in the preceding cases other than T.C. No. 1351/77. Therefore, we have to answer the question in the negative and against the assessee.With reference of M/s V.G.L. Company, it is common ground that roughly half of the work was done by master weavers and the rest was done in the looms operated in the factory belonging to the partnership itself. The expression used is, if the assessee is engaged in the manufacture of processing of goods, it will be an industrial undertaking. There is no limitation imposed under the provision prescribing that unless the whole manufacturing is done by the assessee, he cannot avail of the exemption. As long as the word is generally used, we will have to take entitled to take advantage of this provision. In that view, we hold that so far as V.G.L. Company is concerned, it is said to be engaged in the manufacturing of the goods. Therefore, we answer the question in the affirmative and in favour of the assessee.


T.C. No. 187 of 1978 : The facts are identical as in T.C. No. 186 of 1978, except that it relates to another partner of the two partnership firms, viz., Goodwill & Company and V.G.L. Company. We, therefore, answer the question in the same manner as we have done in T.C. No. 186 of 1978.


T.C. Nos. 384 and 385 of 1978 : The facts reveal that the firm, Arthanari Pandaram, in which the assessee is a partner, was engaged in dyeing yarn and also twisting yarn. We have held that the manufacturing may contain a series of processing and if the assessee is directly involved in any of the processing, he will be said to have been engaged in processing of goods. We have already held that it is not necessary that the assessee should be engaged in all the stages of processing resulting in the end manufacture. Therefore, we hold that the assessee is engaged in processing of goods; in that event, he is entitled to call to his aid s. 5(1)(xxxii). The question is thus answered in the affirmative and against the Revenue.T.C. No. 394 of 1978 : The facts disclose that the assessee purchases yarn and other raw materials and handed them over to the weavers for preparing the finished goods. This, we have held, will not tantamount to being engaged in the manufacture or processing of goods, Then, we have no option but to answer the question in the negative and against the assessee.


T.C. No. 153 of 1980 : It is seen from the records that the assessee's employees were cleaning, reeling, cutting, etc., of the art silk yarn and cutting the cloth brought by the weavers and then folding and packing the same for sale. Therefore, we hold that the assessee is engaged in processing the goods. We have already pointed out that the assessee is engaged even in anyone processing, if several processing were necessary in the manufacture of g

oods, yet, he is entitled to take advantage of the exemption. Here, we find that the assessee is directly involved in several processing. We, therefore, answer the question in the affirmative and against the Revenue. T.C. Nos. 630 and 631 of 1981 : The business of the assessee in these cases consisted of purchasing art silk yarn, dyes, lace etc., and giving them to the handloom weavers, who make clothes for wages and selling such clothes, as finished products. It cannot be said that the assessee is said to be engaged in the manufacture or at lease processing the goods. We, therefore, answer the question in the negative and against the assessee. The tax cases are disposed of accordingly. We make no order as to costs. Regarding the request of the assessees for a remand on the ground that the Tribunal made an erroneous approach in concentrating itself on the understanding of the word "business" as governing the manufacture or processing of the goods, we find, there are no valid grounds to sustain any order of remand. It is seen from the records that in some of the cases, the assessees took the trouble of disclosing a series of processing in which the assessee was directly involved. So far as the facts are concerned, it is the primary duty of the assessee or any party to the proceedings to disclose without any demur. It he had not chosen to disclose, he should take the responsibility on himself but that cannot be urged as a point in his favour. We therefore, decline that request made for remand.