In Brief
Hindustan Petroleum Corporation Limited and related companies bottled Liquefied Petroleum Gas (LPG) into cylinders for domestic use and claimed tax deductions under the Income Tax Act as industrial undertakings. The Income Tax authorities denied the deduction, arguing that bottling did not constitute 'manufacture' because no chemical change occurred. The Supreme Court dismissed the Department's appeals and held that LPG bottling constitutes 'production'—a term wider than 'manufacture'—under the relevant tax provisions. The complex multi-stage bottling process transforms unusable LPG vapour from refineries into a commercially viable, domestically usable product, making the assessees eligible for the claimed deductions.
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