Short Note : The assessee is a partnership firm which carries on business in grains. The assessee also owns a rice mill. The assessee was made liable for purchase tax on purchases of paddy under section 7 of the Act. The assessee's contention was that it did not consume the paddy purchased by it in the manufacture of other goods for sale within the meaning of section 7 of the Act and, therefore, it was not liable for purchase tax. The contention raised by the assessee was negatived by the Sales Tax Authorities and also by the Tribunal. On an application made by the assessees, the following questions of law were referred to the High Court :- "(1) Whether conversion of paddy into rice amounts to 'manufacture' within the meaning of section 2(j) of the M.P. General Sales Tax Act, 1958 ? (2) On the facts and circumstances of the Case, whether levy of purchase tax on paddy purchased by the assessee was justified under section 7, even though the assessee was required to supply during the relevant period all the rice manufactured by him to the Government under a statutory levy Order ?" Held : As regards question No. (1), the answer is covered by the decision of a Division Bench of this Court in the case of M/s. Laxmichand v. Commissioner of Sales Tax, M.P., 1971 RN 10 : 1971 JLJ 69 : 1971 MPLJ 21 . In view of this decision, it has to be held that conversion of paddy into rice is manufacture within the meaning of section 2(j) of the Act. 2. Coming to the second question, the assessee's contention is that as all the rice manufactured by it was supplied to the Government, there was no sale of manufactured goods and, therefore, it did not consume the paddy in the manufacture of other goods for sale within the meaning of section 7 of the Act. The assessee had to sell the rice to the Government under the Madhya Pradesh Rice Procurement (Levy) Order, 1960. The sale of rice under this Order to the Government, in the opinion of the Board of Revenue, did not amount to sale within the meaning of section 7 of the Act. The assessee had to sell the rice to the Government under the Madhya Pradesh Rice Procurement (Levy) Order, 1960. The sale of rice under this Order to the Government, in the opinion of the Board of Revenue, did not amount to sale within the meaning of section 7 of the Act. It is very doubtful if this view is correct in view of the recent decision of the Supreme Court in Vishnu Agencies v. Commercial Tax Officer, AIR 1978 SC 449 . We, however, do not find it necessary to examine this question. Assuming that the sale of rice under the Rice Procurement Levy Order did not amount to sale within the meaning of section 7, still it is clear to us that the assessee consumed the paddy purchased by it "otherwise" within the meaning of section 7 and is thus liable to purchase tax. The condition of liability of purchase tax under section 7 is that the assessee "either consumes such goods in the manufacture of other goods for sale or otherwise or disposes of such goods in any manner other than by way of sale in the State or dispatches them to a place outside the State except as a direct result of sale or purchase in the course of inter-State trade or commerce". In the instant case, we have assumed that the assessee did not consume the goods purchased by it in the manufacture of other goods for sale. But that makes no difference for it is clear that the goods were otherwise consumed by the assessee. The assessee is therefore, clearly liable for payment of purchase tax. In our opinion, the view taken by the Board of Revenue is correct. Reference answered accordingly.