No. 80-2-286, Appeal from the Final Order entered April 30, 1980, of the Commonwealth Court of Pennsylvania entered at No. 1640 C.D. 1978.
Paul S. Roeder, Deputy Atty. Gen., for appellant.
Elliot A. Strokoff, Harrisburg, for appellee.
Roberts, Nix, Larsen, Flaherty and Kauffman, JJ. Roberts, J., filed a dissenting opinion in which Nix, J., joins. O'Brien, C. J., and Wilkinson, J., did not participate in the consideration or decision of this case.
In this case we are asked to determine whether an operator who sinks coal mine shafts and drives coal mine slopes for a soft coal extractor is engaged in the "manufacture" of personal property as that term is defined in the Tax Reform Code of 1971, 72 P.S. § 7201 et seq. The Commonwealth Court, in an appeal from an order of the Board of Finance and Revenue denying a refund to the taxpayer, issued a final order granting a refund to the taxpayer. We affirm.
The parties have submitted a stipulation of facts consisting of forty-six paragraphs and three exhibits.
Taxpayer, the R. G. Johnson Company (hereinafter Johnson), is in the business of sinking bituminous coal mine shafts and driving bituminous coal mine slopes. From September 23, 1974 to September 14, 1977, Johnson paid sales and use taxes totaling ninety-two thousand twenty-eight dollars and sixteen cents ($92,028.16) on the purchase and use of equipment and supplies consumed directly in the sinking of twelve (12) bituminous mine shafts and in the driving of one (1) bituminous mine slope.
Johnson seeks the exclusion allowed for sales and use of equipment and materials used in its operation claiming it is engaged in the manufacture of personal property which is defined in the applicable tax code section as follows:
(c) "Manufacture." The performance of manufacturing, fabricating, compounding, processing or other operations, engaged in as a business, which place any personal property in a form, composition or character different from that in which it is acquired whether for sale or use by the manufacturer, and shall include, but not [be] limited to --
(3) Refining, blasting, exploring, mining and quarrying for, or otherwise extracting from the earth or from waste or stock piles or from pits or banks any natural resources, minerals and ...