Silicon carbide is a unique material for the study of process of defect generation and crystallization. In this paper, for the first time, we report the observation of the entrapment of whiskers and dendrites (tree-like defects) within the volume of the growing monocrystalline SiC. The encapsulation of the tree-like defects in the volume of the grown crystal leads to solid state polytype transformation. According to Oswald rule, the most probable transformation sequence is as follows: 2H→3C→xR→4H, 6H until a stable phase is established for the given conditions of crystal growth. We observe that the entrapments of tree-like defects are the source of SiC defects such as micropipes and planar defects. It is very likely that the above process is also the source of dislocations. Practically, every branch of the tree-like structure generates the above mentioned defects (micropipes, planar defects, etc.). Our investigation (by EDAX) shows that the chemical composition of the tree-like defect is the same as that of bulk SiC. In this paper, we will present the mechanism of the entrapment of the tree-like defects in the bulk crystal.