Paddy and rice as distinct goods: purchase tax applies when paddy is bought and rice is later sold after milling.

Paddy and rice are treated as distinct goods in ordinary parlance, and dehusking or milling changes the identity of the goods. Applying that settled principle, purchase tax under section 5A of the Kerala General Sales Tax Act, 1963 becomes exigible on the purchase of paddy even where the assessee later sells rice produced from it. The Court noted that the decision relied on by the assessee did not depart from this established view, and the assessee remained liable to purchase tax.

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Issues: Whether an assessee who purchases paddy, has it husked, and sells rice produced therefrom is liable to purchase tax under section 5A of the Kerala General Sales Tax Act, 1963.

Analysis: The Court reiterated that paddy and rice are distinct goods in ordinary parlance and that the process of dehusking or milling brings about a change in the identity of the goods. It relied on earlier decisions holding that rice produced from paddy is different from paddy and that purchase tax becomes exigible on the purchase of paddy. The decision cited by the assessee was held not to have departed from that settled view.

Conclusion: The assessee is liable to purchase tax under section 5A of the Kerala General Sales Tax Act, 1963, and the appeal fails.

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