Manufacture under sales tax law includes processing cloth into a marketable product, even if the original material retains identity.

Printing and dyeing cloth purchased by a dealer was treated as manufacture under the Sales Tax Act because the statutory concept of manufacture covered human alteration or modification of materials that brought into existence a commercially saleable product. It was not necessary that the raw material lose its identity or become a wholly different substance. The prior recovery of sales tax on the original cloth did not prevent tax from being levied on the sale of the printed and dyed cloth. On that reasoning, the dealer was liable to sales tax on the processed goods.

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Issues: Whether printing and dyeing cloth purchased by a dealer amounts to manufacture within the meaning of the Sales Tax Act so as to attract liability to sales tax, and whether the fact that sales tax had already been recovered on the original cloth affects such liability.

Analysis: The Act distinguished between a manufacturer and a processor, but the absence of a notification levying tax on a processor did not assist the assessee because the real question was whether he was a manufacturer. The expression "manufacturer" in the Act was construed in the context of the statutory scheme, which taxed sales by dealers who produced goods for sale. For this purpose, it was not necessary that the raw material should lose its identity or that the resulting article should become commercially known as an entirely different substance. It was sufficient if the material was changed or modified by human skill so as to bring into existence a product capable of being sold in a marketable form. Printing and dyeing cloth purchased by the assessee produced a commercial commodity fit for sale, and the prior levy of tax on the original cloth did not prevent tax from being levied on the sale of the printed and dyed goods.

Conclusion: The assessee was a manufacturer within the Act and was liable to sales tax on the sale of printed and dyed cloth; the questions were answered against the assessee on the first two points and in favour of the revenue on the third.

Ratio Decidendi: For the purposes of a sales tax statute defining manufacturer in relation to goods produced for sale, manufacture includes altering or modifying materials so as to bring into existence a commercially saleable product, even if the original material retains its identity.

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