Manufacture requires real transformation: processed tundu tobacco remained raw tobacco and was not taxed as chewing tobacco.

Tundu tobacco sprinkled with jaggery water, cut into smaller pieces and packed for sale did not undergo a transformation into a commercially different product. Manufacture requires a change in form, quality or utility, and mere handling or division into sale units is insufficient. The tobacco therefore remained raw tobacco rather than a manufactured chewing tobacco product, and tax liability could not be imposed on that basis under the relevant sales tax provision.

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Issues: Whether tundu tobacco, after sprinkling with jaggery water, cutting into pieces, and packing for sale, became a manufactured product taxable as chewing tobacco under section 5(vii) of the Madras General Sales Tax Act, or remained raw tobacco taxable only under section 5(viii).

Analysis: The accepted facts showed that no ingredient other than jaggery water was added and that the sprinkling process was common even in the handling of raw tobacco. The Court held that the processes of sprinkling, cutting into small pieces, and packing did not bring about a change in the article itself or convert it into a product commercially different from the raw tobacco. Manufacture, as understood in the decided cases, requires a transformation of the original material into something different in form, quality, or utility, and mere division into smaller sale units does not satisfy that test.

Conclusion: The tobacco sold by the assessees was not a manufactured product within section 5(vii) and was not liable to tax on that footing. The petitions were allowed with costs.

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