Raw tobacco remains unchanged after minor processing; soaking, drying and powdering do not amount to manufacture under sales tax law.

Minor preparatory processing such as soaking tobacco in sugar water, drying, beating and powdering does not by itself convert raw tobacco into a manufactured product under the Madras General Sales Tax Act. The court applied the statutory distinction between raw tobacco taxable at first purchase and manufactured tobacco products taxable at first sale, and held that the steps described did not create a substantially different commercial article or amount to manufacture within section 5(vii). Tobacco therefore retained its character as raw tobacco within section 5(viii), and the assessment was restored.

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Issues: Whether tobacco processed by soaking in sugar water, drying in shade and powdering ceased to be raw tobacco under section 5(viii) of the Madras General Sales Tax Act and became a product manufactured from tobacco under section 5(vii).

Analysis: The distinction drawn by the statutory scheme is between raw tobacco taxable at the point of first purchase and manufactured products from tobacco taxable at the point of first sale. Earlier decisions had held that mere soaking in jaggery water or similar treatment, without further substantial processing, did not by itself convert raw tobacco into a manufactured product. On the facts found, the only processes were soaking in sugar water, drying, beating and powdering. Those steps did not bring about a transformation into a different commercial product or amount to the kind of manufacture contemplated by section 5(vii).

Conclusion: The tobacco retained its character as raw tobacco within section 5(viii) and did not fall within section 5(vii).

Final Conclusion: The revision succeeded, the Tribunal's view was set aside, and the assessment made by the authority below was restored.

Ratio Decidendi: Minor preparatory processes such as soaking, drying and powdering do not, by themselves, convert raw tobacco into a manufactured product unless the resultant goods become a substantially different commercial article.

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