Manufacture under sales tax exemption applies where tobacco leaves are transformed into a distinct commercial commodity.

Crushed and sieved tobacco was treated as having undergone a process of manufacture for sales tax purposes. The court interpreted the exemption notification phrase "subjected to any process of manufacture" in its ordinary sense, not by reference to the special definition in the Central Excises and Salt Act, 1944. Applying the test of whether a commercially different article emerges, it found that crushing and sieving tobacco leaves produced a distinct commercial commodity with a different name. The exemption for tobacco leaves not so processed therefore did not apply, and the issue was decided against the assessee.

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Issues: Whether crushed and sieved tobacco was exempt from sales tax under the exemption notification on the footing that it was tobacco leaves not subjected to any process of manufacture.

Analysis: The expression "subjected to any process of manufacture" in the sales tax notification had to be understood in its ordinary sense, not by the special definition of manufacture in the Central Excises and Salt Act, 1944. Applying the settled principle that manufacture involves bringing into existence a commercially different article, the Court held that crushing and sieving tobacco leaves produced a distinct commercial commodity known by a different name. The fact that the original material retained its essential nature did not prevent the process from being manufacturing.

Conclusion: Crushed and sieved tobacco was held to be subjected to a process of manufacture and therefore did not fall within the exemption for tobacco leaves not so subjected. The question was answered in the negative, against the assessee and in favour of the revenue.

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