Manufacture in sales tax law includes converting oil into vanaspati when the process creates a commercially distinct commodity.

Conversion of oil into hydrogenated oil or vanaspati was treated as manufacture under section 2(ff) because the process produced a commodity with a distinct commercial identity, common parlance meaning, and separate use from raw oil. The Court distinguished earlier authority on whether hydrogenated oil remained oil for a different statutory purpose and held that it did not control the present sales tax question. Oil purchased for use in that manufacturing process was therefore liable to purchase tax under section 4.

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Issues: Whether conversion of oil into hydrogenated oil or vanaspati amounts to manufacture within section 2(ff) of the East Punjab General Sales Tax Act, 1948, so as to attract purchase tax under section 4.

Analysis: The statutory definition of purchase applied to acquisition of goods for use in the manufacture of goods for sale. The process of hydrogenating oil was held to bring into existence a commodity different in commercial identity from raw oil. The Court distinguished earlier decisions and held that the Supreme Court decision dealing with whether hydrogenated oil still remained oil for a different statutory purpose did not conclude the present question. On the facts, vanaspati was treated as a new and different substance in trade and in common parlance, with a distinct use and commercial existence from oil.

Conclusion: Conversion of oil into vanaspati amounts to manufacture, and the purchase of oil used for that process is liable to purchase tax. The petition fails and is dismissed.

Ratio Decidendi: Where processing converts raw material into a commercially distinct and marketable commodity with a different identity in trade and common parlance, the process constitutes manufacture for the purposes of a sales tax definition tied to manufacture.

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