Commercial identity test governs purchase tax remission: processed raw tobacco became a different commodity, defeating the rule's benefit.

Remission of purchase tax under rule 12(1A) depended on the goods purchased and the goods despatched remaining commercially the same commodity. The Court held that raw tobacco, after being cleaned and graded into bidi pattis, lost that commercial identity and became a different commodity, even if some basic physical properties remained unchanged. The rule was therefore not satisfied merely because the processed goods were sold outside the State. The benefit was confined to cases where the purchased goods were despatched in the same commercial form. The claim for remission was rejected because raw tobacco and bidi pattis were not the same goods.

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Issues: (i) Whether remission of purchase tax under rule 12(1A) of the Bombay Sales Tax (Exemptions, Set-off and Composition) Rules, 1954 was available when raw tobacco purchased on payment of purchase tax was processed into bidi pattis and thereafter sold outside the State; (ii) whether the goods sold could be treated as the same goods as the goods purchased for the purpose of the rule.

Issue (i): Whether remission of purchase tax under rule 12(1A) of the Bombay Sales Tax (Exemptions, Set-off and Composition) Rules, 1954 was available when raw tobacco purchased on payment of purchase tax was processed into bidi pattis and thereafter sold outside the State.

Analysis: The rule granted remission only when the goods purchased on which purchase tax had been paid were despatched outside the State within the stipulated time. The Court held that the condition was not satisfied merely because the goods retained their basic essential properties after processing. What mattered was whether the goods sold were commercially the same commodity as the goods purchased. Raw tobacco, after being cleaned and graded into bidi pattis, became a different commercial commodity. Decisions relied upon for the assessee did not assist because they turned on different statutory language and did not dilute the requirement that the same commercial commodity must be sold and despatched.

Conclusion: The assessee was not entitled to remission under rule 12(1A).

Issue (ii): Whether the goods sold could be treated as the same goods as the goods purchased for the purpose of the rule.

Analysis: The Court held that the relevant test was commercial identity, not mere continuity of essential physical properties. The scheme of the sales tax provisions showed that the benefit was meant only where the goods purchased and the goods despatched remained the same commercial commodity. Raw tobacco and bidi pattis were held to be commercially different commodities. The Court also relied on the principle that conversion of one commodity into another amounts to consumption of the first commodity for sales tax purposes.

Conclusion: Raw tobacco and bidi pattis were not the same goods, so the statutory condition failed.

Final Conclusion: The references were answered against the assessee, and the claim for remission of purchase tax was rejected.

Ratio Decidendi: For remission under rule 12(1A), the goods sold must be commercially the same commodity as the goods purchased; mere preservation of basic physical properties after processing is insufficient.

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