Hand-blending lubricating oils was not manufacture and mixed oil sale qualified as resale under sales tax law.

Hand-blending of two grades of lubricating oils did not amount to manufacture because the process did not bring into existence a new or commercially different commodity; the oils remained in liquid form and the department failed to show any change in form, character, or nature. On that basis, the sale of the mixed oil qualified as resale under section 2(26) of the Bombay Sales Tax Act, 1959, since resale covers purchased goods sold in the same form or without any process resulting in manufacture. The burden to prove manufacture rested on the department, and it was not discharged.

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Issues: Whether hand-blending of two grades of lubricating oils changed the form, character, or nature of the goods so as to amount to manufacture, and whether the sale of the mixed oil was a resale within section 2(26) of the Bombay Sales Tax Act, 1959.

Analysis: Resale under section 2(26) covers a sale of purchased goods in the same form in which they were purchased or without doing anything to them which amounts to, or results in, manufacture. The oils remained in liquid form after hand-blending, and the decisive test was whether the process produced a different commercial commodity. There was nothing on record to show that a new or commercially different commodity came into existence, and the burden to establish such change lay on the department. Since the process did not result in a commercially different article, it could not be treated as manufacture under section 2(17).

Conclusion: Hand-blending did not amount to manufacture, and the sale of the mixed oils was a resale within section 2(26). The answer was in favour of the assessee.

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