Commercially different commodity test: blending coffee with chicory can constitute manufacture under sales tax law.

Mixing and blending coffee powder with chicory powder to produce French Coffee is treated as manufacture under the Bombay Sales Tax Act because the test is whether the activity brings into existence a commercially different commodity. The article notes that the statutory definition is wide and covers processing, treating or adapting goods, while roasting or grinding coffee seeds is separately excluded by rule 3. On the stated facts, the blended product was commercially distinct from pure coffee powder, with a different colour, odour and commercial identity, so the activity was characterised as manufacturing for sales tax purposes.

---

---

Issues: Whether the mixing and blending of coffee powder with chicory powder to produce French Coffee amounts to "manufacture" within clause (17) of section 2 of the Bombay Sales Tax Act, 1959.

Analysis: The definition of "manufacture" in the Bombay Sales Tax Act, 1959 is wide and includes producing, making, extracting, altering, ornamenting, finishing, or otherwise processing, treating or adapting goods. The decisive test applied was whether the activity results in a commercially different commodity. Roasting or grinding coffee seeds stood excluded by rule 3 of the Bombay Sales Tax Rules, 1959, but the remaining activity of mixing coffee powder with chicory powder had to be tested independently. The resultant product was found to be commercially known as French Coffee, different in character from pure coffee powder, and to have changed colour, odour, and commercial identity.

Conclusion: The mixing and blending of coffee powder with chicory powder constitutes manufacture within clause (17) of section 2 of the Bombay Sales Tax Act, 1959.

Final Conclusion: The reference was answered against the assessee, and the activity in question was held to be manufacturing activity for sales tax purposes.

Ratio Decidendi: An activity amounts to manufacture under sales tax law only if it brings into existence a commercially different commodity from the goods to which the activity is applied.

---