Commercially different commodity test treated Methimix blending as manufacture under sales tax law.

Mixing distilled water with methanol in exact proportions and selling the product as Methimix was treated as manufacture under section 2(17) of the Bombay Sales Tax Act, 1959 because the process produced a commercially different commodity. The court applied a broad reading of manufacture, covering producing, making, altering, treating or adapting goods, but focused on whether the result was a new commercial product. Laboratory testing, a specific aviation use as a power augmentation fluid, and sale under a distinct trade name supported that conclusion. The earlier hand-blending of oil decision was distinguished because no new commercial commodity had been shown there.

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Issues: Whether mixing distilled water with methanol in exact proportions and selling the product as Methimix amounted to manufacture within the meaning of the Bombay Sales Tax Act, 1959.

Analysis: Manufacture under section 2(17) of the Bombay Sales Tax Act, 1959 was construed broadly to include producing, making, altering, treating or adapting goods. The decisive test, however, was whether the process resulted in a commercially different commodity. The mixture here was prepared in exact proportions, laboratory tested, used for a specific aviation purpose as a power augmentation fluid, and sold under a distinct trade name. Those features showed that a new commercial commodity had come into existence. The earlier decision dealing with hand-blending of oil was distinguished because no new commercial commodity had been shown there.

Conclusion: The activity amounted to manufacture, and the Tribunal was not justified in holding otherwise. The question referred was answered in the negative, in favour of the Revenue.

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