Commercial identity test for mineral oil applied after chemical processing; subsequent sales treated as taxable under Item 47-A.

Mineral oil purchased after payment of tax under Item 47-A did not retain the same commercial identity after chemical processing into transformer oil, soluble cutting oil and Oil 91. The processing altered its characteristics and market identity, and the resulting products were treated as different commercial commodities within the same broad item. The contention that prior tax payment on the base oil barred later levy was rejected, and the subsequent sales were held liable to sales tax under Item 47-A of the Tamil Nadu General Sales Tax Act, 1959.

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Issues: Whether mineral oil purchased after payment of tax under Item 47-A of the First Schedule to the Tamil Nadu General Sales Tax Act, 1959, remained the same commodity when, after chemical processing, it was sold as transformer oil, soluble cutting oil, or Oil 91, so as to escape tax on the subsequent sale.

Analysis: Item 47-A covers all kinds of mineral oils. The purchased base oil underwent chemical processes that altered its characteristics and commercial identity and was marketed under different commercial names. The processing was not merely mechanical. On those facts, the oil sold by the petitioners was not the same mineral oil as purchased, but a different commercial commodity falling within the same broad item.

Conclusion: The subsequent sales were liable to sales tax under Item 47-A of the First Schedule to the Tamil Nadu General Sales Tax Act, 1959, and the contention that the earlier payment of tax barred the later levy was rejected.

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