Manufacture test under sales tax law: processing white ash into sacred ash did not create a new commercial commodity.

Cleaning white ash and adding perfume to convert it into sacred ash did not amount to manufacture under section 7-A(1)(a) of the Tamil Nadu General Sales Tax Act. The court applied the test whether processing produced a new commercial commodity with a distinct identity or whether the original commodity retained its substantial identity. As the essential identity of the ash remained unchanged, the process was treated as mere processing rather than manufacture, and purchase tax was not attracted.

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Issues: Whether cleaning white ash and adding perfume so as to convert it into sacred ash amounts to manufacture under section 7-A(1)(a) of the Tamil Nadu General Sales Tax Act for levy of purchase tax.

Analysis: The applicable test is whether the processed article emerges as a new commercial commodity or whether it continues to retain its original identity. A mere degree of processing does not amount to manufacture if there is no essential difference in identity between the original commodity and the end product. The reasoning adopted in the analogous decision on processed pineapple was applied, since the transformation of white ash into sacred ash by cleaning and adding perfume did not create a new commercial product and the commodity retained its substantial identity throughout.

Conclusion: The process did not amount to manufacture and the commodity was not liable to purchase tax under section 7-A(1)(a) of the Tamil Nadu General Sales Tax Act.

Final Conclusion: The tax revision was rejected and the assessee succeeded.

Ratio Decidendi: A commodity is manufactured only when processing results in a new commercial product with a distinct identity; where the original commodity retains its substantial identity, the process is not manufacture for purchase tax purposes.

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