Purchase tax on manufacture requires loss of original commercial identity; processed raw bones were not treated as consumed goods.

Purchase tax under section 7-A(1)(a) of the Tamil Nadu General Sales Tax Act arises only when purchased goods are consumed in the manufacture of other goods so that their original commercial identity is exhausted. Mere processing or change in form is insufficient if the essential identity remains intact. On this test, raw bones converted into crushed bone, bone grist, bone-meal, fluff and horn hoof were held not to have been consumed in manufacture, because they were only processed into different bone products and not transformed into a distinct new commodity. Section 7-A(1)(a) was therefore not attracted, and the Tribunal's view was affirmed.

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Issues: Whether raw bones purchased by the dealers and converted into crushed bone, bone grist, bone-meal, fluff and horn hoof were "consumed" in the manufacture of other goods so as to attract purchase tax under section 7-A(1)(a) of the Tamil Nadu General Sales Tax Act, 1959.

Analysis: Liability under section 7-A(1)(a) arises only where the purchased goods are consumed in the process of manufacture of other goods for sale or otherwise. The decisive consideration is whether the original commodity is devoured or exhausted in the manufacturing process so that its identity is completely lost. A mere change in form, or processing that leaves the essential commercial identity intact, does not amount to consumption in manufacture. Applying this test, the raw bones purchased in these cases were only processed into different bone products, but they were not consumed in the sense required by the section. The Tribunal's approach was consistent with the principle that the resultant product must be distinct in commercial identity from the original commodity.

Conclusion: Section 7-A(1)(a) was not attracted, as the raw bones were not consumed in the manufacture of other goods. The Tribunal's finding was affirmed.

Final Conclusion: The tax revision cases failed and the assessee succeeded on the only substantive issue decided.

Ratio Decidendi: For purchase tax under section 7-A(1)(a), the purchased goods must be consumed in manufacture so that they lose their original commercial identity and become a distinct new commodity.

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