Madras HC rules processed prawns not a new commodity, exempts from tax

The Madras HC dismissed the tax revision case, finding prawns processed by the assessee did not create a new commodity, thus exempt from tax liability. Relying on SC precedent on sliced pineapple, the HC held that processed prawns retained their original character and were not a new commercial product. Upholding the Tribunal's decision, the HC granted exemption under section 5(3) of the Central Sales Tax Act, 1956.

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The Madras High Court dismissed the tax revision case, ruling that no new commodity emerged in the process done by the assessee involving prawns, and therefore, the tax liability does not apply. The Court cited a previous Supreme Court case regarding sliced pineapple fruits to support their decision. The Court held that prawns subjected to cleaning, cutting, and packaging for export retained their original character and could not be considered a new commercial commodity. The Court upheld the Tribunal's decision to grant exemption under section 5(3) of the Central Sales Tax Act, 1956.

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