Polishing of stones is not manufacture where the goods retain their essential commercial identity and use.

Polishing of stones was held not to amount to "manufacture" under section 2(k) of the Rajasthan Sales Tax Act, 1954, because the process did not create a new commercial commodity with a distinct name, character or use. The essential test applied was whether the article retained its commercial identity after treatment; as the polished stones remained the same goods in substance, mere labour or processing was insufficient. As a result, concessional tax under section 5C was not available on that basis.

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Issues: Whether polishing of stones amounts to "manufacture" within the meaning of section 2(k) of the Rajasthan Sales Tax Act, 1954, so as to attract concessional tax under section 5C of the Act.

Analysis: The term "manufacture" was construed in the context of sales tax law as requiring more than mere labour or processing. The decisive inquiry was whether the commodity, after treatment, retained its essential commercial identity or emerged as a new and different article with a distinct name, character or use. Applying this test, the polishing of stones was found not to alter the stones into a separate commercial commodity. The polished stones remained essentially the same goods as originally purchased, and the process did not result in transformation into a new marketable article.

Conclusion: Polishing of stones does not amount to manufacture under section 2(k) of the Rajasthan Sales Tax Act, 1954, and the dealer-assessee is not liable to concessional tax under section 5C on that basis.

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