Commercial identity test bars export exemption for cashew kernel and supports reassessment of escaped turnover.

Processed cashewnut and cashew kernel are treated as distinct commercial commodities where processing changes the article's market identity; the commercial identity test therefore defeats the claim that they are the same goods for section 5(3) export exemption purposes. The note also states that reassessment under section 16 of the Tamil Nadu General Sales Tax Act is valid where turnover has escaped assessment, and that a wrongly granted exemption can justify reopening within the statutory period. The provision is described as broader than comparable income-tax reopening rules, allowing fresh determination of escaped turnover.

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Issues: (i) Whether cashewnut and cashew kernel are the same goods for the purpose of section 5(3) of the Central Sales Tax Act, 1956. (ii) Whether reassessment under section 16 of the Tamil Nadu General Sales Tax Act, 1959 was valid on the ground that the turnover of cashew kernel had escaped assessment.

Issue (i): Whether cashewnut and cashew kernel are the same goods for the purpose of section 5(3) of the Central Sales Tax Act, 1956.

Analysis: The decisive test is whether the processed article retains the same commercial identity as the original goods. The conversion of raw cashewnut into cashew kernel involves a series of processes and results in a marketable article separately recognised in trade. The earlier Supreme Court decisions on cashewnuts, the application of the commercial identity test, and the nature of the processing all support the conclusion that the kernel is not merely the same goods in another form but a distinct commercial commodity.

Conclusion: Cashewnut and cashew kernel are not the same goods. The benefit of section 5(3) is not available to the assessee.

Issue (ii): Whether reassessment under section 16 of the Tamil Nadu General Sales Tax Act, 1959 was valid on the ground that the turnover of cashew kernel had escaped assessment.

Analysis: Section 16 permits reassessment where any part of the turnover has escaped assessment for any reason within the prescribed period. Once the original exemption was found to have been wrongly granted, the assessing authority was entitled to reopen the assessment and determine the escaped turnover afresh. The validity of reassessment is not controlled by principles drawn from the Income-tax Act where the local sales tax provision uses broader language.

Conclusion: The reassessment proceedings were valid.

Final Conclusion: The petitions fail because the exported cashew kernel was held to be a commercially distinct commodity from the purchased raw cashewnut, and the reopening of the assessments was within the assessing authority's power.

Ratio Decidendi: Where processing converts an article into a commercially distinct commodity, the processed product is not the same goods for export exemption purposes, and a sales tax reassessment provision expressed in wide terms may be invoked whenever turnover has escaped assessment for any reason.

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