Mere melting of old silver ornaments into katcha silver does not amount to manufacture and attracts no purchase tax.

Mere melting of old silver ornaments and silver wares into katcha silver, without a further manufacturing process, does not amount to manufacture for purposes of purchase tax under section 5A of the Kerala General Sales Tax Act. The decisive factual finding was that the assessee only changed the shape of the old articles and did not create a new commercial product. On that basis, section 5A was not attracted and the purchase of the old silver articles did not give rise to purchase tax.

---

---

Issues: Whether purchase tax under section 5A of the Kerala General Sales Tax Act was attracted when old silver ornaments and silver wares were purchased, melted into katcha silver, and sold without any further manufacturing process.

Analysis: The decisive factor was whether the melting of old ornaments resulted in manufacture. The finding recorded was that the assessee only melted the old articles and changed their shape, and that the process did not amount to manufacture. The conclusion rested largely on factual appreciation, and the conversion of the ornaments into katcha silver did not create a new manufactured product for the purpose of purchase tax.

Conclusion: Section 5A was not attracted, and the purchase of the old silver ornaments and silver wares did not give rise to purchase tax.

Ratio Decidendi: Mere melting of old goods, resulting only in a change of shape and not in manufacture of a new commercial product, does not attract purchase tax under section 5A.

---