Commercially distinct processing of raw bones attracts purchase tax when unregistered purchases are used to make saleable bone-meal.

Raw bones bought from unregistered dealers and processed into sinews and bone-meal were treated as consumed in manufacture of commercially distinct goods, attracting purchase tax under the remedial levy provision. Applying the commercial identity test, the Court held that drying and crushing raw bones produced new saleable commodities different from the original goods, so the purchase turnover was exigible to tax to the extent the bones were used in that process. The assessee's reliance on authorities involving no new commodity was rejected, and the tax assessments were upheld.

---

---

Issues: Whether raw bones purchased from unregistered dealers and crushed into sinews and bone-meal were consumed in the manufacture of other goods so as to attract purchase tax under section 6-A(ii)(a) of the Andhra Pradesh General Sales Tax Act.

Analysis: The statutory scheme treated bones and horns as taxable at the first sale and separately recognised bone-meal in the First Schedule. Section 6-A was a remedial provision intended to ensure that taxable goods which had not suffered tax did not escape levy when purchased from non-registered dealers and consumed in the manufacture of other goods. Applying the commercial identity test, the Court held that the process of drying and crushing raw bones produced sinews and bone-meal, which were different commercial commodities from raw bones. The earlier authorities relied upon by the assessee concerned processes where no new commodity emerged, whereas here the resulting products were intended for sale and were commercially distinct.

Conclusion: The assessee was liable to pay tax under section 6-A(ii)(a) on the purchase turnover of raw bones to the extent consumed in producing sinews and bone-meal.

Final Conclusion: The purchase turnover of raw bones used in producing sinews and bone-meal was exigible to tax, and the challenge to the assessments failed.

Ratio Decidendi: Where purchased goods not previously taxed are processed into commercially distinct saleable commodities, the purchase is treated as consumption in manufacture and attracts purchase tax under the relevant remedial levy provision.

---