Commercial identity of processed prawns remained unchanged, preserving export-linked tax protection under the sales tax framework.

Processing, cleaning, beheading and freezing of raw prawns did not change their commercial identity for export purposes. Applying commercial parlance and essential character tests, the Court treated raw prawns and frozen shrimps as the same commodity, so the mere export description as "frozen shrimps" did not create a distinct product. On that basis, the last purchase of prawn preceding export remained protected under section 5(3) of the Central Sales Tax Act, and the revenue's attempt to treat the goods as a new commodity for purchase tax under the Orissa Sales Tax Act, 1947, failed.

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Issues: Whether raw prawn, after processing and freezing as frozen shrimps, remained the same commodity for the purposes of export under section 5(3) of the Central Sales Tax Act, and whether the purchase of prawn preceding the export was protected from purchase tax under the Orissa Sales Tax Act, 1947.

Analysis: The decisive question was whether processing, cleaning, beheading and freezing of prawns brought about a change in their commercial identity. The Court followed the principle that goods must be understood in their commercial parlance and by their essential character. Raw prawns and processed or frozen prawns/shrimps were held to retain the same identity, and the mere use of the description "frozen shrimps" for export did not convert them into a distinct commodity. The distinction relied on by the revenue between fish and prawn was found irrelevant, since the present controversy concerned whether processed prawns became a different commodity from their raw form.

Conclusion: The processed goods did not become a new or distinct commodity, and the last purchase of prawn preceding export was covered by section 5(3) of the Central Sales Tax Act. The reference was answered in the negative, in favour of the dealer.

Final Conclusion: The legal effect of the decision is that processing and freezing of prawns for export did not defeat export-linked statutory protection, and the purchase tax demand could not be sustained on the footing of a change in commodity identity.

Ratio Decidendi: Processing, cleaning and freezing of prawns do not by themselves create a new commercial commodity if, in common parlance, the goods retain their original character and identity for purposes of export exemption.

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