Mere crushing of stone into smaller sizes is not manufacture for purchase tax unless a new commercial commodity emerges.

Crushing stone boulders into smaller stones and blue metal jelly does not amount to consumption of goods in the manufacture of other goods unless the process creates a new and different commercial commodity. Liability under section 7-A(1)(a) of the Tamil Nadu General Sales Tax Act arises only where tax-free purchases are so consumed in manufacture for sale or otherwise, and that threshold was not met on the stated facts. The absence of an out-of-State sale did not change the character of the process. Purchase tax was therefore not attracted, and the position favoured the assessee.

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Issues: Whether crushing stone boulders into smaller stones of varying sizes and blue metal jelly amounted to consumption of goods in the manufacture of other goods so as to attract purchase tax under section 7-A(1)(a) of the Tamil Nadu General Sales Tax Act.

Analysis: Liability under section 7-A(1)(a) arises only when goods purchased without tax are consumed in the manufacture of other goods for sale or otherwise. The process in question merely reduced larger stone boulders into smaller stones and blue metal jelly; it did not result in a new and different commercial commodity in the sense required by the provision. The absence of any sale outside the State did not alter the essential character of the process, and the ingredients necessary to fasten liability under section 7-A were not established.

Conclusion: The process did not amount to manufacture of other goods within section 7-A(1)(a), and purchase tax was not attracted. The decision was in favour of the assessee.

Ratio Decidendi: Mere crushing or size reduction of stone does not amount to manufacture of other goods for the purpose of purchase tax unless the process brings into existence a new and different article.

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