Processing of spices into powder creates a distinct commercial commodity, so sales tax applies despite prior tax on whole spices.

Grinding whole turmeric and pepper into powder and packing them for sale was treated as processing and manufacture because the powdered goods were regarded in trade as distinct commercial commodities from the whole spices. On that basis, the seller was liable as a dealer on sales of the powdered products. The single-point levy objection also failed because tax paid on the original whole commodities did not protect a later, commercially different product from tax. The note emphasizes that taxation follows the market identity of the commodity sold, not merely its source material.

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Issues: (i) Whether converting whole turmeric and whole pepper into powder and packing them for sale amounted to processing and manufacture under the West Bengal Sales Tax Act, 1954, so as to make the seller a dealer liable to sales tax on the powdered goods. (ii) Whether the sales of powdered turmeric and pepper were barred from taxation on the ground of single point levy or double taxation because tax had already been paid on the whole commodities.

Issue (i): Whether converting whole turmeric and whole pepper into powder and packing them for sale amounted to processing and manufacture under the West Bengal Sales Tax Act, 1954, so as to make the seller a dealer liable to sales tax on the powdered goods.

Analysis: The statutory scheme treated notified commodities as taxable under the Act, but the question of liability depended on whether the article sold remained the same commercial commodity or emerged in a new commercial form. The expressions used in section 2(b) were to be understood in commercial parlance. Whole turmeric and pepper were regarded in trade as different from their powdered forms, and the grinding together with packing for sale brought into existence a distinct article in the market. The words "manufactured", "made" and "processed" were not synonymous, and the activity undertaken by the applicant answered both processing and manufacturing in the relevant commercial sense.

Conclusion: The activity amounted to processing and manufacture, and the applicant became liable as a dealer on sales of the powdered goods.

Issue (ii): Whether the sales of powdered turmeric and pepper were barred from taxation on the ground of single point levy or double taxation because tax had already been paid on the whole commodities.

Analysis: A single point levy does not protect a later product that has become a new and different commercial commodity. Tax is not levied on the substance as such, but on the commodity in its market identity. Once the whole commodity is transformed into a distinct commercial article, the new article attracts tax in its own right. Since powdered turmeric and pepper were held to be new commercial commodities, the plea of double taxation failed.

Conclusion: The single point levy did not bar taxation, and the objection based on double taxation was rejected.

Final Conclusion: The assessment of sales tax on the powdered turmeric and pepper was sustained, and the writ applications were dismissed, while limited liberty was reserved to pursue appeals on factual issues concerning returned goods and the extent of sales of whole commodities.

Ratio Decidendi: Where a commodity is transformed by processing into a distinct commercial article, the new article is taxable under the sales tax law despite earlier tax having been paid on the original commodity, because the single point scheme applies to the same commercial commodity and not to a new one.

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