Distinct commodity treatment for paddy and rice can trigger entry tax on local-area import for processing and export.

Paddy and the rice obtained after dehusking were treated as distinct commodities in common parlance, so bringing paddy into a local area for processing and export could still amount to consumption, use or sale within that area. On that basis, the entry tax charging provisions were held applicable to the movement of paddy into the local area despite the subsequent conversion into rice for export. The legal effect was that such transactions could attract entry tax where the commodity entering the area and the processed output are not regarded as the same article.

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Issues: Whether bringing paddy within the local area and exporting rice after dehusking amounts to consumption, use or sale in the local area so as to attract entry tax.

Analysis: Paddy and rice were treated as different commodities in common parlance. On that basis, the bringing in of paddy and its subsequent conversion into rice for export did not prevent the transaction from falling within the charging provisions governing entry tax on consumption, use or sale within the local area.

Conclusion: The question was answered in the affirmative and against the assessee. The entry tax was held leviable.

Ratio Decidendi: Where paddy and the rice obtained after dehusking are distinct commodities in common parlance, bringing paddy into a local area for processing and export can attract entry tax as consumption, use or sale within the area.

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