Commercial identity test for processed goods: goat hair patties treated as a new commodity, sustaining purchase tax.

Processing raw goat hair and goat hair strings into sorted, cleaned and knitted patties created a commercially distinct commodity under the common and commercial parlance test. The processed patties did not retain the original identity of the purchased goods, so the export-linked exemption for the same goods did not apply. On that basis, the article states that purchase tax under section 5C of the Rajasthan Sales Tax Act, 1954 was sustainable, because the goods exported were a new commercial product rather than the identical raw material purchased.

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Issues: Whether goat hair and goat hair strings, after sorting, cleaning and knitting into goat hair patties, retained their original identity as the same commodity or became a distinct commercial commodity, and consequently whether the purchase tax was chargeable under section 5C of the Rajasthan Sales Tax Act, 1954 or the goods were exempt as export goods under section 5 read with section 5(3) of the Central Sales Tax Act, 1956.

Analysis: The governing test was whether the processed article retained its original character and identity in common and commercial parlance, or whether the processing brought into existence a new and distinct commodity. Applying that test, the Court found that raw goat hair and goat hair strings were sorted, cleaned and knitted into patties of different length and breadth, and that this process resulted in a commercially different product. The goods exported were therefore not the same as the raw material purchased. Since the processed patties constituted a new commodity, the case fell within the purchase-tax provision rather than the export exemption applicable where the same goods are exported.

Conclusion: Goat hair and goat hair strings and goat hair patties are different commodities, and the levy of purchase tax under section 5C was justified. The contention that the transaction was exempt as the same goods were exported was rejected.

Final Conclusion: The revision petitions failed because the processed export item was held to be a new commercial commodity, making the purchase tax levy sustainable.

Ratio Decidendi: Where processing changes the commercial identity of the original goods and produces a distinct commodity in common parlance, the processed product is treated as a new commodity and does not retain the original goods' export-linked tax exemption.

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