Essential identity test prevents purchase tax on timber sliced into splints, as no commercially different product emerged.

Timber purchased and sliced into splints for sale to match manufacturers was held not to be consumed in the manufacture of another commodity for purchase tax purposes. The decisive test was whether the original commodity lost its essential identity. Because the timber retained its identity after slicing and no commercially different product emerged, section 7-A(1)(a) of the Tamil Nadu General Sales Tax Act, 1959 did not apply. A precedent involving timber converted into packing cases was distinguished on the ground that packing cases were commercially distinct and the timber identity had been lost.

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Issues: Whether timber purchased and thereafter sliced into splints and sold to match manufacturers could be treated as having been consumed in the manufacture of another commodity so as to attract purchase tax under section 7-A(1)(a) of the Tamil Nadu General Sales Tax Act, 1959.

Analysis: The decisive test applied was whether the original commodity lost its essential identity in the process. Timber sliced into splints continued to retain its identity as timber, and the process of slicing did not bring into existence a commercially different product. The reasoning was supported by the principle that where there is no essential difference in identity between the original commodity and the processed article, it cannot be said that one has been consumed in the manufacture of the other. The contrary precedent dealing with timber converted into packing cases was distinguished because, in that situation, the end-product was commercially distinct and the original identity of timber was lost.

Conclusion: Purchase tax under section 7-A(1)(a) was not attracted on the purchase of timber used for making splints, and the assessee succeeded.

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