Manufacture test for processed silica sand recognised where crushing, screening and washing created a distinct commercial commodity.

Excavation of silica sand, followed by crushing, screening, grading and washing, was treated as manufacture because the process produced a new and distinct commercial commodity with different identity and industrial use. Although section 2(k) of the Rajasthan Sales Tax Act, 1954 is broad enough to cover extracting and preparing goods, the decisive test was whether the end product differed commercially from the original mineral. The Tribunal found that the excavated lumps were not sold as such, impurities and coloured layers were removed, and the processed silica sand was marketed in different sizes for specific industrial purposes. On that basis, the notification benefit was available and the revisional challenge failed.

---

---

Issues: Whether excavation of silica sand followed by crushing, screening, grading and washing amounts to manufacture within section 2(k) of the Rajasthan Sales Tax Act, 1954, so as to entitle the assessee to the benefit of the notification dated 23 March 1963 and pass on the tax incidence on form S.T. 17.

Analysis: Manufacture under section 2(k) is wide enough to include producing, collecting, extracting, preparing or making goods, but the decisive test is whether the commodity emerging after the process is a new and distinct commercial commodity. The excavated mineral was found to be taken out in lumps, with impurities and coloured layers removed, then crushed, screened, graded and washed into silica sand of different sizes for specific industrial use. The findings of the Tribunal showed that the lumps were not sold as such and that the processed product had a different commercial identity and utility. On that basis, the earlier decision concerning gypsum sold in lump form did not apply.

Conclusion: The process amounted to manufacture and the assessee was entitled to the notification benefit; the revisional challenges failed.

---