Commercially distinct commodity test denies second-sale exemption where fabricated grills emerge from taxed raw materials.

Fabrication that converts locally purchased M.S. rounds and rods into grills of specified size, shape and use creates a commercially distinct commodity; the later sale is therefore not treated as a second sale exempt from tax merely because the raw material had already suffered tax. The document also notes that a limitation challenge to a suo motu revisional order failed for want of reliable material, and the reassessment was not shown to suffer from any factual infirmity warranting interference. The restored assessment was accordingly sustained.

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Issues: (i) Whether mild steel grills fabricated from locally purchased M.S. rounds and rods retained the same commercial identity so as to qualify as second sales and escape tax under the Act. (ii) Whether the revisional order under the suo motu power was barred by limitation, and whether the reassessment suffered from such factual infirmity as to justify interference.

Issue (i): Whether mild steel grills fabricated from locally purchased M.S. rounds and rods retained the same commercial identity so as to qualify as second sales and escape tax under the Act.

Analysis: The supplies were not mere sales of unchanged M.S. rounds and rods. The goods were fabricated into grills of specified size, shape, and use for the Electricity Board, and the processing resulted in a commercially different product. The governing principle is that where a new commercial commodity emerges, the earlier taxation of the raw material does not confer exemption on the later distinct commodity merely because it is made from the same substance.

Conclusion: The grills were a distinct commercial commodity and were not eligible for second sale exemption. The finding was against the assessee.

Issue (ii): Whether the revisional order under the suo motu power was barred by limitation, and whether the reassessment suffered from such factual infirmity as to justify interference.

Analysis: The limitation objection was not supported by reliable material. The revisional authority had addressed the time limit with reference to the date of the appellate order, and official acts were entitled to the usual presumption of regularity. The challenge to the reassessment figures was also unsupported by substantial evidence.

Conclusion: The limitation challenge failed and no factual basis was shown for interference. The finding was against the assessee.

Final Conclusion: The tax appeals were without merit and the Revenue's assessment order, as restored in revision, was sustained.

Ratio Decidendi: For sales tax purposes, once processing of goods brings into existence a commercially distinct commodity, the later sale is taxable as a separate sale notwithstanding that the raw material had already suffered tax.

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