Manufacture test under sales tax law fails where lacquering leaves polyester film commercially unchanged.

Manufacture under section 2(17) of the Bombay Sales Tax Act, 1959 requires a process that changes the nature or character of goods so a commercially distinct article emerges; a mere change in form, appearance, or surface treatment is insufficient. Lacquering of polyester film was treated as only a physical coating process, with no chemical change and no loss of the film's essential identity. The lacquered product remained polyester film in trade and character, so the process did not create a different commercial commodity and did not amount to manufacture.

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Issues: Whether lacquering of polyester film amounts to manufacture within the meaning of section 2(17) of the Bombay Sales Tax Act, 1959 and results in a different commercial commodity.

Analysis: Manufacture under section 2(17) requires more than a mere change in form or appearance; the process applied must alter the nature or character of the goods so that a commercially different and distinct article emerges. If the commodity retains its substantial identity through processing, manufacture is not established. On the facts, lacquering of polyester film was found to be only a physical coating process, without chemical change or loss of the original identity of the film. The lacquered film remained polyester film in trade and character, and the broader definition of manufacture could not be applied to treat every surface treatment as manufacture.

Conclusion: Lacquering of polyester film does not amount to manufacture, and no different commercial commodity comes into existence. The question is answered in the negative in favour of the assessee.

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