Exemption for mixed goods retained where combining exempt ingredients does not create a new commercial commodity for sales tax purposes.

The Madras HC held that a mixture of exempted ingredients sold as feed under the brand name "J.K. Feeds" was not exigible to sales tax because the ingredients, including rice bran, wheat bran, pulses and grams dust, cholam, ragi and salt, were covered by the exemption notifications in force. Mere powdering and mixing for consumer convenience did not create a commercially distinct commodity or destroy the identity of the exempted ingredients. The denial of exemption rested on a mistaken assumption that some ingredients were non-exempt. The levy on the compounded feed was therefore unsustainable, and the orders of the authorities below were set aside.

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Issues: Whether the sale of a mixture of exempted articles under the brand name "J.K. Feeds" was exigible to sales tax.

Analysis: The ingredients used in the mixture, namely rice bran, wheat bran, dust of pulses and grams, cholam, ragi and salt, were covered by the exemption notifications in force. The process adopted was only powdering and mixing for consumer convenience. Such admixture did not bring into existence a commercially distinct commodity losing the identity of the exempted ingredients. The denial of exemption proceeded on a mistaken assumption that some of the ingredients were not exempt, whereas the notifications extended exemption to those items as well.

Conclusion: The mixture remained within the exemption and was not liable to sales tax.

Final Conclusion: The revision succeeded, the levy of sales tax on the compounded feed was unsustainable, and the orders of the authorities below were set aside.

Ratio Decidendi: A mixture formed only by combining exempted ingredients, without producing a commercially new commodity, retains the benefit of the exemption notification and is not exigible to sales tax.

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