Commercial identity test: crushing boulders into gitti is not manufacture when the goods remain the same in trade.

Crushing boulders into gitti does not amount to manufacture where the process only reduces size and does not change the essential nature or commercial identity of the stone. The controlling test is whether the processed commodity is commercially regarded as a new and distinct article; if it remains the same commodity in trade, manufacture is not made out. Applying that test, boulders and gitti were held to be only different sizes of stone, and stone remained the taxable item under the relevant schedule entry. The question was answered in favour of the assessee.

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Issues: Whether crushing boulders into smaller-sized stones known as gitti amounts to manufacture under section 2(17) of the Bombay Sales Tax Act, 1959.

Analysis: The definition of manufacture in section 2(17) is wide, but it must be read in a practical manner and applied only to processes that bring about an impact on the nature or character of the goods. The controlling test is whether the processed commodity is commercially regarded as a new and distinct article or whether it remains the same commodity in trade. Applying that test, boulders and gitti are only different sizes of stone. Crushing merely reduces size and does not alter the essential nature or commercial identity of the goods. Stone remained the taxable item under entry 25 of Part II of Schedule C.

Conclusion: Crushing boulders into gitti does not amount to manufacture, and the question was answered in favour of the assessee.

Ratio Decidendi: A process amounts to manufacture only if it changes the nature or commercial identity of the goods so that they are regarded in trade as a distinct commodity; mere reduction in size without such change is not manufacture.

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