Commercial parlance test treats masala powder as a distinct taxable commodity, not the same as individual spices.

Masala powder made by grinding and mixing spices and other ingredients is treated as a commercially distinct commodity, not as the same goods as the individual spices used in its preparation. The commercial parlance test applies: once the ingredients lose their separate identity and a new marketable product emerges, tax is levied on that distinct commercial article. A broader definition of spices in the Spices Board Act does not control the sales tax entry under the Andhra Pradesh General Sales Tax Act. The result is that masala powder falls outside the entry for spices and is taxable as a separate commodity.

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Issues: Whether masala powder prepared by grinding and mixing spices and other ingredients remains "spices" under Entry 182 of the First Schedule to the Andhra Pradesh General Sales Tax Act, 1957, or becomes a commercially distinct taxable commodity.

Analysis: The ingredients used in the preparation of masala lose their separate identity and character after grinding and mixing, and the end product is known in the commercial world as a different commodity. Sales tax is levied on distinct commercial commodities that emerge into existence, not on the raw materials from which they are made. The fact that some constituent ingredients may themselves be specified spices does not prevent the mixed product from being treated as a separate commercial article. The wider description of spices in the Spices Board Act does not control the taxing entry under the sales tax schedule. Applying the commercial parlance test and the settled principle that a new and distinct commodity becomes separately taxable when it emerges, masala powder cannot be treated as the same goods as the individual spices used in its preparation.

Conclusion: Masala powder is a commercially different commodity and is taxable; the issue is decided against the assessee and in favour of the Revenue.

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