Manufacture test under sales tax law: purified waste lubricating oil stayed the same commodity and kept resale treatment.

Converting used waste lubricating oil into reusable oil did not amount to manufacture or refining under the Bombay Sales Tax Act, 1959 because the process only removed impurities and restored usability without creating a new and distinct commercial commodity. The decisive test was whether processing produced a different article recognised in trade by a changed name, character, or use; where the commodity retains its substantial identity, manufacture is not established. On the stated facts, the processed oil remained lubricating oil and no new commercial product came into existence, so resale treatment was not denied and the dealer remained entitled to the resale benefit.

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Issues: Whether converting used waste lubricating oil into usable lubricating oil amounted to manufacture or refining within the meaning of the Bombay Sales Tax Act, 1959, so as to deny the dealer the benefit of resale under section 8(ii).

Analysis: The statutory scheme denied resale treatment only where the goods were subjected to a process amounting to manufacture. The definition of manufacture in section 2(17) was wide, but it had to be applied in a practical and workable manner. A mere change, improvement in marketability, or treatment that leaves the commodity with its continuing substantial identity does not amount to manufacture. The decisive test was whether a new and distinct commodity, recognised in trade by a different name, character, or use, emerged after processing. On the facts, the used lubricating oil remained lubricating oil after removal of impurities and reconditioning; only its usability was restored. No new commercial commodity came into existence, and the process was not a refining process covered by Explanation II.

Conclusion: The activity did not amount to manufacture or refining under the Act, and the assessee was entitled to claim resale benefit in respect of the processed lubricating oil.

Ratio Decidendi: A process does not amount to manufacture under section 2(17) of the Bombay Sales Tax Act, 1959 unless it brings about a real transformation resulting in a new and distinct commercial commodity with a changed character or identity; mere purification or improvement that leaves the commodity substantially the same does not suffice.

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