Commercial identity and manufacture: aviation water-methanol mixture treated as a new taxable commodity.

Mixing methyl alcohol with distilled water in a fixed proportion and at a specified temperature for aviation use produced a product with a distinct commercial identity and specialised use. Because the resulting water-methanol mixture was not suitable for ordinary purposes and had a different nature, character and market identity from the original input, it was treated as a new commercial commodity. The process therefore fell within the wide meaning of manufacture under section 2(e-1) of the U.P. Trade Tax Act, 1948. The item was held taxable as an unclassified good rather than as methyl alcohol, and the assessee succeeded on classification and tax liability.

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Issues: Whether water-methanol mixture obtained by mixing methyl alcohol with distilled water in specified proportion for aviation use is a different commercial commodity liable to be treated as an unclassified item, and whether the process amounts to manufacture under section 2(e-1) of the U.P. Trade Tax Act, 1948.

Analysis: The mixture was prepared by adding distilled water to methyl alcohol in a fixed proportion and at a specified temperature for a specialised aviation purpose. The resulting product had a distinct use and was not capable of being used for other ordinary purposes. The reasoning accepted that where a substance undergoes processing or treatment so that its nature, character and commercial identity change, a new commodity comes into existence. On that basis, the mixture was treated as a new commercial product, and the process was held to fall within the wide meaning of manufacture under the statute.

Conclusion: The mixture is a commercially different product, the activity amounts to manufacture, and the item is taxable as an unclassified good rather than as methyl alcohol.

Final Conclusion: The revision was allowed and the Tribunal's order was set aside, with the assessee succeeding on classification and tax liability.

Ratio Decidendi: When mixing and treatment of an existing commodity produce a product with a distinct commercial identity and specialised use, the resulting article is a new commodity and the process constitutes manufacture.

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