Commercially distinct commodity test keeps bale boards outside raw wood classification under sales tax law.

Processing cheap wood or planks into bale boards by joining, nailing, adding borders and shaping corners produced a commercially different and distinct commodity with separate identity, utility and marketability. On that test, the finished bale boards did not retain the classification of the raw material under entries 63 or 145 of the First Schedule to the Andhra Pradesh General Sales Tax Act, 1957, and were liable to be treated as unclassified goods. The factual finding that the processed product had a distinct commercial character was based on acceptable evidence and did not justify interference.

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Issues: Whether bale boards manufactured from cheap wood/planks were to be treated as unclassified goods liable to tax at every point of sale, or whether they retained the character of the raw material and fell under entries 63 or 145 of the First Schedule to the Andhra Pradesh General Sales Tax Act, 1957.

Analysis: The determining test was whether the process resulted in a commercially different and distinct commodity. The raw material, cheap wood, was converted by joining multiple planks, nailing them together, adding borders, and shaping the corners into bale boards designed for packing tobacco. The finished product had a distinct commercial identity, utility, and marketability, and could not be treated as the same commodity as timber or planks. The finding of the Tribunal, being a factual finding based on acceptable evidence, did not warrant interference.

Conclusion: Bale boards are different and distinct commodities from the cheap wood/planks used to make them and are liable to be treated as unclassified goods; the challenge to the tax treatment fails and is against the assessee.

Ratio Decidendi: Where processing of a raw material yields a commercially different and distinct commodity with separate identity and use, the finished product is taxable as a separate commodity and does not retain the classification of the original material.

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