Manufacture under exemption notifications turns on commercial distinctness; executive clarifications cannot rewrite statutory meaning.

An executive clarification cannot alter the meaning of "manufacture" in a sales tax exemption notification, because the notification must be construed on its own terms and only a statutory amendment can change its legal effect. The controlling test is whether processing produces a commercially different commodity by change in name, character or use, rather than a mere preservation-type activity. On that basis, chemical treatment of rubber wood required factual examination of the trade identity of the end product and could not be conclusively determined on the existing record. The clarification and consequential orders were set aside, and the exemption claim was remitted for fresh decision under the statutory procedure.

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Issues: (i) Whether the Government's clarification treating chemical treatment of rubber wood as not amounting to manufacture under the sales tax exemption notification was valid in law. (ii) Whether the process of converting raw rubber wood into chemically treated rubber wood amounts to manufacture for the purpose of exemption under S.R.O. No. 1729 of 1993.

Issue (i): Whether the Government's clarification treating chemical treatment of rubber wood as not amounting to manufacture under the sales tax exemption notification was valid in law.

Analysis: The exemption notification issued under section 10 of the Kerala General Sales Tax Act, 1963 had to be construed on its own terms. The clarification relied on by the authorities was only an executive communication and not a statutory amendment to the notification. The power under the Act did not authorise the Government to alter the meaning of "manufacture" by such a clarification, and the provision then in force did not confer jurisdiction to issue the impugned clarification on the question of manufacturing character.

Conclusion: The clarification was authority of law and could not govern the petitioner's claim; it was liable to be quashed.

Issue (ii): Whether the process of converting raw rubber wood into chemically treated rubber wood amounts to manufacture for the purpose of exemption under S.R.O. No. 1729 of 1993.

Analysis: The notification defined manufacture as the use of raw materials resulting in goods commercially different from the raw materials used, while excluding mere preservation-type processes and specified non-qualifying activities. The controlling test was whether a new and distinct commercial commodity emerged in the eyes of the trade by change in name, character or use. The issue required factual determination on the nature of the process and the commercial identity of the end product, including evidence from the trade and consumers.

Conclusion: The question could not be finally answered on the existing record and had to be decided afresh by the competent authority under the statutory procedure.

Final Conclusion: The impugned clarification and consequential orders were set aside, and the petitioner's exemption claim was directed to be reconsidered under the statutory mechanism, with interim protection against recovery pending that decision.

Ratio Decidendi: For exemption notifications using the term "manufacture", the decisive test is whether processing brings into existence a commercially different commodity by name, character or use; an executive clarification cannot override or amend the notification's statutory meaning.

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