Commercially distinct commodities justify purchase tax on raw latex used to make centrifuged latex; levy upheld.

Raw rubber latex and centrifuged latex were treated as commercially distinct commodities because the processing converted the raw material into a product with a separate identity and price structure. On that basis, the levy of purchase tax on the assessee's purchase turnover of raw rubber latex used to produce centrifuged latex was upheld under the Kerala General Sales Tax Act, 1963. The fact that both items appeared in the same First Schedule entry did not prevent separate taxation of different commodities, and the single-point taxation principle did not bar the levy. A departmental circular could not override the statutory scheme, and no exemption notification was shown. The revision was dismissed.

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Issues: Whether raw rubber latex and centrifuged latex are different commercial commodities for the purpose of levy of purchase tax under the Kerala General Sales Tax Act, 1963, and whether the assessee was liable to tax on the purchase turnover of raw rubber latex used for producing centrifuged latex.

Analysis: The conversion of raw rubber latex into centrifuged latex involved a manufacturing process and resulted in a commercially distinct commodity with its own identity and price structure. The fact that both products were referred to in the relevant entry of the First Schedule did not prevent separate taxation where the goods were different commodities. The reasoning in the earlier decision on the same product, read with the principles governing distinct commercial commodities and single-point taxation, supported the levy on the purchase turnover of raw rubber latex. The departmental circular relied on by the assessee could not override the statutory scheme, and no exemption notification issued by the Government was shown.

Conclusion: The assessee was liable to pay purchase tax on the turnover of raw rubber latex, and the challenge to the levy failed.

Final Conclusion: The revision was dismissed, and the Tribunal's view sustaining purchase tax on raw rubber latex was upheld.

Ratio Decidendi: Where processing of a raw material results in a commercially distinct commodity, the processed product may be separately taxed and the single-point principle does not preclude levy on the purchase turnover of the raw material.

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