Manufacture and sales tax: breaking bricks into gitti does not create a new taxable commodity.

Breaking purchased bricks into smaller pieces called gitti does not amount to manufacture where the original bricks retain their commercial identity and no distinct marketable commodity emerges. Mere processing, sizing, crushing or finishing of goods is insufficient to create a new taxable product unless the goods lose their identity and are transformed into a separate commercial article. On that basis, gitti produced from bricks on which tax had already been paid could not be subjected to sales tax again merely because of the change in form.

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Issues: Whether converting purchased bricks into smaller pieces called gitti amounts to manufacture so as to attract sales tax again.

Analysis: The determination turned on whether the activity of breaking bricks into gitti brought into existence a new commercial commodity. The Court relied on the principle that mere processing, sizing, crushing, or finishing of goods does not amount to manufacture unless the original goods lose their identity and a distinct commercial product emerges. On the facts, bricks and gitti were treated as the same commodity in different sizes, and the tax having already been paid on the bricks, the converted product could not be subjected to tax again merely because of the change in form.

Conclusion: The conversion of bricks into gitti does not amount to manufacture, and gitti made from taxed bricks is not liable to be taxed again.

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