Manufacture test under sales tax law fails where refining oil does not create a new commercial commodity.

Refining soyabean oil and til oil by removing impurities and improving edibility did not amount to manufacture under the Bengal Finance (Sales Tax) Act, because the process did not create a new and distinct commercial commodity with a separate name, character and use. The refined product remained the same oil in improved form and had no independent identity in trade or common parlance. Refusal to renew the eligibility certificate was therefore justified.

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Issues: Whether the process of refining soyabean oil and til oil into more edible and refined oil amounted to "manufacture" within section 2(dd) of the Bengal Finance (Sales Tax) Act, 1941 so as to justify renewal of the eligibility certificate.

Analysis: The statutory definition of "manufacture" includes producing, making, extracting or blending goods, but the settled sales tax principle is that mere change is not enough; the process must result in a new and distinct commercial commodity having a separate name, character and use. The processing in the petitioner's factory consisted of refining and removing impurities, which improved the grade and edibility of the oils, but the end-product remained soyabean oil or til oil in refined form. There was no complete transformation into a different commercial article, and the output had no distinct or independent identity from the input in trade or common parlance.

Conclusion: The process did not amount to manufacture, and the refusal to renew the eligibility certificate was justified.

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