Commercially distinct transformation of tamarind seed into powder qualifies as manufacture, supporting sales tax exemption consideration.

Conversion of tamarind seed into tamarind powder was treated as manufacture because the processing by cleaning, breaking, hulling and grinding produced a commercially and functionally distinct commodity with a different use and identity. The notification's definition of manufacture covered processes that result in goods commercially different from the raw material, and the exclusion for mere packing, cleaning, grading, drying, blending or mixing did not apply. The separate treatment of tamarind seed and tamarind seed powder in the statutory schedule reinforced their distinct character. On that basis, exemption from sales tax had to be considered under the notification, and the denial could not stand.

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Issues: Whether conversion of tamarind seed into tamarind powder constitutes manufacture within the meaning of S.R.O. No. 1729/93 so as to entitle the assessee to exemption from sales tax.

Analysis: The notification defined manufacture as the use of raw materials resulting in goods commercially different from the raw materials used, while excluding only specified processes such as packing, cleaning, grading, drying, blending or mixing of the same goods. The process employed here involved cleaning, breaking, hulling and grinding, and the material before and after processing was shown to differ in use, identity and commercial understanding. Tamarind seed as such could not be used as cattle feed, whereas tamarind powder was used for that purpose, and the State's own affidavit accepted this functional distinction. The statutory schedule also separately referred to tamarind seed and tamarind seed powder, supporting the view that the Legislature treated them as distinct commodities. In these circumstances, the conversion brought into existence a commercially and functionally different product and satisfied the notification's definition of manufacture.

Conclusion: The conversion of tamarind seed into tamarind powder is manufacture, and the assessee is entitled to consideration of exemption under the notification.

Final Conclusion: The exemption denial could not stand, the impugned clarification and order were set aside, and the matter was remitted for fresh consideration of the exemption claim on merits.

Ratio Decidendi: Where processing changes a raw material into a commercially distinct article having a different use, and the relevant notification or statutory scheme treats the two as separate commodities, the process amounts to manufacture.

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