Manufacture test for granite tiles fails where cutting and polishing do not create a new commercially distinct product.

Cutting and polishing rough granite blocks into tiles does not amount to manufacture where the granite retains its essential identity and no new commercially distinct commodity with a different name, character or use comes into existence. On that reasoning, the activity is not taxable as manufacture under section 5 of the Sales Tax Act. The possibility of liability under the resale-tax provision was left open for the assessing authority.

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Issues: Whether cutting and polishing rough granite blocks into granite tiles amounts to manufacture so as to attract sales tax under section 5 of the Sales Tax Act.

Analysis: Rough granite, even after being cut into smaller sizes and polished, retains its essential identity as granite and does not become a new and different commercial commodity. The process does not bring into existence a product with a distinct name, character or use. On that basis, the activity cannot be treated as manufacture for the purpose of levy under section 5. The possibility of liability, if any, under the resale-tax provision was left open for consideration by the assessing authority.

Conclusion: The process of cutting and polishing granite blocks into tiles does not amount to manufacture and is not taxable as such under section 5.

Final Conclusion: The appeals succeeded on the principal tax issue and the assessee was held not liable to sales tax on the ground of manufacture for the granite tiles.

Ratio Decidendi: A process amounts to manufacture only when it brings into existence a commercially distinct commodity with a new identity, and mere cutting and polishing of a mineral product that retains its essential character does not satisfy that test.

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