Commercially distinct commodities in sales tax: rice bran fatty acid and acid oil treated separately from rice bran oil.

Rice bran fatty acid and rice bran acid oil were treated as commercially distinct commodities from rice bran oil for sales tax purposes because commercial parlance and functional utility showed that rice bran oil is edible, while the other products are by-products used for soap manufacture and other non-edible purposes. The refining process was found to produce separate commercial goods, so the later insertion of a separate entry for acid oil and fatty acid did not affect the assessment year in question. They were therefore liable to tax as separate commodities.

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Issues: Whether rice bran fatty acid and rice bran acid oil are distinct and different commodities from rice bran oil for the purpose of levy of sales tax under the relevant sales tax law.

Analysis: The classification turned on how the goods are understood in commercial parlance, their functional utility, and whether a new commercial commodity emerges during the refining process. The Court found that rice bran oil is fit for human consumption, whereas rice bran fatty acid and rice bran acid oil are by-products used for soap manufacture and other non-edible purposes. On that basis, the goods were treated as commercially different and distinct commodities, and the later insertion of a separate entry for acid oil and fatty acid did not alter the position for the assessment year in question.

Conclusion: Rice bran fatty acid and rice bran acid oil are distinct from rice bran oil and are liable to be taxed as separate commodities.

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