Manufacture of granite tiles depends on the actual processing and distinct commercial identity of the finished product.

Cutting and polishing rough granite blocks does not automatically amount to manufacture if the original commodity retains its identity, but further processing that brings the material to market as granite tiles may create a distinct commercial product requiring separate tax treatment. The statutory entries distinguished polished granite, unpolished granite, chips and tiles, so the actual process and the commercial identity of the end product were ative. As the earlier findings had not adequately examined the processing undertaken or the relevance of the tile entry in the schedule, the matter required fresh examination and re-adjudication by the Assessing Officer.

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Issues: Whether cutting and polishing rough granite blocks into granite tiles amounts to manufacture or results in a new and distinct commercial commodity for the purpose of sales tax liability, and whether the matter required fresh examination of the classification and process involved.

Analysis: The statutory entries treated polished granite stones, unpolished granite stones, chips and tiles differently, and the outcome depended on the actual process undertaken and the commercial identity of the end product. Mere cutting or polishing of stone does not, by itself, amount to manufacture when the original commodity continues to retain its identity. At the same time, where the material is subjected to further processing and emerges in trade as tiles with a distinct commercial character, a fresh enquiry is necessary to determine the proper tax treatment. The earlier orders had not adequately examined the process and the relevance of the tile entry in the schedule.

Conclusion: The matter could not be finally decided on the existing findings and required re-adjudication by the Assessing Officer.

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