Commercially distinct commodity test fails where pineapple processing into canned slices does not amount to manufacture.

Pineapple fruit processed into canned pineapple slices did not lose its essential identity and therefore was not consumed in the manufacture of another commercially distinct commodity. The court applied the test that purchase tax under Section 5-A(1)(a) arises only where the purchased goods are used in a process resulting in a new trade identity. Washing, trimming, slicing, canning, sweetening and sterilising merely made the fruit more convenient and preservable; they did not create a new commercial article. Purchase tax on the fruit used for canned pineapple slices was therefore not attracted.

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Issues: Whether pineapple fruit processed into canned pineapple slices is consumed in the manufacture of another goods so as to attract purchase tax under Section 5-A(1)(a) of the Kerala General Sales Tax Act, 1963.

Analysis: Section 5-A(1)(a) applies only when goods purchased are consumed in the process of manufacture and the process results in another commercially distinct commodity. The relevant test is whether the processed article is regarded in trade as having a different identity from the original commodity. Here, the fruit was washed, trimmed, sliced, canned, sweetened and sterilised, but the essential identity of pineapple remained unchanged. The canned slices were only a more convenient and preservable form of the same fruit and did not become a new commercial commodity.

Conclusion: Pineapple fruit converted into canned pineapple slices was not consumed in the manufacture of another goods, and Section 5-A(1)(a) was not attracted.

Final Conclusion: The levy of purchase tax on the purchase of pineapple fruit for making canned pineapple slices was unsustainable, and the assessee succeeded.

Ratio Decidendi: Mere processing that does not bring into existence a commercially different and distinct article does not amount to manufacture for the purposes of purchase tax.

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