Manufacture in commercial parlance: coconut husk processed into fibre became a distinct commodity and attracted purchase tax.

Conversion of coconut husk into coconut fibre was treated as manufacture because the process produced a new and commercially distinct article recognised in trade. The Court applied the commercial parlance test and held that identity of the raw material need not be completely lost if the result is a separately identifiable commodity. The earlier sliced pineapple decision was distinguished as involving only a prepared form of the same article. On that basis, coconut fibre was held distinct from husk, and the value of the husk was liable to purchase tax under Section 5-A of the Kerala General Sales Tax Act.

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Issues: Whether conversion of coconut husk into coconut fibre amounts to manufacture and whether coconut fibre is a commercially distinct commodity so as to attract purchase tax under Section 5-A of the Kerala General Sales Tax Act.

Analysis: The process involved soaking the husk in saltish water for days, allowing decomposition, and then beating it mechanically or manually to extract fibre. The relevant test is whether the process results in a new and distinct article recognised in commercial parlance, not whether the raw material completely loses its identity. Applying that test, coconut fibre was found to be a separately identifiable commercial commodity different from coconut husk. The earlier decision concerning sliced pineapple was held inapplicable because the present process produced a different commodity and not merely a prepared form of the same article.

Conclusion: Conversion of coconut husk into coconut fibre amounts to manufacture, and the resulting fibre is commercially distinct from the husk; the value of the husk is therefore liable to purchase tax under Section 5-A.

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