LexDEPUTY COMMISSIONER, SALES TAX (LAW) BOARD OF REVENUE (TAXES) ERNAKULAM versus PIO FOOD PACKERS
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1271 DEPUTY COMMISSIONER, SALES TAX (LAW) BOARD OF A, REVENUE (TAXES) ERNAKULAM v. PIO FOOD PACKERS May 9, 1980 [P. N. BHAGWATI, V· D. TuLZAPURKAR AND R. S. PATHAK, JJ.] Kera/a General Sales Tax Act, Section 5-A(l)(a) "conmmes such goods in the malrufacture of other goods for sale or otherwise", meaning of-ExigibiliJy to tax of pineapple ffuit. when processed into slices for the purpose of being IO!d in sealed cans. ·-..; Tho respondent assessee, Pio Food Packers carries on the business of manu- . facturing and selling canned fruit besides other products. The Pineapple pur- chased by the assessee is washed and then the inedible portion, tbe end crown, skin· and inner core are removed, thereafter the fruit is, sliced and the slices are filled in cans, sugar is added as a preservative, the cans are sealed under temperature and then put in boiling water for sterilisation. In its return for the year 1973-74 under the Kerala General Sales Tax Act, 1963 the assessee claimed that a turnover of Rs. 3,84,138-89 representing the purchase of pineapple fruit was not covered by Section 5-A(l)(b) of the Act. It was asserted that the pineapple was converted into pineapple slices, pineapple jam, pineapple squash and pineapple juice. The assessee maintained that by the conversion ·Of pineapple fruit into its products no new commodity was created and it was erroneous to say that there was a consumption of pineapple E K fruit "in the manufacture of" these goods. The Sales Tax Officer did not accept the contention and completed the assessment on the finding that a manu- facturing process was involved and that, therefore, the case fell within s. 5-A (t):(a). In revision before tbe Sales Ta:ii Appellate Tribunal, the assessee c0nceded that pineapple jam and pineapple squash would · be covered by s. 5-A(l)(a), and in regard to pineapple juice the Tribunal found that s. S-l(a) was attracted. The only question which remained was whether the prepara- F lion of pineapple slices fall within s. 5-A(l) (a). On that question two mem- ' bers of the Tribunal. found in favour of the assessee, and the third member fDund. in favour of the Revenue. The Revenue then applied in revision to the High Court and the High Court, has by its judgment dated 24th January, 1978, .maintained the order of the Tribunal. Dismissing the appeal, by special leave, the court HEID : 1. Wiien pineapple fruit is processed into pineapple slices for. the purpose of being sold in sealed cans, there is no .<:onsumption of the original pineapple fruit for the purpose of manufacture within the meaning of Section 5A(l)(a) of the Kerala General Sales Tax Act, 1963 [1277 E-FJ 2. Section 5-A(l)(a) of the Kerala General· Sales Tax Act envisages the consumption of a commodity in the manufacture of another commodity. ·The goods purchased should be consumed, the consumption should be in the pro- ceos !>f !llllluf&cture, and the result must be the manufacture of other goods. - : ,;.. ·C .D . E / ·.G .H 1272 SUPREME COURT REPORTS (1980] 3 S.C.R. There are several criteria for determining whether a commo<lity is consumed in the manufacture of another .. The generally prevalent test is whether the article produced is regarded in the trade, by those who deal in it, as distinct in identity from the commodity involved in its manufacture. Co1LI1monly, manufacture is the end result of one or more processes through which the original commodity is madf', to pass. The nature and extent of processing may vary from one case to another, and indeed there may be several stages of pro- cessing and perhaps a different kind of processing at each stage. With each process suffered, the original commcxlity experience a c:h.an.ge. But it is only when the change, or a series of changes, take the commodity to the point where commercially it coo no longer be. regarded as the original comm°9ity but instead is recognised 1l8 a new and distinct article that a manufacture can bei said .to take place. Where there is no essential difference in identity between the original commcxlity and the processed article, it is not possible to say that one· commo- dity bM been consumed in the manufacture of another. Although it has. under- gone a degree of processing, it must be regarded as still retaining its orfginal identity. [1274 F-H, 1275 A-BJ In the present oase, there is no essential difference between pineapple fruit and the canned pineapple sli
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