Commissioner of Sales Tax (Law), Board of Revenue Vs. COCO Fibres  INSC 374 (4 December 1990)
K. Ramaswamy, K. Kuldip Singh (J)
1991 AIR 378 1990 SCR Supl. (3) 419 1992 SCC Supl. (1) 290 JT 1990 (4) 618 1990
General Sales Tax Act: Section 5A--'Coconut husk' Whether coconut fibre a
separate identity from 'Coconut husk'.
is a registered dealer under the Kerala General Sales Tax Act. In its return of
taxable turnover, the assessee excluded the value of coconut husks purchased
and converted into coconut fibre on the ground that there was no manufacturing
process involved in making fibre from coconut husk.
Sales Tax Officer as well as the Appellate Authority negatived the assessee's
claim. The Sales Tax Appellate Tribunal however, allowed the assessee's
revision, and the High Court confirmed the order of the Tribunal.
the appeal of the Revenue, this Court,
(1) By the process of manufacture something is produced and brought into the
existence which is different from that, out of which it is made in the sense
that the thing produced is by itself a commercial commodity capable of being
sold or supplied. The material from which the thing or product is manufactured
may necessarily lose its identity or may become transformed into the basic or
essential properties. [421D-E] Ujagar Prints v. Union of India,  3 SCC
488, referred to.
The test laid down by this Court is that the article which comes into being
must be commercially different from the one from which it is made or
manufactured. [422D] State of Bihar v. Chrestien
Mica Industries Ltd.,  7 S.T.C. 626 and Commissioner of Sales Tax v. Harbilas
Rai & Sons,  21 S.T.C. 17 (S.C.), referred to.
view of the admitted position that green husk is soaked into saltish sea water
for days together and after decomposition, on being subjected to beating either
by manual or mechanical process, fibre is produced in the process, which is a
distinct commodity known in the 420 commercial parlance. No one in the market
would sale or supply husk when fibre is asked for. [422E] Dy. Commissioner of
Sales Tax (Law) v. Pie Food Packers,  41 S.T.C. 364, distinguished.
The Coconut fibre is commercially a different iden- tifiable commodity known as
such in commercial parlance.
the value of sale or purchase of coconut husk would attract purchase tax under
section 5-A of the Sales Tax Act. [422G]