J.B Kohy, J.:— Whether conversion of tamarind seeds into tamarind power is a manufacturing process for claiming exemption under S.R.O No. 1729/93 is the question to be considered in this case. The above notification grants exemption to small scale undertakings from payment of tax payable under the Kerala General Sales Tax Act (hereinafter referred to as ‘the Act’) for the goods manufactured for a specified period on satisfying certain conditions. Appellate/Petitioner is producing tamarind powder from tamarind seeds. Exemption was denied on the ground that the processing of tamarind seeds into powder is not a manufacturing process. The learned single Judge dismissed the claim for exemption following the Full Bench decision of this Court reported in Narriputhiris Pickle Industries v. State Of Kerala (1993 (1) KLT 486 : (1994) 92 STC 1). In that case, assessee contended that processing of chilly into chilly powder is not a manufacturing process, and therefore, tax is not payable at two stages. That was accepted by the Full Bench. The matter was taken in appeal to the Supreme Court. The Supreme Court dismissed the appeal as no evidence was adduced by the State to show that a commercially different product is manufactured. The Supreme Court observed as follows:

“Whether, the chilli powder is the result of aprocess of manufacture which the chillies have undergone and whether chilli powder is a commodity commercially distinct from chillies are questions of fact to answer which the party proposing that the chilli powder is also exigible to tax must place relevant evidence before the appropriate taxing authority. In the instant case, the sales tax authorities should have placed such material to establish that the chillies underwent some process or manufacture and that then end-product, namely, chilli powder, was recognised by those who dealt in it as being distinct from chillies. They did not do so.”

2. Therefore, SLP was dismissed by the Supreme Court because no evidence was adduced by the State to show that a commercially different product is manufactured when chilli is converted into chilli powder. The word ‘manufacture’ is defined in the notification S.R.O No. 1729/93. Therefore, we have to consider whether conversion of tamarind seed into tamarind powder is manufacture as defined in the notification itself. The entries in the Statute are also relevant to come to a finding on this question. ‘Manufacture’ is defined in the notification as follows:

“(ix) ‘Manufacture’ shall mean the use of raw materials and production of goods commercially different from the raw materials used but shall not include mere packing of goods, polishing, cleaning, grading, drying, blending or mixing different varieties of the same goods, sawing, garbling, processing one form of goods into another form of the same goods by mixing with chemicals or gas, fumigation or any other process applied for preserving the goods; in good condition or for easy transportation. The process of producing desiccated coconut out of coconut, chemical treatment of rubber wood and production of dressed or tanned hides out of raw hides shall be deemed to be ‘manufacture’ for the purpose of this notification.”

3. So, the question to be considered is whether tamarind powder is commercially different from the raw material tamarind seed. In the definition of ‘manufacture’ in the notification, dehusking and powdering are not excluded from the process of manufacture even though packing, polishing, cleaning, processing one form of goods into another form of the same goods etc. were specifically excluded from the term of ‘manufacture’.

4. How tamarind seed is converted into tamarind powder is mentioned in the affidavit filed by the appellant. It is as follows:

“The different stages in the manufacturing activity of tamarind seed powder are the following:

(i) The first stage is cleaning of the raw material by removing the fibre, mud and other wastes. This is done manually.

(ii) In the second stage the raw material will be feeded in a cutter machine to get broken pieces.

(iii) The third page is to hull the broken pieces in a hulling machine to remove the shell (husk).

(iv) The fourth stage is grinding the broken pieces to get powder.

7. The loss of weight due to the different processes employed for manufacture of powder is about 35% of the weight of raw materials and the normal output (powder) will be only around 65% of the input.”

5. It is further stated that tamarind seed powder manufactured by the appellant is used for manufacture of cattle feed by mixing with other materials and tamarind seed as such with the shell cannot be used as cattle feed. It is also stated as follows:

‘10. Tamarind seed as such with the shell cannot be used as cattle feed. Tamarind seed and tamarind seed powder are treated as commercially different commodities in commercial parlance and persons who deal with it”

6. Price of tamarind powder is much higher than the tamarind seed. In the counter affidavit filed by the State, the process of manufacture as explained in the affidavit by the assessee is not questioned even though sale of tamarind husk was denied. Further, it is stated in paragraph 8 of the counter affidavit filed by the State as follows:

“…………It is to be noted that tamarind seed whole has not specifically used as such. It is used as cattle feed only after it is powdered. In certain areas, powdered tamarind seed used as starch.”

7. Therefore, it has been admitted in the counter affidavit that tamarind seed, as a whole, cannot be used as such and it is used as cattle feed only after it is powdered. That itself shows that when natural tamarind seed is converted into powder, a commercially different product for a specific use is formed. The seed which cannot be used as cattle feed is converted into cattle feed after dehusking and powdering the same and the resultant powder is a different commodity in commercial parlance and functional use.

8. We may also look into the statutory entry in the Act. The item is mentioned as item No. 26 of First Schedule in the Act. It is as follows:

SI. No. Description of goods xx xx xx 26. Cattle feed (including gingili oil cake, groundnut oil cake, tamarind seed, tamarind seed powder, husks of pulses, bran, fish feed and poultry feeds) other than those specifically mentioned in this Schedule.

9. So, tamarind seed and tamarind powder are separately mentioned which shows that the Legislature itself considered them as separate items of cattle feed. The learned Special Government Pleader mainly relied on the decision of the Apex Court in Krishna Chander Dutta (Spice) Pvt. Ltd. v. Commercial fax Officer ((1994) 93 STC 180-SC). There, the Apex Court held that pepper and pepper powder can be considered as the same goods for the purpose of single point tax by applying the functional test. It was observed that wheat as such is not consumed by the consumer. It can be consumed only after powdering the same. But, it is not so in the case of pepper. Pepper as such can be consumed by the ultimate consumer. But, in the case of turmeric it is not so consumed. Thus applying the functional test also turmeric and turmeric powder are not the same goods. In view of the statutory definition in the notification considered in that case, turmeric and turmeric powder were also held to be included for single point tax. In the notification, pepper and turmeric “whole, broken ground or powdered” were noted for single point tax. Therefore, the Legislative intention itself was very clear that where pepper or turmeric, whole, broken, ground or powdered, it has to be considered taxable for single point tax. Here, the Legislative entry is different. The Supreme Court observed as follows:

“We are of opinion that so far as whole black and white pepper and pepper powder are concerned, they are the same goods, whether applying the functional test or the test of common parlance/commercial parlance. The analogy of paddy and rice or of wheat and wheat powder is not apt. Nobody consumes paddy as it is. Similarly, no one eats whole wheat. They are consumed after milling them into rice or flour, as the case may be. But so far as the pepper is concerned, it is used equally in whole as well as powdered form. It is for this reason perhaps that the entry in Notification No. 885-F.T. dated May 1, 1955, speaks of “Black and white pepper whole, broken, ground or powdered or of any other form or description whatsoever”. It is equally significant that the Notification No. 1915-F.T. dated May 10, 1963, refers to these commodities “as specified in Notification No. 885-F.T. dated 1st May, 1955”. Black and white pepper “as specified in Notification No. 885” means black and white pepper, whether whole, powdered, broken or in any other form.

So far as turmeric and turmeric powder is concerned, the position is not identical, applying the functional test But inasmuch as turmeric is also described in Notification No. 885 in the same manner as black and white pepper and also because Notification No. 1915 refers to it with reference to the said earlier notification, we are inclined to say that turmeric and turmeric powder must also be treated as the same goods.”

10. So, the Hon'ble Apex Court considered the description of the item in the notification and the observations of the Supreme Court only help the assessee as, here, it is admitted case in the affidavit filed by the State that tamarind seed cannot be used as cattle feed and only tamarind powder can be used as cattle feed. It shows that it is a commercially and functionally different product and it is described separately in the Schedule to the Act. Government by Circular dated 11.8.1993 clarified that since there is substantial value addition, conversion of tamarind seed into powder is ‘manufacture’ enabling the manufacturer of tamarind powder to get the benefit of the notification. But, in view of the decision of the Apex Court in Krishna Chander Dutta (Spice)'s case (supra) and opinion of the Advocate General, Ext. P2 letter was issued holding that the production of tamarind powder is not a manufacturing activity. In fact, this is against the reasoning of the Apex Court decision. But, because of Ext. P2 clarification, according to the appellant, subordinate authorities were denying exemption. There is no point in filing statutory appeal unless Ext. P2 is set aside.

11. The learned Special Government Pleader pointed out the judgment of the Karnataka High Court in Sri Vinayaka Oil Industries v. State of Karnataka ((1993) 91 STC 253) wherein it was held that conversion of tamarind seed into powder does not result in the manufacture of a new article so as to attract S. 6 of the Karnataka Act. There was no definition of ‘manufacture’ in S. 6 of the Karnataka Sales Tax Act. In the above decision, main discussion was whether mere dehusking of tamarind seeds into tamarind pappu was not a manufacture as both were produced in that case for providing starch. If dehusked tamarind seed is used, it will produce brownish starch whereas when pappu is used, it will produce white starch. The Legislative entry in the Act is also not mentioned in the above decision and, without much discussion, after holding that this is normally a matter for the authorities to consider in the light of principles of observations decided, it was held that conversion of seed into powder does not result in the manufacture of a new article. But, in the notification considered by us, there is clear definition of ‘manufacture’ and the Legislative entry also shows that tamarind seed and tamarind powder are considered differently and in the counter affidavit it is stated that tamarind seed cannot be used as cattle feed; but, tamarind powder is used as cattle feed showing functional difference.

12. Next decision cited by the learned Special Government Pleader is the decision reported in State Of Maharashtra v. Mahalaxmi Stores ((2003) 129 STC 79) wherein the Hon'ble Apex Court held that crushing of big sized stones (boulders) into small sizes (gitti) will not result in a manufacture. It was held that conversion of bigger size boulders into gitti would not amount to manufacture as no new commercial commodity comes into existence. Another decision cited is Deputy Commissioner of Sales Tax (Law), Board of Revenue (Taxes) v. Pio Food Packers (1980 KLT 624 : (1980) 46 STC 63). It is of no help to the Government. That was a case where the question was where the pineapple is processed and cut into pineapple slices for the purpose of being sold in sealed cans, whether there is a consumption of original pineapple fruit for the purpose of manufacture of slices. It was held that no such manufacture was involved though a certain degree of processing was involved. It was held that by cutting the pineapple into slices and thereafter canning it, on adding sugar to preserve it, did not change the identity nor did it bring into existence different goods. However, so far as pineapple jam and pineapple squash were concerned, it was conceded by the dealer himself that they were different goods. In State of Gujarat v. Sakarwala Brothers ((1967) 19 STC 24) it was held that sugar processed into ‘patasa’ continued to be sugar. But, the Apex Court held so because of the statutory entry No. 8 of the First Schedule to the Central Excise and Salt Act which reads as follows:

“‘sugar’ means any form of sugar containing more than 90 per cent of sucrose.”

13. It is very clear from the entry that any form of sugar should be considered as the same product in view of the statutory entry.

14. In Tatson Food Industries v. State Of Kerala (1999 (3) KLT 174 FB), a Full Bench of this Court referred to various decisions of the Supreme Court and, after considering these decisions, set aside the finding of the Kerala Sales Tax Appellate Tribunal that chilli powder and coriander powder are different commodities from chilli and coriander seeds and remanded the matter for fresh consideration and deciding the matter after considering the nature of processing and adducing evidence to find out whether these are commercially different products. But, the Full Bench upheld the finding of the Tribunal that turmeric and turmeric powder are not the same goods. The above finding is applicable to this case. In this connection, we also consider the necessary entries in that regard in the case of chilli and coriander seeds. Item 36 of First Schedule of the Act reads as follows:

SI. No. Description of goods xx xx xx 36. Chillies, coriander seeds, including their powders, curry powders, spices powder and garlic.

15. So, ‘chillies’ and ‘coriander seeds’ and its powders are treated as same goods in the Statute itself. Here, in this case, as far as tamarind seed is concerned, Item 26 of First Schedule of the Act itself would show that the Legislative intention is to consider tamarind seed and tamarind powder as different commodities.

16. In Union of India v. Delhi Cloth and General Mills Co. Ltd. (AIR 1963 SC 791), the Apex Court held as follows:

“Manufacture implies a change, but every change is not manufacture and yet every change of an article is the result of treatment, labour and manipulation. But, something more is necessary and there must be transformation; a new and different article must emerge having a distinctive name, character or use.”

17. The Apex Court in the above case held that refined oil was not covered by the expression “non-essential vegetable oils of all sorts” and conversion of vegetable oil into refined oil is a manufacturing process. In Aspinwall & Co. Ltd. v. The Commissioner of Income Tax, Ernakulam (2001 (3) KLT 410 : 2001 AIR SCW 3444), the Apex Court held that conversion of raw berries into coffee beans is manufacture. In Empire Industries Ltd. v. Union of India ((1985) 3 SCC 314 : AIR 1986 SC 662), the Supreme Court held that” ‘Greyfabric’ after they undergo the various processes of bleaching, dyeing, sizing, printing, finishing, etc., emerges as a commercially different commodity with its own price-structure, utility and other commercial incidents and that there was in that sense a ‘manufacture’ within the meaning of S. 2(f), even as unamended.” The Supreme Court in Aditya Mills Ltd v. Union Of India ((1988) 4 SCC 315 : AIR 1988 SC 2237) with reference to the principles laid down in earlier decisions observed in para 6 thus:

“…………. Manufacture is complete as soon as by the application of one or more process, the raw material undergoes some change. If a new substance is brought into existence or if a new or different article having a distinct name, character or use results from particular process or processes, such process or activity would amount to manufacture. The moment there is transformation into anew commodity commercially known as a separate and distinct commodity having its own character and use, ‘manufacture’ takes places.”

18. In B.P Oil Mills Ltd. v. Sales Tax Tribunal ((1998) 6 SCC 577 : AIR 1998 SC 3055), it was held that process of changing crude oil into refined oil is a manufacturing activity. The Kerala High Court in Dy. Commr. Of Salestax v. Sulaiman (1986 KLT 291 : (1986) 61 STC 331) held that bone-meal manufactured as a fertilizer out of the raw bones purchased involved a process of manufacture even though the process of manufacture was only the crushing and powdering such raw bones and the bone-meal manufactured out of raw bones has got a different commercial identity as fertilizer. In Ganesh Trading Co. v. State of Haryana ((1973) 32 STC 623), Babu Ram Jagdish Kumar & Co. v. State of Punjab ((1979) 44 STC 159) and State of Karnataka v. Raghurama Shetty ((1981) 47 STC 369, it was held by the Apex Court that paddy and rice are two distinct commodities and that milling of paddy involves a manufacturing process. This was so held without reference to the fact that paddy and rice are mentioned as two separate commodities in S. 14 of the Central Sales Tax Act. In Ganesh Trading Co. case (supra), it was stated:

“Now, the question for our decision is whether it could be said that when paddy was dehusked and rice produced, its identity remained. It was true that rice was produced out of paddy but it is not true to say that paddy continued to be paddy even after dehusking. It had changed its identity. Rice is not known as paddy. It is an misnomer to call rice as paddy. They are two different things in ordinary parlance. Hence, quite clearly when paddy is dehusked and rice produced, there has been a change in the identity of the goods.”

19. In Rajasthan Roller Flour Mills Association v. State of Rajasthan ((1993) 91 STC 408), it was held that flour, maida and suji derived from wheat are not ‘wheat’ within the meaning of item (iii) of S. 14(1) of the Central Sales Tax, 1956. In Hindustan Aluminium Corporation Ltd. v. State of U.P ((1981) 8 STC 411 SC), the Apex Court held that metal employed in the notification issued under the Uttar Pradesh Sales Tax Act, 1948, will not include the forms fabricated from the primary form of metals as they constitute two different distinct commodities and must be recorded as different commercial commodities. Principles were laid down by the Supreme Court as follows:

“……a word describing a commodity in a sales tax statute should be interpreted according to its popular sense, the sense being that in which people conversant with the subject-matter with which the statute is dealing would attribute to it. Words of everyday use must be construed not in their scientific or technical sense but as understood in common parlance. That principle has been repeatedly reaffirmed in the decisions of this Court. It holds good where a contest exists between the scientific and technological connotation of the word on the one hand and its understanding in common parlance on the other. We are here concerned, however, with a very different situation. We are concerned, with the manner in which these and similar expressions have been employed by those who framed the relevant notifications, and with the inference that can be drawn from the particular arrangement of the entries in the notification. We must derive the intent from a contextual scheme.”

20. The counter affidavit filed in this case shows that tamarind seeds cannot be used as cattle feed and only tamarind powder can be used as cattle feed, and therefore, functionally and commercially, tamarind seed is different from tamarind powder. As soon as tamarind powder is produced from the seed, a new commodity, known as separate and distinct commodity, having its own use is formed. The statutory entry support the above view. Hence, it can be concluded that conversion of tamarind seed into tamarind powder satisfies the definition of ‘manufacture’ in the notification. Hence, we set aside Exts. P2 and P5 and direct the second respondent to consider the application of the petitioner for sales tax exemption afresh, on merits and grant consequential benefits, if they are entitled the benefit of notification, otherwise. Judgment of the learned single Judge is set aside and Writ Appeal is allowed. No costs.