M/S. PUNJAB AROMATICS vs STATE OF KERALA

The Supreme Court addressed the applicability of Section 5A of the Kerala General Sales Tax Act, 1963, concerning the liability to pay purchase tax on red oil converted into sandalwood oil. The Court held that the process of removing impurities from red oil does not constitute 'manufacture' under Section 5A, as the essential nature of the commodity remains unchanged. Consequently, the appellant was not liable to pay purchase tax on the red oil, affirming the position that purification does not equate to manufacturing a distinct product.