Summarize the following court judgment. Civil Appeal No. 220 (NT) of 1986 370 From the Judgment and order dated 20th November	 1985 of the Karnataka High Court in Writ Petition No. 27805 of 1982. C.K. Viswanath Iyer	 K.M.K. Nair and S.T. Desai for the Appellants B.R.L. Iyengar	 M. Veerappa for the Respondents. The Judgment of the Court was delivered by BHAGWATI	 C.J. The short question that arises for determination in this appeal by certificate is whether shrimps	 prawns and lobsters subjected to processing like cutting of heads and tails	 peeling	 deveining	 cleaning and freezing cease to be the same commodity and become a different commodity for the purpose of the . Can they still go under the description of shrimps	 prawns and lobsters or in other words	 when we use the words 'shrimps	 prawns and lobsters ' do they mean only raw shrimps	 prawns and lobsters as caught from the sea or do they also include processed and frozen shrimps	 prawns and lobsters. This question which falls for determination in the present appeal arising out of the following facts. The appellants are a partnership firm carrying on business as dealers in shrimps	 prawns and lobsters and other sea food products. The appellants are registered as a dealer both under the Karnataka Sales Tax Act	 1957 and the . The appellants in the course of their business purchase shrimps	 prawns and lobsters locally for the purpose of complying with orders for export and they cut the heads and tails of the shrimps	 prawns and lobsters purchased by them	 peel	 devein and clean them and after freezing and packing them in cartons	 they export them to foreign buyers outside India under prior contracts of sale. The appellants filed their statement of monthly turn over for the month of April 1982 before the Assistant Commissioner of Commercial Taxes	 Mangalore and in this statement of monthly turn over	 they claimed total exemption from tax in respect of the purchase turn over of shrimps	 prawns and lobsters on the ground that the same had been purchased in the course of export. The appellants relied on sub section (3) of section 5 of the which reads as follows: "Notwithstanding anything contained in sub section (1) the last sale or purchase of any goods preceding the sale or purchase occasioning the export of those goods out of the 371 territory of India shall also be deemed to be in the course of such export	 if such last sale or purchase took place after	 and was for the purpose of complying with	 the agreement or order for or in relation to such export. " The appellants contended that since the purchases of shrimps	 prawns and lobsters had been made by them for the purpose of complying with the orders for export	 such purchases of shrimps	 prawns and lobsters must be deemed to be in the course of export and they were accordingly not taxable under the Karnataka Sales Tax Act 1957. This contention of the appellants was rejected by the Assistant Commissioner of Commercial Taxes and on 30th July 1982 an order was made by the Assistant Commissioner of Commercial Taxes for the month of April 1982 under section 12 B (2) of the Karnataka Sales Tax 1957 assessing the appellants to purchase tax and other incidental taxes in respect of the purchases of shrimps	 prawns and lobsters made by them during the said period. The Assistant Commissioner of Commercial Taxes also passed another order dated 3rd August 1982 assessing the appellants to purchase tax and other incidental taxes in respect of the purchases of shrimps	 prawns and lobsters made by them during the month of May	 1982. These two orders made by the Assistant Commissioner of Commercial Taxes were followed by issue of notices of demand for Rs.52	610.71 and Rs.44	237.88 respectively against the appellants. The appellants thereupon filed a writ petition in the High Court of Karnataka challenging the assessment orders and the notices of demand issued against them and sought appropriate direction	 order or writ restraining the respondents from imposing or collecting purchase tax on purchase turn over of shrimps	 prawns and lobsters under the Karnataka Sales Tax Act 1957. The writ petition was dismissed by the High Court	 but having regard to the importance of the question involved	 a certificate under Article 133 of the Constitution was granted by the High Court and that is how the present appeal by certificate has come before us. It is clear on a plain reading of sub section (3) of Section 5 of the that in order to attract the applicability of that provision	 it is necessary that the goods which are purchased by an assessee for the purpose of complying with the agreement or order for or in relation to export	 must be the same goods which are exported out of the territory of India. The words "those goods" in this subsection are clearly referable to "any goods" mentioned in the preceding part of the sub section and it is therefore obvious that the goods 372 purchased by the assessee and the goods exported by him must be the same. If by reason of any processing to which the goods may be subjected after purchase	 they change their identity so that commercially they can no longer be regarded as the original goods	 but instead become a new and different kind of goods and then they are exported	 the purchases of original goods made by the assessee cannot be said to be purchases in the course of export. The question which therefore arises for consideration is as to what happens when shrimps	 prawns and lobsters purchased by the assessee are subjected to the process of cutting of heads and tails	 peeling	 deveining	 cleaning and freezing before export. Do they cease to be the original commodity and become commercially a new commodity or do they still retain their original identity as shrimps	 prawns and lobsters? Before we proceed to consider this question	 it is necessary to refer to certain provisions of the Karnataka Sales Tax Act	 1957 (hereinafter referred to as the 'Karnataka Act ') which came into force on 1st October 1957. Section 5 of the Karnataka Act which enacts the charging section provides for levy of tax on sales and purchases of various commodities described in the Schedules to the Act. The Third Schedule to the Karnataka Act	 as originally enacted	 enumerated the commodities on which a single point tax was leviable under subsection 3(b) of section 5 and there were 13 entries in this Schedule. None of these 13 entries included shrimps	 prawns and lobsters with the result that the purchases of shrimps	 prawns and lobsters were not exigible to purchase tax. This position continued right from the time of the original enactment until 31st March 1973 when the Karnataka Sales Tax (Amendment) Act	 1973 introduced a new Entry '13a ' in the Third Schedule with effect from Ist April 1973. This entry included "shrimps	 prawns and lobsters" in the Third Schedule. There was another amendment made in the Karnataka Act in 1978 by the Karnataka Sales Tax (Amendment) Act	 1978 and section 9 of this Amending Act made certain amendments in Entry 13a with retrospective effect	 so that from 1st April 1973 Entry 13a included in the Third Schedule "shrimps	 prawns and lobsters other than processed or frozen shrimps	 prawns and lobsters" and the Explanation to Entry 13a provided that "processing" shall include "all or any of the following	 namely	 cutting of head or tail	 peeling	 deveining	 cleaning or freezing". But	 Entry 13a in this form continued only up to 31st August 1978 and with effect from 1st September	 1978	 a further amendment was made by the Karnataka Taxation and Certain Other Laws (Amendment) Act	 1982 and after this amendment which was made 373 with retrospective effect from 1st September 1978	 Entry 13a read: "Shrimps	 prawns and lobsters other than frozen shrimps	 prawns and lobsters". The amendment made by the 1982 Amendment Act excluded from the scope and ambit of Entry 13a	 frozen shrimps	 prawns and lobsters and brought within the net of taxation only purchases of shrimps	 prawns and lobsters other than frozen shrimps	 prawns and lobsters	 provided they were last purchases within the State. It is in the context of these provisions of the Karnataka Act that we have to consider whether shrimps	 prawns and lobsters	 when subjected to the process of cutting of heads and tails	 peeling	 deveining	 cleaning and freezing	 retain their original character and identity or become another distinct commodity. The test which has to be applied for the purpose of determining whether a commodity subjected to processing retains its original character and identity is as to whether the processed commodity is regarded in the trade by those who deal in it as distinct in identity from the original commodity or it is regarded	 commercially and in the trade	 the same as the original commodity. It is necessary to point out that it is not every processing that brings about change in the character and identity of a commodity. The nature and extent of processing may vary from one case to another and indeed there may be several stages of processing and perhaps different kinds of processing at each stage. With each process suffered	 the original commodity experiences change. But it is only when the change or a series of changes take the commodity to the point where commercially it can no longer be regarded as the original commodity but instead is recognised as a new and distinct commodity that it can be said that a new commodity	 distinct from the original	 has come into being. The test is whether in the eyes of those dealing in the commodity or in commercial parlance the processed commodity is regarded as distinct in character and identity from the original commodity vide Sales Tax Board vs PIO Food Packers ; It is clear on an application of this test that processed or frozen shrimps	 prawns and lobsters are commercially regarded the same commodity as raw shrimps	 prawns and lobsters. When raw shrimps	 prawns and lobsters are subjected to the process of cutting of heads and tails	 peeling	 deveining	 cleaning and freezing	 they do not cease to be shrimps	 prawns and lobsters and become another distinct commodity. They are in common parlance known as shrimps	 prawns and lobsters. There is no essential difference between raw shrimps	 prawns and lobsters and processed or frozen shrimps	 prawns and lobsters. 374 The dealer and the consumer regard both as shrimps	 prawns and lobsters. The only difference is that processed shrimps	 prawns and lobsters are ready for the table while raw shrimps	 prawns and lobsters are not	 but still both are	 in commercial parlance	 shrimps	 prawns and lobsters. It is undoubtedly true that processed shrimps	 prawns and lobsters are the result of subjecting raw shrimps	 prawns and lobsters to a certain degree of processing but even so they continue to possess their original character and identity as shrimps	 prawns and lobsters	 notwithstanding the removal of heads and tails	 peeling	 deveining and cleaning which are necessary for making them fit for the table. Equally it makes no difference in character or identity when shrimps	 prawns and lobsters are frozen for the purpose of preservation and transfer to other places including far off countries in the world. There can therefore be no doubt that processed or frozen shrimps	 prawns and lobsters are not a new and distinct commodity but they retain the same character and identity as the original shrimps	 prawns and lobsters. This view finds ample support from the decision of the Supreme Court of the United States in East Texas Motor Freight Lines vs Frozen Food Express	 ; 	 where the question was whether dressed and frozen chicken was a commercially distinct article from the original chicken. The Supreme Court held that it was not a commercially distinct article but was commercially and in common parlance the same article as chicken. The Supreme Court pointed out: "Killing	 dressing and freezing a chicken is certainly a change in the commodity. But it is no more drastic a change than the change which takes place in milk from pasturising	 homogenizing	 adding vitamin concentrates	 standardising and bottling". and proceeded to add in words clear and explicit: " . . there is hardly less difference between cotton in the field and cotton at the gin or in the bale or between cottonseed in the field and cottonseed at the gin	 than between a chicken in the pen and one that is dressed. The ginned and baled cotton and the cottonseed	 as well as the dressed chicken	 have gone through a processing stage. But neither has been "manufactured" in the normal sense of the word." 375 If dressed and frozen chicken is not a commercially distinct article from the original chicken	 it must follow on a process of analogical reasoning that processed and frozen shrimps	 prawns and lobsters cannot be regarded as commercially distinct commodity from raw shrimps	 prawns and lobsters. This conclusion on principle was not disputed by the High Court in its judgment and the High Court conceded that even after processing such as cutting of heads and tails	 peeling	 deveining	 cleaning and freezing	 shrimps	 prawns and lobsters subjected to such processing continued in common parlance to be called 'shrimps	 prawns and lobsters '. But the High Court took the view that Entry 13a after the amendment effected in it with retrospective effect from 1st September	 1978	 made a distinction between raw shrimps	 prawns and lobsters and processed or frozen shrimps	 prawns and lobsters. In view of this distinction made in Entry 13a	 it was not possible to hold that processed or frozen shrimps	 prawns and lobsters were the same commodity as raw shrimps	 prawns and lobsters. The argument was that when the State Legislature itself made a distinction between these categories of commodities by making purchases of one category amenable to sales tax under Entry 13a and leaving out of the scope of taxation under Entry 13a the other category	 how could it be said that both these categories represent the same commodity and there is no difference in character and identity between the two. This argument	 we are afraid	 is not well founded. It is based on a total misapprehension in regard to the true object and intendment of Entry 13a and it erroneously seeks to project that Entry in the interpretation and application of Section 5 sub section (3) of the . In fact Entry 13a as amended	 supports the argument that even processed or frozen shrimps	 prawns and lobsters are known commercially and in the trade as 'shrimps	 prawns and lobsters '. It is because Entry 13a as it stood prior to its amendment	 would have	 on the plain natural meaning of the expression 'shrimps	 prawns and lobsters ' included processed and frozen shrimps	 prawns and lobsters	 that it became necessary for the State Legislature to amend Entry 13a with retrospective effect so as to exclude from the scope and ambit of that entry processed or frozen shrimps	 prawns and lobsters. Now when the State Legislature excluded processed or frozen shrimps	 prawns and lobsters from the ambit and coverage of Entry 13a	 its object obviously was that the last purchases of processed or frozen shrimps	 prawns and lobsters in the State should not be exigible to State Sales Tax under Entry 13a. The State Legislature was not at all concerned with the question as to 376 whether processed or frozen shrimps	 prawns and lobsters are commercially the same commodity as raw shrimps	 prawns and lobsters or are a different commodity and merely because the State Legislature made a distinction between the two for the purpose of determining exigibility to State Sales Tax	 it cannot be said that in commercial parlance or according to popular sense	 processed or frozen shrimps	 prawns and lobsters are recognised as different commodity distinct from raw shrimps	 prawns and lobsters. The question whether raw shrimps	 prawns and lobsters after suffering processing retain their original character or identity or become a new commodity has to be determined not on the basis of a distinction made by the State Legislature for the purpose of exigibility to State Sales Tax because even where the commodity is the same in the eyes of the persons dealing in it the State Legislature may make a classification for determining liability to sales tax. This question	 for the purpose of the 	 has to be determined on the basis of what is commonly known or recognised in commercial parlance. If in commercial parlance and according to what is understood in the trade by the dealer and the consumer	 processed or frozen shrimps	 prawns and lobsters retain their original character and identity as shrimps	 prawns and lobsters and do not become a new distinct commodity and are as much 'shrimps	 prawns and lobsters '	 as raw shrimps	 prawns and lobsters	 sub section (3) of section 5 of the would be attracted and if with a view to fulfilling the existing contracts for export	 the assessee purchases raw shrimps	 prawns and lobsters and processes and freezes them	 such purchases of raw shrimps	 prawns and lobsters would be deemed to be in course of export so as to be exempt from liability to State Sales Tax. Here in the present case	 it was not disputed on behalf of Revenue that the purchases of raw shrimps	 prawns and lobsters were made by the appellants for the purpose of fulfilling existing contracts for export and after making such purchases the appellants subjected raw shrimps	 prawns and lobsters purchased by them to the process of cutting of heads and tails	 peeling	 deveining	 cleaning and freezing and exported such processed and frozen shrimps	 prawns and lobsters in fulfilment of the contracts for export. The only argument raised on behalf of Revenue was that the goods which were exported were not the same as the goods purchased by the appellants because raw shrimps	 prawns and lobsters after processings ceased to be the same commodity and became a new distinct commodity. But	 for reasons which we have already discussed	 this argument cannot be sustained. 377 The shrimps	 prawns and lobsters purchased by the appellants did not lose their original character and identity when they were subjected to processing for the purpose of export. So far as commercial parlance or popular usage is concerned	 they remained the same goods and hence the purchases of raw shrimps	 prawns and lobsters by the appellants must be held to be purchases in the course of export and hence exempt from liability to tax under the Karnataka Sales Tax Act. We	 accordingly	 allow the appeal	 set aside the judgment of the High Court as also the Orders made by the Assistant Commissioner of Commercial Taxes and direct that the purchases of raw shrimps	 prawns and lobsters made by the appellants for the purpose of fulfilling the existing contracts for export shall not be included in the tax able turnover of the appellants. The respondents will pay the costs of the appeal to the appellants. S.R. Appeal allowed.

The appellants are a partnership firm carrying on business as dealers in shrimps	 prawns and lobsters and other sea food products. They are registered as a dealer both under the Karnataka Sales Tax Act	 1957 and the . The appellants in the course of their business purchase shrimps	 prawns and lobsters locally for the purpose of complying with orders for export and they cut the heads and tails of the shrimps prawns and lobsters purchased by them	 peel	 devein and clean them and after freezing and packing them in cartons	 they export them to foreign buyers outside India under prior contracts of sale. The appellants filed their statement of monthly turnover for the month of April 1982 before the Assistant Commissioner of Commercial Taxes	 Mangalore and claimed total exemption from tax in respect of the purchase turn over of shirmps	 prawns and lobsters under the Karnataka Sales Tax Act	 1957. The Assistant Commissioner of Commercial Taxes rejected the said claim by his two assessment orders and issued two notices of demand for Rs.52	610.71 and Rs.44	237.88 respectively against the appellants. The appellants	 thereupon	 filed a writ petition in the High Court of Karnataka challenging all the said orders and notices of demand and sought appropriate direction	 order or writ restraining the respondents from imposing or collecting purchase tax on purchase turn over of shrimps	 prawns and lobsters under the Karnataka Sales Tax Act	 1957. The writ petition was dismissed by the High Court	 but having regard to the importance of the question 368 involved a certificate under Article 133 of the Constitution was granted by the High Court. Allowing the appeal	 the Court ^ HELD: 1.1. In order to attract the applicability of sub section (3) of section 5 of the 	 it is necessary that the goods which are purchased by an assessee for the purpose of com plying with the agreement or order for or in relation to export	 must be the same goods which are exported out of the territory of India. The words "those goods" in sub section (3) are clearly referable to "any goods" mentioned in the preceding part of the sub section and	 therefore	 the goods purchased by the assessee and the goods exported by him must be the same. If by reason of any processing to which the goods may be subjected after purchase	 they change their identity so that commercially they can no longer be regarded as the original goods	 but instead become a new and different kind of goods and then they are exported	 the purchases of original goods made by the assessee cannot be said to be purchases in the course of export. 1.2 The test which has to be applied for the purpose of determining whether a commodity subjected to processing retains its original character and identity is as to whether the processed commodity is regarded in the trade by those who deal in it as distinct in identity from the original commodity or it is regarded	 commercially and in the trade	 the same as the original commodity. It is not every processing that brings about change in the character and identity of a commodity. The nature and extent of processing may vary from one case to another and indeed there may be several stages of processing and perhaps different kinds of processing at each stage. With each process suffered	 the original commodity experiences change. But it is only when the change or a series of changes take the commodity to the point where commercially it can no longer be regarded as the original commodity but instead is recognised as a new and distinct commodity that it can be said that a new commodity	 distinct from the original. has come into being. Sales Tax Board vs PIO Food Packers ; applied. 1.3 The shrimps	 prawns and lobsters purchased by the appellants did not lose their original character and identity when they were subjected to processing for the purpose of export. so far as commercial parlance or popular usage is concerned	 they remained the same goods. 369 The dealer and the consumer regarded both as shrimps	 prawns and lobsters. The only difference is that processed shrimps	 prawns and lobsters are ready for the table while raw shrimps	 prawns and lobsters are not but still both are in commercial parlance	 shrimps	 prawns and lobsters. The fact that they undergo a certain degree of processing or frozen for the purpose of preservation and transfer to other places including far off countries in the world makes no difference in character or identity as the original shrimps	 prawns and lobsters. Hence	 the purchases of raw shrimps	 prawns and lobsters by the appellants must be held to be purchases in the course of export and hence exempt from liability to tax under the Karnataka Sales Tax Act	 1957 as amended. [377A B] East Taxes Motor Freight Lines vs Frozen Food Express (100) L.Ed. 917 quoted with approval. 1.4 Entry 13a of the Third Schedule to the Karnataka Act also makes it clear that even processed or frozen shrimps	 prawns and lobsters are known commercially and in the trade as shrimps	 prawns and lobsters. When the State Legislature excluded processed or frozen shrimps	 prawns and lobsters from the ambit and coverage of Entry 13a	 its object obviously was that the last purchases of processed or frozen shrimps	 prawns and lobsters in the State should not be exigible to State Sales Tax under Entry 13a. The State Legislature was not at all concerned with the question as to whether processed or frozen shrimps	 prawns and lobsters are commercially the same commodity as raw shrimps	 prawns and lobsters or are a different commodity. Merely because the State Legislature made a distinction between the two for the purpose of determining exigibility to State Sales Tax	 it cannot be said that in commercial parlance or according to popular sense	 processed or frozen shrimps	 prawns and lobsters are recognised as different commodity distinct from raw shrimps	 prawns and lobsters. Further the question whether raw shrimps	 prawns and lobsters after suffering processing retain their original character or identity or become a new commodity has to be determined not on the basis of a distinction made by the State Legislature for the purpose of exigibility to State Sales Tax because even where the commodity is the same in the eyes of the persons dealing in it the State Legislature may make a classification for determining liability to sales tax.