Trade and common parlance classification governed liquid gold's tax treatment as a chemical, not bullion or an unspecified item.

Liquid gold was treated as a chemical for sales tax purposes because it was produced by a chemical process from gold bullion and other substances, contained only a small proportion of gold in colloidal form, and was used commercially for decorating glass and ceramic ware. Its trade and common parlance identity, together with its mode of manufacture and ordinary use, showed that it was not understood as gold metal, bullion, specie, or an unspecified item. The article was therefore classifiable as a chemical rather than as bullion or an unclassified commodity.

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Issues: Whether liquid gold was taxable as a chemical, and if not, whether it was taxable as bullion or as an unspecified item.

Analysis: Liquid gold was found to be a product obtained by a chemical process from gold bullion and other chemical substances, containing only a small proportion of gold in colloidal form. It was not sold or used as gold metal, bullion, specie, or for the ordinary uses of gold. Its commercial identity and specialised use for decorating glass and ceramic ware showed that in trade and in common parlance it was understood as a chemical product. The scientific nature of the term supported reference to its chemical composition and mode of manufacture. On that basis, the article could not be classified as bullion or as an unspecified item.

Conclusion: Liquid gold was rightly taxed as a chemical and was not taxable as bullion or as an unspecified item.

Final Conclusion: The reference was answered in favour of the Revenue by upholding the classification of liquid gold as a chemical.

Ratio Decidendi: For sales tax classification, where an article has a recognised commercial identity and scientific character, its tax head must be determined by its trade and common parlance understanding, its mode of manufacture, and its ordinary commercial use.

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