Commercial sense governs tax entries: industrial diamonds are not "precious stones" under the sales tax schedule.

Industrial diamonds were held not to fall within item 30 of Schedule I as "precious stones" because the entry had to be construed in its commercial sense, and the illustrative words following "namely" described gem stones used for ornamentation rather than low-grade diamonds used in tools and drilling. On that construction, departmental instructions could not alter the charging entry. The Tribunal's view that industrial diamonds were taxable only at the multi-point rate was upheld, and the assessment and penalty based on item 30 could not stand.

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Issues: Whether industrial diamonds fall within item 30 of Schedule I of the Madras General Sales Tax Act, 1959 as "precious stones", and whether the assessment and penalty based on that classification could be sustained.

Analysis: Item 30 used the expression "precious stones" and then added specific examples by the word "namely", showing that the listed stones were descriptive of the class of precious stones and not an exhaustive inclusion of every kind of diamond. The expression had to be understood in its commercial sense, and in that sense a precious stone was a gem of value and beauty used for ornamentation. Industrial diamonds were found to be low-grade diamonds used in tools and implements for cutting and drilling, lacking the lustre, brilliance, rarity, and ornamental use associated with gem diamonds. They were therefore not precious stones within the item. Departmental instructions as to tax treatment could not control the legal construction of the charging entry.

Conclusion: Industrial diamonds do not fall within item 30 of Schedule I of the Madras General Sales Tax Act, 1959, and the Tribunal's view that they were taxable only at the multi-point rate was upheld.

Final Conclusion: The State's challenge failed, the assessments and penalty based on item 30 could not stand, and the tax cases were dismissed with costs.

Ratio Decidendi: In construing a taxing entry, words are to be read in their commercial sense and, where a specific class is described by illustrative words, only articles answering that commercial description fall within the entry.

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