Common parlance test excludes cotton sewing thread from cotton yarn exemption under a strict sales tax notification reading.

Cotton sewing thread on cops and cones was treated as a distinct commercial commodity from cotton yarn for sales tax exemption purposes. Applying the common parlance and commercial identity tests, the Allahabad HC held that the thread had different uses and a separate market identity, and did not retain the character of yarn merely because it was made by twisting or processing yarn. It further noted that exemption notifications must be strictly construed. On that basis, cotton sewing thread on cops and cones was not covered by the exemption meant for cotton yarn on cops and cones.

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Issues: Whether cotton sewing thread on cops and cones was covered by the exemption for cotton yarn on cops and cones under the relevant sales tax notification.

Analysis: Cotton sewing thread, though made from cotton yarn, was held to be a distinct commercial commodity in ordinary parlance. The Court applied the common parlance and commercial identity tests, and also noted that exemption notifications must be strictly construed. It found that cotton yarn and cotton sewing thread had different uses, different commercial identity, and that the thread did not retain the character of yarn merely because it was produced from yarn by twisting or processing.

Conclusion: Cotton sewing thread on cops and cones was not cotton yarn on cops and cones and was not entitled to exemption under the notification.

Ratio Decidendi: Where a processed article acquires a distinct commercial identity and is known in ordinary parlance as a different commodity, it does not fall within an exemption granted to the original commodity.

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