Classification of adhesive as a chemical rejected where product was sold for binding use without chemical change.

An all-purpose adhesive sold as Fiksol-S. 69 was held not to fall within item 138 of the First Schedule to the Tamil Nadu General Sales Tax Act, 1959 as "dyes and chemicals". The article had to be identified by its character as sold and by its use, not merely by its chemical ingredients; because it was used only for binding surfaces and did not produce any chemical effect or chemical change, it was not a chemical item within the entry. As an end-product rather than an intermediary chemical product, it was liable only to multi-point tax.

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Issues: Whether the adhesive sold as Fiksol-S. 69 fell within item 138 of the First Schedule to the Tamil Nadu General Sales Tax Act, 1959 as "dyes and chemicals", or was outside that entry and liable only to multi-point tax.

Analysis: The commodity was an all-purpose adhesive used for binding different surfaces. The nature of the article could not be determined merely from its chemical ingredients; what mattered was the character of the goods as sold and the effect of its use. Since the adhesive was used only for binding purposes and its use did not produce any chemical effect or chemical change, it could not be regarded as a chemical item within item 138. The article was an end-product and not an intermediary chemical product. The view that similar adhesives did not fall within "chemicals" supported this conclusion.

Conclusion: Fiksol-S. 69 did not fall under item 138 of the First Schedule and was liable only to multi-point tax, not tax at 8 per cent at the first sale.

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