Used oil classification under sales tax entry depends on usability, and waste oil used for grease was taxable on purchase.

Used or drained oil purchased as raw material for grease manufacture was not "lubricating oil" within Entry No. 47, because the governing test was its actual usability and not the retention of some chemical characteristics. Oil that cannot be straightaway reused or sold as lubricating oil without further processing falls outside the single-point entry. The purchase therefore belonged to the multi-point scheme, and since no tax had been paid at any earlier stage on those purchases, section 7-A of the Tamil Nadu General Sales Tax Act, 1959 applied and the purchase turnover was liable to tax.

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Issues: Whether used or drained oil purchased for manufacture of grease retained its character as lubricating oil under Entry No. 47 of List I, and if not, whether the purchase turnover was liable to tax under section 7-A of the Tamil Nadu General Sales Tax Act, 1959.

Analysis: The determining criterion was the use to which the oil could still be put. Oil that has been drained after use as lubricating oil, and which cannot straightaway be used or sold again as lubricating oil without further processing, is not lubricating oil for the purpose of the entry. The presence of some chemical characteristics of lubricating oil was held insufficient. Since the oil purchased by the assessee was only waste oil used as raw material for manufacture of grease, it fell outside the single-point entry and belonged to the multi-point scheme. As no tax had been paid at any prior stage on such purchases, section 7-A was attracted.

Conclusion: The used or drained oil was not lubricating oil within Entry No. 47, and the purchase turnover was rightly taxed under section 7-A.

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