Tax classification by actual use and character of sale determines whether turpentine oil falls under oils or paints and varnishes.

Vegetable turpentine oil, though capable of use in paints and varnishes as well as as a raw material for camphor manufacture, was classified by reference to the manner in which it was sold and used. The governing principle applied was that when a commodity answers more than one description, its tax entry depends on the character in which it is marketed and the actual use shown by the surrounding facts. As most sales were to a buyer using the product as oil, the relevant turnover could not be treated as goods meant for painting and varnishing merely because that was another possible use. The sales therefore fell under oils of all kinds and were taxable at 4 per cent.

---

---

Issues: Whether vegetable turpentine oil sold by the assessee was classifiable under the entry for paints and varnishes, attracting tax at 10 per cent, or under the entry for oils of all kinds, attracting tax at 4 per cent, having regard to its use by the purchaser as raw material for camphor manufacture and also in paints and varnishes.

Analysis: Vegetable turpentine oil was capable of use both in paints and varnishes and as a raw material for manufacture of camphor. The governing principle applied was that where a commodity answers more than one description, its tax classification is determined by the manner in which it is sold and put to use. The undisputed facts showed that 85 per cent of the assessee's sales were to a buyer who used the product as oil. On that footing, the commodity sold in that turnover could not be treated as an item meant for painting and varnishing merely because it was capable of such use. The earlier decisions relied upon supported the view that the relevant classification turns on the character in which the article is sold and used.

Conclusion: The relevant sales of vegetable turpentine oil fell under the entry for oils of all kinds and were taxable at 4 per cent, not under the entry for paints and varnishes at 10 per cent. The revision was therefore rejected.

---