Common parlance test governs sales tax classification of medicinal oxygen and nitrous oxide as industrial gas

Classification under sales tax law turns on the commodity's common parlance and trade understanding, not on scientific or technical distinctions. Entry 121 of the Karnataka Sales Tax Act was directed to industrial gas, and medicinal oxygen, being a purified medical-use commodity, was not understood in trade as industrial oxygen; mere possible industrial use was insufficient. The same reasoning applied to nitrous oxide used for anaesthesia. The burden remained on the Revenue to bring the goods within the taxing entry, and the authorities' classification as industrial gas was unsustainable, so the assessees succeeded.

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Issues: Whether medicinal oxygen and nitrous oxide used for anaesthesia fall within entry 121 of the Second Schedule to the Karnataka Sales Tax Act, 1957 as industrial gas.

Analysis: Classification under sales tax legislation depends on the sense in which the commodity is understood in common parlance by traders and users, not on scientific or technical distinctions. Entry 121 is directed to industrial gas, and the illustrative words following that head must be read in context. Medicinal oxygen, being a purified and distinct commodity used for medical purposes, is not treated in trade as industrial oxygen, and its ordinary user would not regard it as an industrial gas. The burden rested on the Revenue to bring the commodity within the taxing entry, and mere possibility of use in industry was not enough. The same reasoning applied to nitrous oxide used for anaesthesia.

Conclusion: Medicinal oxygen and nitrous oxide used for anaesthesia do not fall within entry 121 as industrial gas, and the classification made by the authorities was ? No, should be plain. The classification was unsustainable and the assessees succeeded.

Ratio Decidendi: In construing sales tax entries, a commodity must be classified according to its common parlance and trade understanding, and a taxing entry covering industrial gas cannot be extended to a distinct medical-use gas merely because of scientific similarity or possible industrial use.

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