Predominant constituent test governs mixed yarn classification where cotton remains the identity-forming component.

Where a tariff or sales tax schedule contains no specific entry for mixed or blended yarn, classification turns on the predominant constituent that preserves the commodity's commercial identity. Yarn containing 80 per cent to 85 per cent cotton and 15 per cent to 20 per cent viscose was treated as cotton yarn because the cotton component remained dominant and identity-forming, and the addition of viscose did not create a commercially distinct article. On that basis, the goods fell within the cotton yarn entry and not the residuary taxable entry.

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Issues: Whether yarn consisting predominantly of cotton with a smaller viscose component was liable to be classified as cotton yarn under entry 2 of Schedule II, Part A to the Gujarat Sales Tax Act, 1969, or as a residuary taxable item under entry 13 of Schedule III.

Analysis: The applicable entry taxed cotton yarn but excluded cotton yarn waste, while the statutory scheme contained no separate entry for mixed or blended yarn. The Court held that where a commodity has no specific blended-yarn entry, classification must depend on the predominant constituent. Since the yarn in question contained 80 per cent to 85 per cent cotton and only 15 per cent to 20 per cent viscose, the cotton component remained the dominant and identity-forming element. The addition of viscose did not destroy the character of the goods as cotton yarn, nor create a commercially distinct article attracting the residuary entry.

Conclusion: The yarn was cotton yarn within entry 2 of Schedule II, Part A, and not a residuary item under entry 13 of Schedule III; the answer was against the department and in favour of the assessee.

Ratio Decidendi: In the absence of a specific entry for mixed or blended yarn, a commodity is to be classified according to its predominant constituent if that constituent preserves its commercial identity.

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