Common parlance and predominant use test classifies cotton rolled bandages as drugs and medicines, not handloom fabrics.

Cotton rolled bandages were held classifiable for sales tax purposes by their common parlance meaning and predominant use, not by their textile origin. Because they were manufactured, marketed, purchased and used as bandages to cover wounds or cuts, and had a distinct trade identity after processing, they fell within the entry for drugs and medicines under Schedule II, Part A. They did not fall within the entry for handloom fabrics of all varieties under Schedule I. The Court also treated the definition of "drug" in the Drugs and Cosmetics Act as supporting the ordinary commercial understanding of bandages as articles used in treatment and healing.

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Issues: Whether cotton rolled bandages sold by the dealer were classifiable as "drugs and medicines" under entry 26(1) of Schedule II, Part A to the Gujarat Sales Tax Act, 1969, or as "handloom fabrics of all varieties" under entry 33 of Schedule I to the Act.

Analysis: The Court applied the common parlance test and the test of primary or predominant use to determine the character of the commodity for sales tax purposes. Cotton rolled bandages were manufactured, marketed, purchased and used as bandages, not as handloom fabric. Their principal and only use was to cover wounds or cuts, and after processing and cutting they became a distinct marketable commodity known in trade as bandages. The Court also referred to the definition of "drug" in section 3(b)(i) of the Drugs and Cosmetics Act, 1940, as supportive of the ordinary and commercial understanding of the commodity as an article used in treatment and healing.

Conclusion: Cotton rolled bandages fall within entry 26(1) of Schedule II, Part A as drugs and medicines, and do not fall within entry 33 of Schedule I as handloom fabrics of all varieties.

Final Conclusion: The reference was answered against the assessee and in favour of the State, with the classification of cotton rolled bandages upheld as taxable under the drugs and medicines entry.

Ratio Decidendi: For sales tax classification, the nature of a commodity must be determined by its common parlance understanding and predominant use; an article manufactured and sold as a bandage for wound coverage is classifiable as a drug or medicine rather than as handloom fabric.

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