Tax classification of liquid anhydrous ammonia turns on popular sense and sale character, not end-use alone.

Anhydrous ammonia sold in liquid form was held not to answer the description of "industrial gas" under entry No. 121 of the Karnataka Sales Tax Act, 1957. Classification under a taxing entry depends on the popular sense of the commodity and its sale character, not merely on one possible end-use by purchasers. As the product was essentially a chemical with varied uses and required processing before being used as gas, it could not be placed under the industrial gas entry on a user-based theory. Where the competing entries were doubtful, the interpretation more favourable to the assessee was applied.

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Issues: Whether anhydrous ammonia sold in liquid form is classifiable as "industrial gas" under entry No. 121 of the Second Schedule to the Karnataka Sales Tax Act, 1957, or as "chemicals of all kinds" under entry No. 79 of the Second Schedule.

Analysis: Classification under a taxing entry depends on the popular sense of the commodity and its sale character, not merely on one possible end-use by purchasers. The commodity was sold and stored in liquid form, and its description showed that it is essentially a chemical capable of varied uses, including use as fertilizer and only after processing as gas for certain purposes. The theory of user could not be the sole basis for placing it under the industrial gas entry. The competing-entry principle also required the interpretation more favorable to the assessee where the commodity did not clearly answer the gas description.

Conclusion: Anhydrous ammonia sold by the appellant did not fall under entry No. 121 as industrial gas and was not liable to be taxed on that footing.

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