Commodity classification under sales tax turns on general characteristics, with garlic exempt and salt petre taxed as a chemical.

Dry green garlic was treated as exempt as a vegetable under the Tamil Nadu General Sales Tax Act because, on the earlier binding view followed by the Tribunal, green garlic that was dried but not dehydrated continued to fall within the relevant exemption notification; the exemption on garlic turnover was therefore upheld. Salt petre was held to fall within item 138 of the First Schedule as a chemical taxable at 8 per cent because commodity classification depends on its general commercial and physical characteristics under the relevant entry, not on a purchaser's particular end use; the contrary statutory comparisons relied on were held inapposite, and the classification as a taxable chemical was sustained.

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Issues: (i) Whether dry green garlic was entitled to exemption as a vegetable under the Tamil Nadu General Sales Tax Act, 1959. (ii) Whether salt petre fell within item 138 of the First Schedule to the Tamil Nadu General Sales Tax Act, 1959 as a chemical liable to tax at 8 per cent.

Issue (i): Whether dry green garlic was entitled to exemption as a vegetable under the Tamil Nadu General Sales Tax Act, 1959.

Analysis: The turnover of garlic was treated by the Tribunal as exempt on the footing that green garlic, even when dried but not dehydrated, remained a vegetable within Notification No. 1764/Revenue dated 05.04.1960. The claim was consistent with the earlier view of the Court that garlic sales were entitled to exemption as vegetable under section 17 of the Tamil Nadu General Sales Tax Act, 1959. As the Tribunal had followed the earlier binding decision, no infirmity was found in that part of the order.

Conclusion: The exemption on the sales turnover of garlic was upheld and the assessee succeeded on this issue.

Issue (ii): Whether salt petre fell within item 138 of the First Schedule to the Tamil Nadu General Sales Tax Act, 1959 as a chemical liable to tax at 8 per cent.

Analysis: Salt petre was described by reference to its chemical properties and commercial uses, and the Court held that classification under a taxing entry must be determined by the general properties of the commodity and not merely by the particular use to which a purchaser may put it. The decisions relied on by the Tribunal under different statutes and different notification language were held not to control the meaning of item 138. On a plain reading of the entry, salt petre was held to be a chemical within the relevant schedule entry.

Conclusion: Salt petre was held to be a chemical under item 138, and the assessee failed on this issue.

Final Conclusion: The assessee retained the benefit of exemption on garlic, while the Revenue succeeded on the classification of salt petre as a taxable chemical; the revision petitions were therefore allowed in part.

Ratio Decidendi: Classification of a commodity for tax purposes depends on its general commercial and physical characteristics under the relevant tariff entry, and not solely on the particular end use for which it is purchased.

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