Commercial classification of cardboard products upheld where packing cases and cartons remained within the notified entry.

Sales of cartons, packing materials, boxes and cases made from duplex board or cardboard were treated as falling within item 11 of the 5 May 1973 Haryana sales tax notification, because the entry covered paper other than newsprint, cardboards, straw boards and their products. The finished goods remained products of cardboard despite their trade description, so they were taxable at the first stage of sale. Duplex board was held to be only a variety of cardboard, since polishing on one side rather than both was not a material commercial distinction. The notification therefore applied to duplex board and cardboard as the same commodity.

---

---

Issues: (i) whether sales of cartons, packing materials, boxes and cases manufactured from duplex board or cardboard fell within item No. 11 of the notification dated 5 May 1973 issued under the Haryana General Sales Tax Act, 1973; (ii) whether duplex board and cardboard were the same commodity and liable to tax at the first stage of sale.

Issue (i): whether sales of cartons, packing materials, boxes and cases manufactured from duplex board or cardboard fell within item No. 11 of the notification dated 5 May 1973 issued under the Haryana General Sales Tax Act, 1973

Analysis: Item No. 11 covered paper other than newsprint, cardboards, straw boards and their products. The packing cases, boxes and cartons manufactured by the dealer were products made from cardboard or duplex board. The description of the finished goods in trade did not alter their character as products of cardboard. The entry was wide enough to include all goods manufactured from cardboard.

Conclusion: The goods fell within item No. 11 and were taxable at the first stage of sale.

Issue (ii): whether duplex board and cardboard were the same commodity and liable to tax at the first stage of sale

Analysis: Duplex board was only polished on one side, whereas cardboard was polished on both sides. This was only a minor distinction and did not make them different commodities. Duplex board was held to be a variety or category of cardboard rather than an independent commodity.

Conclusion: Duplex board and cardboard were the same commodity for the purpose of the notification and were liable to tax at the first stage of sale.

Final Conclusion: The reference was answered against the assessee and in favour of the department, because the manufactured packing materials were treated as products of cardboard and duplex board within the notified entry.

Ratio Decidendi: In sales tax classification, goods must be understood in their popular and commercial sense, and products manufactured from a notified commodity remain within the entry where the notification expressly covers that commodity and its products.

---