Classification of coir products on physical verification sustained exemption under sales tax notification.

Physical verification of the goods showed that the products were essentially coir products, with latex used only in a small proportion to give shape, and not rubberised coir products. Because the Tribunal was the final fact-finding authority and its classification was based on inspection of the goods, there was no basis to interfere with its finding that the disputed turnover related to coir products. The turnover therefore qualified for exemption under the notification issued under section 17 of the Tamil Nadu General Sales Tax Act, 1959.

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Issues: Whether the disputed turnover represented sales of coir products or rubberised coir products, and whether exemption under the notification issued under section 17 of the Tamil Nadu General Sales Tax Act, 1959 was available.

Analysis: The products were produced before the Tribunal and physically verified. On such verification, the Tribunal found that the goods were essentially coir products and that latex formed only a small portion only to give shape. It further found that rubber was not blended with the coir so as to characterise the goods as rubberised coir products. As the Tribunal was the final fact-finding authority and its conclusion was based on physical inspection of the goods, there was no ground to interfere with its finding that the turnover related to coir products.

Conclusion: The disputed turnover was held to be sales of coir products, and the assessee was entitled to exemption under the notification issued under section 17 of the Tamil Nadu General Sales Tax Act, 1959.

Ratio Decidendi: Where the fact-finding authority, on physical verification of the goods, concludes that the product is essentially exempt commodity and not a dutiable variant, its finding on classification and consequent exemption will ordinarily not be interfered with.

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