Cotton rags are not cotton fabrics for sales tax purposes and are taxable as unspecified goods.

Cotton rags or chindies are not "cotton fabrics" for sales tax purposes because the term must be understood in common or commercial parlance as cotton cloth used as fabric or for making clothing and other cotton goods. Old pieces of cloth that have lost their utility as fabrics fall outside that description. A prior clarification could not displace the governing legal position where the material law and binding precedent pointed the other way. The goods were therefore liable to tax as unspecified goods under section 5(1) of the Karnataka Sales Tax Act, 1957.

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Issues: Whether cotton rags or chindies are cotton fabrics exempt from tax, or whether they are liable to tax as unspecified goods under the Karnataka Sales Tax Act, 1957.

Analysis: The expression used in a sales tax enactment must be understood in its common or commercial parlance. On that test, cotton fabrics mean cotton cloth used as such or for manufacturing clothing and other cotton goods, and do not include rags, chindies, or old pieces of cloth that have lost their utility as fabrics. The earlier clarification relied upon by the assessee could not govern the issue where the material law and binding precedent pointed the other way, and the Commissioner's power to issue such clarifications was also found not to support the assessee's case.

Conclusion: Cotton rags or chindies are not cotton fabrics and are liable to tax under section 5(1) of the Karnataka Sales Tax Act, 1957 as unspecified goods.

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