Common parlance test treats coconut fibre as coir, extending State exemption and nil Central sales tax liability.

Coconut fibre was treated as part of the coir group for exemption purposes under the Kerala General Sales Tax Act, because the schedule and exemption notifications used a consistent commercial understanding of coir, coir yarn, coconut fibre, and related products. Applying the common parlance approach, the Court found coconut fibre was not commercially distinct from coir in the relevant taxing entries and therefore fell within the State exemption for the periods in question. As the commodity was generally exempt under State sales tax law, section 8(2A) of the Central Sales Tax Act operated to make the Central tax payable nil.

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Issues: Whether coconut fibre was to be treated as coir for the purpose of exemption under the Kerala General Sales Tax Act, 1963, and whether such State exemption attracted nil tax liability under section 8(2A) of the Central Sales Tax Act, 1956.

Analysis: The State schedule and exemption notifications treated coir, coir yarn, coconut fibre, and related coir products as part of the same commercial group. The Court applied the common parlance approach and held that coconut fibre was not commercially distinct from coir in the context of the taxing entries. The entries and notifications showed a consistent legislative understanding that the goods were interconnected, with coconut fibre falling within the exempted State commodity for the relevant periods. Once the commodity was exempt generally under the State sales tax law, section 8(2A) of the Central Sales Tax Act, 1956 operated to make the Central tax payable nil.

Conclusion: Coconut fibre was held to be covered by the State exemption as coir, and the assessee was entitled to the benefit of section 8(2A) of the Central Sales Tax Act, 1956.

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