Goods classification and account rejection require strict factual and legal findings under sales tax law.

Boric acid is classified as an acid under Entry 2 of the Kerala General Sales Tax Act's First Schedule, not as a pesticide, fungicide, insecticide or plant protection chemical under Entry 96, because it is an acid by nature and is not such a chemical by itself merely because it may be mixed with other substances. Where rejection of books of account rests partly on alleged non-accounting of sale bills, a specific finding on that contention is required; absent such a finding, the accounting issue warrants fresh examination. The classification point was decided against the assessee, while the books-rejection issue was remanded for reconsideration.

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Issues: (i) Whether boric acid fell under Entry 96 of the First Schedule to the Kerala General Sales Tax Act, 1963, or under Entry 2 of that Schedule. (ii) Whether the rejection of the books of account required reconsideration for want of a finding on the alleged non-accounting of sale bills.

Issue (i): Whether boric acid fell under Entry 96 of the First Schedule to the Kerala General Sales Tax Act, 1963, or under Entry 2 of that Schedule.

Analysis: Entry 96 covered pesticides, fungicides, insecticides and plant protection chemicals, while Entry 2 covered all acids. Boric acid was admitted to be an acid. The material before the Court showed that boric acid was not a pesticide, insecticide or fungicide by itself, but was only mixed with such substances.

Conclusion: Boric acid fell under Entry 2 and not under Entry 96, and this issue was decided against the assessee.

Issue (ii): Whether the rejection of the books of account required reconsideration for want of a finding on the alleged non-accounting of sale bills.

Analysis: The books were rejected partly on the basis that sale bills aggregating to Rs. 31,229.45 had not been accounted for. The contention was that these bills had been posted in the books and supporting materials were produced, but no finding was recorded on that specific ground. The omission required fresh examination.

Conclusion: The matter relating to rejection of the books of account was remanded to the Appellate Tribunal for a fresh finding, and this issue was decided in favour of the assessee.

Final Conclusion: The revision was unsuccessful on the classification issue, but the accounting issue was sent back for fresh consideration, so the dispute was only partly resolved in favour of the assessee.

Ratio Decidendi: A goods classification entry must be applied according to the inherent character and ordinary description of the commodity, and where a material factual contention affecting rejection of accounts has not been found upon, the matter must be reconsidered on that point.

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