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Issues: (i) Whether bleaching powder was covered by the concessional entry for lime and dehydrated lime under the relevant notification. (ii) Whether bleaching powder was assessable as a chemical under entry 29 of the First Schedule to the Kerala General Sales Tax Act, 1963.
Issue (i): Whether bleaching powder was covered by the concessional entry for lime and dehydrated lime under the relevant notification.
Analysis: The product was held not to be lime or dehydrated lime. In the manufacturing process, lime lost its identity and a new product emerged with different characteristics and odour. The notification granted concession only to lime and dehydrated lime, and not to products manufactured out of lime.
Conclusion: The issue was decided against the assessee. Bleaching powder was not entitled to concessional taxation under the notification.
Issue (ii): Whether bleaching powder was assessable as a chemical under entry 29 of the First Schedule to the Kerala General Sales Tax Act, 1963.
Analysis: Bleaching powder was produced through a chemical process using lime, chlorine, water and other materials, and in common parlance it was understood as a chemical product. Entry 29 was treated as a residuary entry covering chemicals and chemical components not elsewhere classified in the Schedule.
Conclusion: The issue was decided in favour of the Revenue. Bleaching powder fell within the description of chemical under entry 29 and was taxable at 10 per cent.
Final Conclusion: The assessments were upheld and the tax revision cases stood dismissed.
Ratio Decidendi: Where a manufactured product loses the identity of its raw material and is understood in common parlance as a chemical product, it will be classified according to its commercial and chemical identity rather than the character of its ingredients.
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