Commodity classification for tax depends on proof of true identity, with remand allowed for opportunity to establish lower-rate status.

Spray oil was not treated as a pesticide or fungicide merely because it was used for spraying; its tax classification depended on proof that it was a manufactured insecticidal product sold under the relevant licence in sealed containers. In the absence of satisfactory evidence establishing the identity of the commodity, the assessing authority was justified in proceeding on the basis that it was a petroleum product and applying the higher rate. The revision was allowed, the appellate orders were set aside, and the matter was remanded to the assessing officer to give the assessee an opportunity to prove the true nature of the product, failing which the higher-rate assessment could be restored.

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Issues: Whether spray oil was liable to be classified as a pesticide or fungicide, or as a petroleum product, for the purpose of levy of tax, and whether the assessee had established the identity of the commodity so as to claim the lower rate.

Analysis: The claim that the product was a pesticide or fungicide was rejected because mere use of the commodity for spraying did not make it a pesticide or fungicide. The decisive factor was whether the item was shown to be a manufactured insecticidal product sold in sealed containers under the relevant licence. In the absence of satisfactory evidence establishing the identity of the goods, the assessing authority was justified in proceeding on the basis that spray oil was a petroleum product and in applying the higher rate of tax. At the same time, the assessee was entitled to an opportunity to prove the true nature of the commodity.

Conclusion: The revision was allowed, the orders of the Tribunal and the first appellate authority were set aside, and the matter was remanded to the assessing officer to permit the assessee to prove the nature of the product, failing which the assessment at the higher rate could be restored.

Ratio Decidendi: Where the assessee fails to establish the true identity of a commodity claimed to be tax-exempt or taxable at a lower rate, the assessing authority may adopt the classification supported by the available evidence, subject to giving the assessee an opportunity to prove otherwise.

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