Common parlance test drives classification of waterproofing products under the residuary tax schedule, not as industrial inputs.

Goods marketed and used as finished waterproofing, sealing and bonding materials in civil construction were treated as falling outside the specific industrial-input entry in Schedule IV of the Rajasthan Value Added Tax Act, 2003. The court applied the common parlance test and found that the products were not inputs consumed in manufacture of a commercially different article; the test reports only showed chemical nature and did not establish classification as chemicals for the specific entry. As the goods did not answer the specific description, the residuary Schedule V applied and the assessee's claim for Schedule IV treatment was rejected.

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Issues: Whether Dr. Fixit Series products used in waterproofing, binding and bonding work in civil construction were classifiable as industrial inputs under entry 69 of Schedule-IV of the Rajasthan Value Added Tax Act, 2003 or fell under the residuary Schedule-V, and whether the test reports required a different classification.

Analysis: Entry 69 of Schedule-IV covered only industrial inputs specified in Part-B, while the residuary Schedule-V applied to goods not covered in any other Schedule. On the facts and product literature, the goods were found to be finished products meant for waterproofing, sealing, bonding and similar construction uses, and not industrial inputs consumed in manufacture of another commercially different product. The test reports from the National Test House only indicated that the goods were chemical in nature and did not establish that they were chemicals as such for the purpose of entry 69. Applying the common parlance test and the rule that recourse to the residuary entry is taken when a product does not answer a specific entry, the products were held not to fall within Schedule-IV.

Conclusion: The classification under Schedule-V was upheld and the assessee's claim for assessment under Schedule-IV was rejected.

Final Conclusion: The impugned orders were sustained, the tax classification dispute was decided against the assessee, and the petitions were dismissed.

Ratio Decidendi: Where goods are marketed and used as finished construction materials for waterproofing or bonding, they are not industrial inputs for the purpose of a specific schedule entry and may be classified under the residuary entry if they do not answer the specific description.

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