Common parlance test excludes electrical insulated press board from paper entry, sustaining residuary taxation.

Electrical insulated press board manufactured from paper pulp was held not to be "paper of all kinds" under Serial No. 69 of the Third Schedule to the Karnataka Value Added Tax Act, 2003. The court applied common parlance and trade parlance principles, considering the commodity's character, function, use and commercial identity, and found that the product is understood as an electrical insulation material used in transformers rather than as paper for writing, printing, packing or similar purposes. Its specialised manufacture did not bring it within the inclusive wording of the entry, so the commodity was taxable under the residuary entry as other goods.

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Issues: Whether electrical insulated press board commonly known as high density board falls within Serial No. 69 of the Third Schedule to the Karnataka Value Added Tax Act, 2003 as paper of all kinds, or is taxable under the residuary entry as other goods.

Analysis: Serial No. 69 of the Third Schedule covers paper of all kinds and expressly includes certain specified varieties, while excluding photographic paper. The word "paper" is not defined in the Act, so it must be understood in common parlance and trade parlance, with due regard to legislative history and the context of the entry. The authorities and prior decisions relied on show that paperboard may in some settings be treated as paper, but the decisive factors remain the basic character, function, use, and commercial understanding of the commodity. The product in question is manufactured from pulp but undergoes a specialised process and emerges as electrical insulated press board used in transformers for insulation purposes. It is not understood in the market as paper for writing, printing, packing, drawing, decorating, or covering walls, and its commercial identity is that of an electrical insulation product. The inclusive wording in the entry does not extend to a commodity that, in its ordinary and trade sense, is not paper.

Conclusion: The commodity does not fall within Serial No. 69 of the Third Schedule to the Karnataka Value Added Tax Act, 2003 and is liable to be assessed under the residuary entry as other goods. The issue is answered in favour of the Revenue and against the assessee.

Final Conclusion: The revision petitions fail because the disputed product is not classifiable as paper under the third schedule and the concurrent assessment under the residuary rate is sustained.

Ratio Decidendi: In taxing entries, a commodity must be classified according to its common and trade parlance identity, and a specialised product manufactured from paper pulp will not be treated as "paper of all kinds" unless it is so understood in ordinary commercial usage and not merely because its raw material is paper pulp.

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