Common parlance classification of bagasse under sugarcane exemption turns on market identity and facts, not a pure legal question.

Bagasse was analysed under the common parlance and commercial understanding test for sales tax classification, and on the facts stated it was treated as falling within "sugarcane" in Schedule Entry A-44 because there was no evidence that the market regarded it as a separate commodity. On that basis, it was treated as tax free. The Court also treated the Tribunal's referred question as a mixed question of law and fact, since the issue depended on the factual record concerning bagasse's commercial identity rather than a pure abstract legal question. The stated ratio is that a residue or by-product may be treated as part of the parent commodity where no distinct market identity is shown.

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Issues: (i) Whether bagasse, on the facts found, is covered by the expression "sugarcane" in Schedule Entry A-44 to section 5 of the Bombay Sales Tax Act, 1959 and is therefore tax free. (ii) Whether the question referred by the Tribunal was in substance a mixed question of law and fact rather than a pure question of law warranting reference.

Issue (i): Whether bagasse, on the facts found, is covered by the expression "sugarcane" in Schedule Entry A-44 to section 5 of the Bombay Sales Tax Act, 1959 and is therefore tax free.

Analysis: The commodity had to be understood in its popular and commercial sense. The Court accepted the view that bagasse is the residue left after crushing sugarcane and, on the record before it, there was no material to show that it had acquired an independent commercial identity distinct from sugarcane. In the absence of evidence that the market treated bagasse as a separate commodity, the reasoning adopted in the earlier decision was found applicable to the BST Act context.

Conclusion: Bagasse was held to fall within sugarcane for the purpose of Schedule Entry A-44 and was treated as tax free.

Issue (ii): Whether the question referred by the Tribunal was in substance a mixed question of law and fact rather than a pure question of law warranting reference.

Analysis: The Court held that the controversy turned on the nature of the commodity and the factual material regarding its commercial understanding. Since the record did not disclose any established market identity of bagasse separate from sugarcane, the issue did not present a pure question of law. The proposed reference therefore lacked the character necessary for an answer as a standalone legal issue divorced from facts.

Conclusion: The referred question was held to be a mixed question of law and fact.

Final Conclusion: The references were answered in favour of the dealer, holding that bagasse was not exigible to tax as a separate commodity on the facts found.

Ratio Decidendi: A commodity must be classified for sales tax purposes according to its common parlance and commercial understanding, and where a residue or by-product has not been shown to acquire a distinct market identity, it may be treated as part of the parent commodity for exemption purposes.

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