Common parlance test and incomplete record: Tribunal upheld in refusing a belated Exim Scrips ground and sustaining purchase tax.

A belated ground requiring factual investigation cannot be entertained in appeal where the necessary material is not on record and no request is made to adduce further evidence; the Tribunal's refusal to consider the Exim Scrips issue was therefore upheld. On classification, plastic powder was held not to be a "chemical" under Notification entry 39 of the Bombay Sales Tax Act on the common parlance test, but a raw material. As the assessee was not entitled to issue T/TT declarations, breach of the declaration conditions attracted purchase tax under section 41(2), and the levy was sustained.

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Issues: (i) Whether the Tribunal was justified in declining to entertain an additional ground relating to levy of tax on Exim Scrips when the ground was not raised in the second appeal memo and the material necessary to decide it was not on record; (ii) Whether plastic powder fell within the expression "chemical" in Notification entry 39 under section 41 of the Bombay Sales Tax Act, 1959 so as to entitle the assessee to issue T/TT declarations and avoid purchase tax under section 41(2).

Issue (i): Whether the Tribunal was justified in declining to entertain an additional ground relating to levy of tax on Exim Scrips when the ground was not raised in the second appeal memo and the material necessary to decide it was not on record.

Analysis: The additional ground could not be treated as a pure question of law because its adjudication depended on the nature of the transactions and the supporting evidence. The record before the Tribunal did not conclusively show that the Exim Scrips had been surrendered rather than sold, and some material indicated sales to third parties. In the absence of a proper factual foundation and without any request to lead additional evidence, the Tribunal was justified in refusing to entertain the ground.

Conclusion: The Tribunal's refusal to adjudicate the Exim Scrips ground was upheld and is against the assessee.

Issue (ii): Whether plastic powder fell within the expression "chemical" in Notification entry 39 under section 41 of the Bombay Sales Tax Act, 1959 so as to entitle the assessee to issue T/TT declarations and avoid purchase tax under section 41(2).

Analysis: Applying the common parlance test, plastic powder was treated as a raw material and not as a chemical or chemical intermediary within the meaning of the notification. The Tribunal relied on its earlier view that plastic powder is not a chemical, and once the assessee was not entitled to issue T/TT declarations, contravention of the declaration conditions attracted purchase tax under section 41(2).

Conclusion: Plastic powder was held not to be a chemical, and the purchase tax levy under section 41(2) was upheld against the assessee.

Final Conclusion: Both referred questions were answered in favour of the revenue, leaving the purchase tax liability and the refusal to admit the additional ground undisturbed.

Ratio Decidendi: A belated ground requiring factual investigation and additional evidence cannot be entertained in appeal without a proper factual basis, and classification of goods under a taxing notification must ordinarily be determined according to common parlance rather than scientific characterisation.

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