COMMISSIONER OF COMMERCIAL TAX, U.P. versus M/S. A.R. THERMOSETS (PVT.) LTD.

Citation: [2016] 4 S.C.R. 724 · Decided: 06-09-2016 · Supreme Court of India · Bench: DIPAK MISRA · Disposal: Dismissed
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Judgment (excerpt)

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[2016] 4 S.C.R. 724 
COMMISSIONER OF COMMERCIAL TAX, U.P. 
v. 
MIS. A.R. THERMOSETS (PVT.) LTD. 
(Civil Appeal No. 2650 of2016) 
SEPTEMBER 06, 2016 
[DIPAK MISRA AND PRAFULLA C. PANT, JJ.) 
VAT Act, 2008: 
Schedule II; Part A Serial no.22 - Bitumen emulsion - Whether 
··bitumen emulsion" is covered within Entry 22 of Schedule II which 
only refers to "bitumen" - Held: Bitumen emulsion comes into 
existence when bitumen is treated with emulsifiers and other 
chemicals to attain a liquid form - Bitumen consi~ts of four forms 
of variants, namely, solid bitumen, polymer bitumen, crumbier rubber 
modified bitumen and bitumen emulsion - Entry 22 does not exclude 
or specifY that it would not include bitumen of all types and varieties 
- Entry in question uses the word •'bitumen" without any further 
stipulation or qualification - Therefore, it would include any product 
which shares the composition identity, and in common and 
commercial parlance is treated as bitumen and can be used as 
bitumen - When applying the three tests, namely, identity, common 
parlance and end use to the goods and the Entry in question, bitumen 
emulsion would be covered by the Entry bitumen - U.P. Trade Tax 
Act, 1948 - s.11. 
Classification of goods - Matching of the goods with the Entry 
or Entries in the Schedules is tested on the basis of identity of the 
goods in question with the Entry or the contesting entries and by 
applying the common parlance test, i.e., whether the goods as 
understood in commercial or business parlance are identical or 
similar to the description of the Entry. 
Dismissing the appeal, the Court 
HELD: 1.1 Bitumen emulsion, as per Indian standards ICS 
293.08.0.20 published by the Bureau of Indian Standards is a 
destruction of very fine particles in an aqueous medium. 
According to report dated 11.4.2008 of Harcourt Butler 
Technological Institute, Kanpur, when a state of liquefaction is 
724 
COMMISSIONER OF COMMERCIAL TAX, U.P. v. MIS. A.R. 
THERMOSETS (PVT.) LTD. 
achieved and the same is constant for a longer period, it can be 
used under diverse moisturic conditions and has a very wide range 
of applications such as surface dressing of low volume roads, 
curing purposes base for high volume roads, surface dressing, 
tack coat, premix carpets, soil stabilization, etc. 
[Paras 13, 17] 
[732-C-D; 733-D-E] 
1.2 A reading of the definitions and the scientific text of 
bitumen and bitumen emulsion clearly reveal that bitumen in its 
original form is solid but melts when heated, for it is used in 
molten stage. Bitumen emulsion comes into existence when 
bitumen is treated with emulsifiers and other chemicals to attain 
a liquid form. It has a huge advantage and add benefit because it 
is not to be heated and detained in its liquid form and has better 
stability and thus, saves time and cost components. That apart, 
it ensures its use at the stage of application. It is comparatively 
less hazardous. Bitumen consists of four forms of variants, namely, 
solid bitumen, polymer bitumen, crumbier rubber modified 
bitumen and .bitumen emulsion. Entry 22 does not exclude or 
specify that it would not include bitumen of all types and varieties. 
[Para 18] [734-A-D] 
2. Matching of the good with the Entry or Entries in the 
Schedules is tested on the basis of identity of the goods in 
question with the Entry or the contesting entries and by applying 
the common parlance test, i.e., whether the goods as understood 
in commercial or business parlance are identical or similar to the 
description of the Entry. Where such similarity in popular sense 
of meaning exists, the generic entity would be construed as 
including the goods .in question. Sometimes on certain 
circumstances the end use test, i.e., use of the good and its 
comparison with the Entry is applied. The Entry in question uses 
the word "bitumen" without any further stipulation or qualification. 
Therefore, it would include any product which shares the 
composition identity, and in common and commercial parlance is 
treated as bitumen and can be used as bitumen. When applying 
the three tests, namely, identity, common parlance and end use 
to the goods and the Entry in question, bitumen emulsion would 
be covered by the Entry bitumen. Bitumen emulsion matches 
the Entry as it is only one of the varieties of bitumen. Bitumen 
emulsion is processed bitumen, but the process has not changed 
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