Superimposed textile alteration defeats exemption for art silk saris and excludes them from concessional classification.

Art silk saris to which zalars were attached after manufacture were treated as embroidered or decorated saris, not as the original exempt fabric. The Gujarat HC noted that entry 41 of Schedule A to the Bombay Sales Tax Act, 1959 covered rayon or artificial silk fabrics as such, but a later independent process that altered the finished article removed it from the exempt class under section 5(1). For the same reason, the goods did not satisfy the definition of art silk fabrics under section 14(7) of the Central Sales Tax Act, 1956. The reference was answered against the assessee and the turnover remained taxable.

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Issues: (i) Whether art silk saris to which zalars were attached after manufacture were covered by entry 41 of Schedule A to the Bombay Sales Tax Act, 1959 and exempt from tax under section 5(1) of that Act; (ii) Whether such saris fell within the definition of art silk fabrics under section 14(7) of the Central Sales Tax Act, 1956.

Issue (i): Whether art silk saris to which zalars were attached after manufacture were covered by entry 41 of Schedule A to the Bombay Sales Tax Act, 1959 and exempt from tax under section 5(1) of that Act.

Analysis: Entry 41 was a general entry for rayon or artificial silk fabrics as defined in item 22 of the First Schedule to the Central Excises and Salt Act, 1944. The saris in question were first manufactured as art silk saris and only thereafter were zalars stitched on by an independent process. That additional process converted them into embroidered or decorated saris, which the Act treated differently under the entries in Schedule E. The exemption under section 5(1) could not be read in isolation so as to override the scheme of classification where the article, by reason of a later superimposed process, ceased to remain within the exempt category.

Conclusion: The saris were not covered by entry 41 of Schedule A and were not exempt from tax under section 5(1) of the Bombay Sales Tax Act, 1959.

Issue (ii): Whether such saris fell within the definition of art silk fabrics under section 14(7) of the Central Sales Tax Act, 1956.

Analysis: Section 14(7) adopted the definition of rayon or artificial silk fabrics from item 22 of the First Schedule to the Central Excises and Salt Act, 1944. Once the finished art silk saris had been subjected to a further independent process of attaching zalars, the resulting goods became embroidered or decorated saris in common parlance and no longer answered the statutory definition of art silk fabrics.

Conclusion: The saris did not fall within section 14(7) of the Central Sales Tax Act, 1956.

Final Conclusion: The reference was answered against the assessee, and the disputed turnover remained taxable under the Act.

Ratio Decidendi: Where a finished textile article is later altered by an independent superimposed process that creates a distinct marketable commodity, the article is classified by its altered character and cannot claim exemption or a concessional classification reserved for the original fabric.

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