Popular meaning test for textiles: industrial dryer felts were held outside the exemption and remained taxable.

In construing the sales tax exemption for "textiles" under Schedule B, the court applied the popular or commercial meaning test rather than a technical or scientific definition. It held that goods specially manufactured for industrial use do not fall within the entry merely because they are woven or contain textile material. The use and market perception of the article were relevant to its character. On that basis, cotton and woollen dryer felts, made for paper mills and not ordinarily traded as textiles, were held not to be textiles within item 30 and therefore not exempt from sales tax.

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Issues: Whether cotton and woollen dryer felts are covered by item 30 of Schedule B of the Punjab General Sales Tax Act, 1948 as "textiles" and are therefore exempt from sales tax.

Analysis: The exemption in section 6(1) applies only to goods specified in Schedule B, and item 30 exempts all varieties of cotton, woollen or silken textiles except the expressly excluded articles. The decisive question was the meaning of "textiles" in the sales tax setting. The majority held that for fiscal statutes the expression must be understood in its common parlance or commercial sense, not in its technical, scientific, or dictionary sense. Goods specially manufactured for industrial use, and not ordinarily understood by traders or consumers as textiles, do not become exempt merely because they are woven or contain textile material. The use to which the article is put was also treated as relevant to its character. On that approach, dryer felts, being specially made for paper mills and not commonly bought or sold as textiles in the market, were held not to answer the description of textiles in item 30.

Conclusion: Cotton and woollen dryer felts are not "textiles" within item 30 of Schedule B and are not exempt from sales tax.

Final Conclusion: The reference was answered in the negative, and the exemption claim failed.

Ratio Decidendi: In construing a sales tax exemption entry, the relevant test is the popular or commercial meaning of the goods as ordinarily understood in the market, and an article specially manufactured for industrial use is not covered merely because it is woven or composed of textile material.

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