Interpretation of "cloth" under sales tax law excludes stitched pillow covers from the mill-cloth exemption.

"Cloth" under entry 6 of Schedule I to the Madhya Pradesh General Sales Tax Act, 1958 was construed in its ordinary and popular sense as unstitched fabric in the form in which it is manufactured. Once mill-made cloth was cut and stitched into pillow covers, it acquired a different commercial identity and was no longer cloth simpliciter. References to cotton fabrics in the Central Sales Tax Act and Central Excises and Salt Act did not extend the exemption. Stitched pillow covers therefore did not fall within the mill-cloth exemption and were not exempt from sales tax.

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Issues: Whether stitched pillow covers made from mill-manufactured cloth fell within the exemption for "all varieties of cloth manufactured in mills" under entry 6 of Schedule I to the Madhya Pradesh General Sales Tax Act, 1958.

Analysis: The expression "cloth" was not defined in the Act, so it was construed in its ordinary and popular sense. On that approach, cloth means unstitched fabric in the form in which it is manufactured, and once it is cut into sizes and stitched into pillow covers it acquires a different commercial identity. The inclusive reference to cotton fabrics in section 14(ii-a) of the Central Sales Tax Act and item 19 of the First Schedule to the Central Excises and Salt Act, 1944 did not assist the petitioner. The authorities and the cited decisions on pillow covers and similar transformed articles supported the view that such stitching is not merely incidental or ancillary to manufacture and that the resulting article is no longer cloth simpliciter.

Conclusion: Stitched pillow covers do not fall within entry 6 of Schedule I to the Madhya Pradesh General Sales Tax Act, 1958 and are not exempt from sales tax.

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