Court rules "damping hose cloth" as textiles, exempt from tax. Broad interpretation includes fabrics for industrial use.

The court allowed the appeal, ruling in favor of the assessee. The turnover related to sales of "damping hose cloth" was considered textiles and exempt from tax under the Tamil Nadu General Sales Tax Act, 1959. The court emphasized a broad interpretation of textiles, including fabrics used for industrial purposes, not limited to wearing apparel. The Board of Revenue's decision was overturned, and the assessee was granted costs and counsel fees.

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Issues:
Exemption claim under item 4 of the Third Schedule to the Tamil Nadu General Sales Tax Act, 1959.
Interpretation of the term "textiles" in relation to the turnover of "damping hose cloth."

Analysis:
The case involved an appeal against the Board of Revenue's order regarding the exemption claim for a turnover related to sales of "damping hose cloth" under the Tamil Nadu General Sales Tax Act, 1959. The assessee contended that the cloth should be considered textiles and exempt from tax. The Appellate Assistant Commissioner initially allowed the claim, but the Board of Revenue, upon suo motu revision, deemed the order incorrect and modified it. The Board argued that the cloth, used for damping rollers in printing machines, did not qualify as textiles based on its form and common understanding. The Board's decision was based on the fact that tax had been collected on the turnover previously, treating it as taxable at multiple points. The court noted the entry in the Act regarding textiles and referred to previous cases for interpretation.

The court referenced the Deputy Commissioner of Commercial Taxes case, emphasizing that weaving was a crucial aspect of defining textiles. It was highlighted that the process of weaving, even without traditional warp and woof patterns, could still qualify a product as textiles if it created a fabric or tape pattern. Another case involving waterproof cloth clarified that textiles should be interpreted in their ordinary or popular sense, not just technically. The Supreme Court's decision on dryer felts further supported a broad interpretation of textiles, stating that textiles could include fabrics used for industrial purposes, not limited to wearing apparel. The court examined the "damping hose cloth" in question, finding it similar to cloth used for banians and thus falling within the definition of textiles.

In conclusion, the court allowed the appeal, stating that the Appellate Assistant Commissioner's decision to exempt the turnover was correct. The Board's order was deemed unsustainable, and the assessee was granted costs and counsel fees. The judgment emphasized a broad interpretation of textiles, considering fabrics used for various purposes beyond just clothing.

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