Predominance test for cotton fabrics: rubberised transmission beltings retained their essential character and qualified for tax exemption.

Transmission beltings made of cotton and rubber were treated as "cotton fabrics" for Entry 5 of the Fourth Schedule to the A.P. General Sales Tax Act because the State Schedule was read with Item 19 of the First Schedule to the Additional Duties of Excise (Goods of Special Importance) Act, 1957. Applying the predominance test, the goods were found to contain about 66.7% cotton and to retain their essential character as cotton fabric despite rubberising. A cited Gujarat decision was distinguished because it involved materially different statutory language. The goods were therefore exempt from tax.

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Issues: Whether transmission beltings manufactured with cotton and rubber are cotton fabrics within Entry 5 of the Fourth Schedule to the A.P. General Sales Tax Act and are therefore exempt from tax.

Analysis: The expression "cotton fabrics" in the State Schedule had to be understood with reference to Item 19 of the First Schedule to the Additional Duties of Excise (Goods of Special Importance) Act, 1957. The materials showed that the goods contained about 66.7 per cent cotton and 33.3 per cent rubber, and were subjected to rubberising. On that basis, and applying the predominance test, the goods retained their essential character as cotton fabric. The cited Gujarat decision was distinguishable because it turned on materially different statutory language under the Central excise entry then in force.

Conclusion: The transmission beltings are cotton fabrics within the meaning of Entry 5 of the Fourth Schedule and are exempt from tax.

Ratio Decidendi: Where a sales tax exemption entry adopts the meaning of "cotton fabrics" from the central excise entry, goods that are substantially cotton and merely rubberised retain their character as cotton fabrics if cotton remains the predominant constituent and the statutory definition so permits.

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