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of <h1>Court rules filter cloth as textile under tax laws, quashes reassessment order</h1> The court ruled in favor of the petitioners, quashing the reassessment order under the Karnataka Sales Tax Act for the year 1988-89 and Central sales tax ... - Issues:Challenge to reassessment order under the Karnataka Sales Tax Act for the year 1988-89 and Central sales tax assessment regarding sale of filter cloth.Analysis:The dispute in the case revolved around the classification of filter cloth for tax purposes. The assessing authority had levied tax on the basis that filter cloth was not considered textile in common parlance but man-made fabric. The key point of contention was whether filter cloth qualified as a textile under the relevant tax laws.The court referred to Entry 8A of the Fifth Schedule, which provided exemption for all varieties of textiles, including cotton, woollen, or artificial silk. The interpretation of the term 'textile' was crucial, and the court cited judgments from previous cases to establish that fabrics with warp and weft could be classified as textiles. Even non-woven fabrics were considered textile fabrics if they met certain criteria, as defined in dictionaries and legal precedents.The court emphasized that in a taxing statute, words should be understood in common parlance rather than their scientific or technical sense. It was noted that even knitted fabric could be classified as a textile, broadening the scope of what could be considered under the term.The judgment highlighted that the term 'namely' in Entry 8A restricted the scope of textiles to those made of cotton, woollen, or artificial silk. The court clarified that fabrics like jute would not fall under this category. The assessing authority's classification of filter cloth as non-woven was questioned, as the exact nature of the commodity had not been thoroughly examined.Ultimately, the court ruled in favor of the petitioners, quashing the reassessment order based on the circular issued by the department. The court allowed for reassessment if it was determined that filter cloth did not qualify as a textile, emphasizing that the assessing authority needed to consider factors such as the manufacturing process and composition of the filter cloth to make an informed decision.In conclusion, the judgment provided clarity on the classification of filter cloth as a textile for tax purposes, emphasizing the importance of common parlance interpretation and adherence to legal definitions and precedents in determining tax liabilities.
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