Popular trade understanding of textile held to cover cotton-based coated fabric used as cloth, sustaining tax exemption.

Leather cloth, being a cotton-based coated fabric, was treated as textile under the exemption notification because classification turned on its ordinary and popular meaning in trade and among persons familiar with the commodity. The record showed that it was commonly used as cloth for coats, jackets and table covers, and the notification covered textile varieties including cotton fabrics and waterproof cloth. On that basis, the product fell within the textile description and was exempt from tax. The Tribunal's view was sustained and the revisions were dismissed.

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Issues: Whether leather cloth, being a cotton-coated fabric, is textile covered by the exemption notification issued under section 4 of the U.P. Sales Tax Act, 1948.

Analysis: The governing approach is the ordinary and popular sense in which a commodity is understood in trade and by persons conversant with the subject. The materials on record showed that the product was a cotton-based coated fabric, that it was commonly used as cloth for coats, jackets and table covers, and that the relevant notification included textile varieties, including cotton fabrics and waterproof cloth. On that basis, the product fell within the description of textile.

Conclusion: Leather cloth was rightly treated as textile and exempt from tax. The Tribunal's view was sustained, and the revisions were dismissed.

Ratio Decidendi: Classification of a product as textile depends on its popular and commercial understanding, and a cotton-based coated fabric commonly regarded and used as cloth may fall within an exemption for textiles.

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