Exemption for textile goods covers cotton coated fabrics; import under form XXXI does not determine taxability.

Cotton coated fabrics fell within the exemption for textiles, including cotton fabrics of all varieties, under the notification issued under section 4(1) of the U.P. Sales Tax Act, 1948, so they were not liable to sales tax. Earlier judicial interpretation and the statutory understanding of cotton fabrics supported that classification, and the finding that the goods contained less than 40 per cent cotton was not treated as decisive. Import of the goods against form XXXI did not affect taxability, because that form served only as an intimation of import into the State and did not determine whether the goods were taxable.

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Issues: Whether cotton coated fabrics were exempt from sales tax under the notification issued under section 4(1) of the U.P. Sales Tax Act, 1948, and whether the use of form XXXI affected the taxability of the goods.

Analysis: The notification granting unconditional exemption covered textiles, including cotton fabrics of all varieties. Cotton coated fabrics were treated as falling within that description, supported by earlier judicial interpretation and by the statutory understanding of cotton fabrics in section 14 of the Central Sales Tax Act, 1956. The finding that the goods contained less than 40 per cent cotton was not accepted as decisive, and the fact that the goods were imported against form XXXI was held to have no bearing on whether the goods were taxable, because that form only intimates import into the State and does not determine taxability.

Conclusion: Cotton coated fabrics were held to be exempt from levy of sales tax, and form XXXI did not make the goods taxable.

Final Conclusion: The revision failed because the goods fell within the exempt textile entry and the import declaration form had no effect on their tax status.

Ratio Decidendi: Goods falling within an exemption entry for textiles, including cotton fabrics of all varieties, cannot be taxed merely because they were imported under a declaration form that serves only an intimation purpose and does not control taxability.

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