Powerloom textile exemption limited to goods actually manufactured on powerlooms; finished fused collars and shoulder straps did not qualify.

An exemption for textiles manufactured on powerlooms applied only to goods that answered that description at the stage for which relief was claimed. Fused collars and shoulder straps made from cotton cloth and buckram were produced by cutting, fusing and finishing, not by manufacture on powerlooms. Although the raw material was cotton fabric, the finished articles were distinct products and did not qualify as cotton fabrics or textiles within the notification. The Allahabad HC therefore held that the exemption was unavailable and the goods remained liable to sales tax.

---

---

Issues: Whether fused collars and shoulder straps manufactured from cotton cloth and buckram were exempt from sales tax as cotton fabrics/textiles under the exemption notification applicable to textiles manufactured on powerlooms.

Analysis: The notification exempted only textiles of specified varieties manufactured on powerlooms, including cotton fabrics of all varieties. Although the raw material used was cotton fabric, the finished fused collars and shoulder straps were produced by cutting, fusing and finishing, and not by manufacture on powerlooms. The material remained cotton fabric in its raw state, but the exemption depended on the character and mode of manufacture of the finished commodity for which exemption was claimed. Since the fused collars themselves were not powerloom-manufactured textiles, the exemption could not be claimed.

Conclusion: The fused collars and shoulder straps were not exempt under the notification and were liable to tax.

Ratio Decidendi: An exemption granted to textiles manufactured on powerlooms applies only to goods that answer that description at the stage for which exemption is claimed, and does not extend to a distinct finished product produced by cutting, fusing and finishing even if its raw material is cotton fabric.

---