Commercial meaning of fabric entries governs sales tax exemption, and unconditional exemption cannot depend on prior excise duty payment.

Rayon tyre cord fabric was treated as a textile fabric for sales tax purposes because commodity entries in fiscal statutes are construed according to trade and commercial understanding, and the material showed that the product fell within the broad expression "all varieties of fabrics" in the relevant tariff entry. The sales tax exemption for rayon fabrics was also not conditional on prior payment of additional excise duty, as the statute then in force imposed no such requirement; the later withdrawal of the unconditional exemption operated only prospectively. The turnover of rayon tyre cord fabric for the relevant assessment years therefore remained exempt and the assessments could not stand.

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Issues: (i) Whether rayon tyre cord fabric is covered by the expression "rayon or artificial silk fabrics" and therefore by Item 18 of the Schedule to the Rajasthan Sales Tax Act, 1954 read with Item 22 of the First Schedule to the Central Excises and Salt Act, 1944; (ii) whether exemption from sales tax was conditional on prior payment of additional excise duty under the Additional Duties of Excise (Goods of Special Importance) Act, 1957.

Issue (i): Whether rayon tyre cord fabric is covered by the expression "rayon or artificial silk fabrics" and therefore by Item 18 of the Schedule to the Rajasthan Sales Tax Act, 1954 read with Item 22 of the First Schedule to the Central Excises and Salt Act, 1944.

Analysis: The expression describing taxable goods in a sales tax enactment must be construed in the sense in which the goods are understood in trade, by dealers and consumers. The material on record, including technical dictionaries, standard publications, trade classifications and governmental tariff descriptions, showed that tyre cord fabric is regarded as a textile fabric notwithstanding the dominant role of the cord and the light weft. The product manufactured by the appellant was a woven fabric in which the insertion of weft was an integral stage of manufacture, and Item 22 uses the wide expression "all varieties of fabrics".

Conclusion: The appellant's rayon tyre cord fabric is covered by the relevant entry as rayon fabric.

Issue (ii): Whether exemption from sales tax was conditional on prior payment of additional excise duty under the Additional Duties of Excise (Goods of Special Importance) Act, 1957.

Analysis: The Rajasthan Sales Tax Act, 1954 as it stood for the relevant assessment years granted exemption to rayon fabrics without imposing any condition that additional excise duty must first be paid. The later withdrawal of the unconditional exemption by notification dated 5 March 1973 and the deletion of Item 18 operated only prospectively. For the assessment years in question, the turnover remained exempt and the absence of payment of additional excise duty did not affect that exemption.

Conclusion: The exemption was not dependent on payment of additional excise duty and the assessee was entitled to exemption.

Final Conclusion: The sales tax assessments on the turnover of rayon tyre cord fabric for the relevant years could not be sustained and were set aside.

Ratio Decidendi: In construing a sales tax exemption entry, the commodity must be identified by its trade and commercial understanding, and where the entry uses broad language such as "all varieties of fabrics", a woven industrial fabric may fall within it even if it is primarily used as a component in a later manufacturing process; an exemption that is unconditional under the statute cannot be made dependent on payment of another duty unless the statute or valid notification so provides.

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