TaxTMI 
TaxTMI 
1981 (8) TMI 210
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....llars of the shirts, etc. These collar cuttings are, therefore, sold to tailors for their use as inner-materials for the collars of shirts, etc., as stated above. The opponent-firm made an application under section 62 of the Gujarat Sales Tax Act, 1969, to the Deputy Commissioner for determination as to what would be the appropriate entry in the schedule under which these goods could be taxed. Two bills were produced with the application being bills Nos. 309 and 387 of 25th May, 1974, and 27th July, 1974, respectively. By bill No. 309 the materials known as "inter-lining collar cuttings" were sold while by bill No. 387 the materials known as "inter-lining double collar cuttings" were sold. The former materials, namely, inter-lining collar cuttings, are prepared out of ordinary cotton cloth of a particular type manufactured by certain textile mills for this purpose. The cloth is required to be cut into shapes of different sizes of collars. The latter materials, namely, inter-lining double collar cuttings, are prepared from two types of cotton cloth; one type of cotton cloth is the same from which inter-lining collar cuttings are prepared whereas the other type of cotton cloth is a c....
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....ng within the terms of entry 37. As regards the alternative contention of the assessee, it was sought to be repelled by the learned Government Agent that they were not ready-made garments or articles which can be used by the consumers, inasmuch as they are required to be inserted in collars of the garments, namely, shirts, etc., so as to give stiffness to the collars of those garments. The Tribunal, having regard to these rival contentions and the facts which have been found about how these articles are prepared and also on consideration of the different decisions, which were cited at the Bar, reached the conclusion that collar cuttings in question sold by the opponent-firm would be cotton fabrics as falling within entry 37 of Schedule I to the said Act. The State Government has, therefore, sought the question for our opinion. At the time of hearing of this reference, the learned Government Pleader urged the following three contentions: 1.. The articles in question would not fall within the terms of entry 51 of Schedule I to the Sales Tax Act of 1969 inasmuch as they cannot be said to be ready-made garments or articles. 2.. The Tribunal committed a clear error of law in ho....
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....articles known as inter-lining collar cuttings and inter-lining double collar cuttings, as held by the Tribunal, fall within entry 37 of Schedule I to the said Act. It is no doubt true that in an application made by the assessee-firm the opponent herein under section 62 of the Gujarat Sales Tax Act, 1969, which provides for the determination of the disputed questions, the contention of the assessee-firm was that the articles in question would fall within entry 51 of the Schedule I. This contention did not find favour with the Deputy Commissioner who held that since there was no specific provision or a general provision under which these articles could be subjected to tax, they must necessarily therefore be taxed under the residuary entry 13 of Schedule III to the said Act. In appeal, however, at the instance of the assessee before the Tribunal, a contention was urged on behalf of the assessee-firm that the articles would be covered by entry 37 and in the alternative by entry 51. The Tribunal agreed with the assessee-firm that the articles would fall within entry 37 of the Act. Having accepted this contention that the articles would fall within the general provision pertaining to co....
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....oidered or otherwise decorated sold at a price not exceeding ten rupees per article or suit." It should be recalled that Schedule I prescribes goods, the sale or purchase of which is free from all taxes as provided in section 5 of the said Act. We have, therefore, to consider as to what is the definition of the term "cotton fabrics" in item 19 of the First Schedule to the Central Excises and Salt Act, 1944. The material part of item 19 of the First Schedule to the Central Excises and Salt Act, 1944, has been set out by the Tribunal in its order. However, in order to have proper perspective of the matter, we set out the entire item 19 from the First Schedule to the Central Excises and Salt Act, 1944: Item No. Description of goods Rate of duty (1) (2) &nbs....
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....is that inasmuch as there is cutting of the cloth to the required size and shape and also because there is a superimposition of cotton fabrics impregnated with the plastic material, the end articles so prepared would lose their characteristics of cotton fabrics and, therefore, the Tribunal was in error, even after this process had been carried out, to treat these articles as cotton fabrics. In support of this contention reliance was sought to be placed on the decision of a Division Bench of this Court consisting of Shelat, C.J., and Bhagwati, J., in Pravin Bros.' case [1964] 15 STC 478, where the Division Bench was concerned with the question whether after a dealer cuts out five yards pieces from takas of malmal and voile and has embroidered and superimposed on them for the purpose of selling those pieces as embroidered sarees, such articles can still be said to be cotton fabrics within the meaning of entry 15 of Schedule A to the Bombay Sales Tax Act, 1959. Entry 15 of Schedule A to the Bombay Sales Tax Act was also a referential piece of legislation where cotton fabrics as defined in item 12 (now item 19) of the First Schedule to the Central Excises and Salt Act, 1944, were exemp....
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.... kinds of sarees differently; those that are embroidered or otherwise decorated within the meaning of that entry and those that are not. Though, therefore, cotton sarees may, in ordinary parlance, be called cotton fabrics, if such sarees are sarees embroidered or decorated, provided such embroidery or decoration is super. imposed upon them after the process of their manufacture is over, they would be dealt with differently and the sales thereof are subjected to sales tax under section 10 and entry 3 of Schedule E to the Act..........." We have not been able to appreciate how this decision of the Division Bench of this Court in Pravin Bros.' case [1964] 15 STC 478 can be of any assistance to the cause of the revenue before us. As a matter of fact, the Division Bench in Pravin Bros.' case [1964] 15 STC 478 had emphasised that the fact that the dealer had cut the takas into five yards pieces of sarees would not make any difference. It was the superimposition on the sarees and having regard to a specific entry in that behalf taxing the articles known as embroidered or decorated sarees that the Division Bench reached the conclusion as it did in Pravin Bros.' case [1964] 15 STC 478....
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...., attempted to persuade us by relying on the another decision of a Division Bench of this Court consisting of T.U. Mehta (as he then was) and P.D. Desai, JJ., in Hind Engineering Co. v. Commissioner of Sales Tax [1973] 31 STC 115 where the Division Bench was concerned with the question as to whether articles of Hind rubber beltings and Cooper rubber beltings would be within the purview of entry 15 of Schedule A to the Bombay Sales Tax Act, 1959, which pertained to cotton fabrics again. We do not think that the decision in Hind Engineering Co.'s case [1973] 31 STC 115 would take the case of the revenue any further since the Division Bench, speaking through P.D. Desai, J., found that the process of manufacturing rubber beltings involved superimposition of rubber compound on both sides of canvas and, therefore, they cannot be said to have been manufactured either wholly or partly from cotton directly. The Division Bench reached this conclusion in the following terms: "........What is utilised in the manufacture of rubber beltings is canvas which itself is a distinct and complete product 'manufactured either wholly or partly from cotton and is a known commercial commodity. It cannot....