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TaxTMI 
TaxTMI 
TaxTMI 
2015 (10) TMI 210
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....rket as an industrial input in primary form. It is said that the PP granules are Homologous to HDPE granules. The input process is through various machines to produce a sheet. The sheet by another mechanical process is cut into tapes and tapes/yarn is produced. The tapes/yarns are subsequently by use of warp and weft (Tana-Bana) method is converted into HDPE/PP fabric. It is the stand of the appellant that HDPE fabric is exactly similar to PP fabric. The appellant in its return for the assessment year 2005-06 showed the sale of HDPE fabric as tax free falling within Entry 51 to Schedule B appended to the Haryana Value Added Tax, Act 2003 (for short 'the Act'). The assessing officer treated the sales of HDPE fabric as tax free. But a show cause notice was issued under Section 34 of the Act read with Section 9(2) of the Central Sales Tax, Act 1956 proposing to revise the assessment orders for the reason that the sale of HDPE/PP fabric should have been taxed. The revision was allowed and tax liability created. The Deputy Excise and Taxation Commissioner exercising the revisional powers relied upon the clarification dated 10.12.2009 (Annexure A-7) issued by Financial Commissio....
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....Excises and Salt Act, 1944 (Central Act 1 of 1944)". Item 22 of the First Schedule to the Central Excises and Salt Act, 1944 defines "Rayon or artificial silk fabrics' means all varieties of fabrics manufactured either wholly or partly from rayon or artificial silk and includes embroidery in the piece, in strips or in motifs and fabrics impregnated or coated with preparations of cellulose derivatives or of other artificial plastic materials." The Hon'ble Division Bench noticed that such item 22 does not precisely define either rayon or artificial silk. The Court examined that what is the sense in which rayon and artificial silk are understood by the Central Excise and Salt Act, 1944. The Court noticed that rayon is understood by Diwakar Gulati 2014.05.14 12:21 I attest to the accuracy and integrity of this document technologists and traders, as a fibre made from regenerated cellulose, cellulose being the substance in living plants out of which the skeletal structure of plant cell walls are formed. The expression 'artificial silk' denotes that it is the opposite of natural silk. This term was originally used to refer to rayon because rayon was the only kind of artif....
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....ions used but to their popular meaning, that is to say, the meaning attached to them by those dealing in them. On the other hand, Mr. Poonia relies upon a Division Bench judgment of this Court reported as (2008) 31 PHT 74 (P&H) titled as 'Lakshmi Polyfab Vs. Union Territory of Chandigarh and another' wherein while examining Entry 52 reading 'textile fabric including terry towels' of Schedule A appended to Punjab VAT Act, 2005. It has been held that sale of sale of High-Density Polyethylene fabric is not covered by entry 52. We have heard learned Counsel for the parties. A perusal of Schedule B would show that the exempted good in terms of Section 2(1) (p) of the Act are the agricultural implements, the food articles and other consumer goods. Schedule C is list of articles which are basically inputs for manufacturing of other products. We find that the judgment in Lakshmi Polyfab (supra) does not deal with the issue in question. The entry under consideration was 'textile fabric including terry towels'. The Court held that HDPE falls in the list of industrial inputs attracting VAT at the rate of 4% under Section 8 of the Act. It was also not disputed that g....
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....IR 1962 SC 660 and The State of West Bengal v Washi Ahmed, (1977) 2 SCC 246 that in a taxing statute words of every day use must be construed not in their scientific or technical sense but as understood in common parlance. The question which arose in Ramavatar's case (supra) was whether betel leaves are vegetables and this Court held that they are not included within that term. This Court quoted with approval the following passage from the judgment of the High Court of Madhya Pradesh in Madhya Pradesh Pan Merchants' Association, Santra Market, Nagpur v. State of Madhya Pradesh, 7 STC 99. In our opinion, the words "vegetables'' cannot be given the comprehensive meaning the term bears in natural history and has not been given that meaning in taxing statutes before. The term "vegetables' is to be understood as commonly understood denoting those classes of vegetable matter which are grown in kitchen gardens and are used for the table. and observed that the word 'vegetables' in taxing statutes is to be understood as in common parlance i.e. denoting class of vegetables which are grown in a kitchen garden or in a farm and are used for the table." This mea....
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....'s case (supra), the meaning attached to the entries should be those dealing in them and not the scientific or technical meaning. The word 'artificial silk' is not defined in the statute. Silk is a thread which is commonly made from fibre produced by silk worms. Therefore, the meaning of such expression is what the common meaning of such expressions is in the normal usage. As per Chambers Dictionary the word 'artificial' means made by man; synthetic; fictitious, made in imitation, whereas the word 'silk' also includes artificial silk to be made by forcing a viscous solution of modified cellulose through small holes. In the present case, the issue to be examined is that what is rayon, artificial silk or nylon. The fibre, an essential ingredient for manufacturing of cotton, wool or silken textile, is either natural or man-mad. The natural fibres include those of plant (cellulose based, animal protein based or mineral based). Cotton is a plant based natural fibre whereas wool and silk are animal based fibre. On the other hand, man-made fibres are manufactured by Diwakar Gulati 2014.05.14 12:21 I attest to the accuracy and integrity of this document alterat....
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....s invented for making fabric out of yarn that it would be most unwise to confine the weaving process to the warp and woof pattern. Whatever be the mode of weaving employed, woven fabric would be 'textiles'. What is necessary is no more than weaving of yarn and weaving would mean binding or putting together by some process so as to form a fabric. Moreover a textile need not be of any particular size or strength or weight. It may be in small pieces or in big rolls: it may be weak or strong, light or heavy, bleach or dyed, according to the requirement of the purchaser. The use to which it may be put is also immaterial and does not bear on its character as a textile. It may-be used for making wearing apparel, or it may be used as a covering or bedsheet or it may be used as tapestry or upholstery or as duster for cleaning or as towel for drying the body. A textile may have diverse uses and it is not the use which determines its character as textile." In the aforesaid case, Hon'ble Supreme Court further held that the use does not determine the character as textile. Therefore, an argument that "dryer felts" are used only as absorbents of moisture in the process of manufactur....
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....on of products by any process. All that is necessary is that 'artificial silk', like natural silk, must be a fibre. Accordingly, high density polyethylene must be regarded as falling within the generic term 'artificial silk' and fabrics made out of high density polyethylene, either wholly or in part, whether they are hundred per cent pure or not, qualify for exemption from sales tax as goods falling within the description 'artificial silk fabrics' set out in item 4 of the Third Schedule to the Tamil Nadu General Sales Tax Act, 1959. In the understanding of an expression, courts will not be doing violence to the principles of statutory construction if they pay regard to how such an expression is understood not only by the trade or by high technology in general, but also by the concerned departments of Government, part of whose task it is to put a correct interpretation on the expression in question for the purpose of running their departments. It was submitted by the Learned Counsel for the appellant relying upon the aforesaid judgments that the rejects/wastes is a necessary concomitant of the processes which plastic dana has to undergo for the emergence of H....