TaxTMI 
TaxTMI 
1974 (7) TMI 56
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....ery cloth was exempt from sales tax under a certain notification to be referred to hereinafter in this judgment. He, however, imposed sales tax on the sale of hosiery goods, namely, banyans. The contention on behalf of the assessee was that under the notification dated the 1st of July, 1959, sale of hosiery banyans was also exempt from sales tax. This contention was repelled by the appellate authority as also by the Deputy Commissioner of commercial taxes in revision. The assessee filed a second revision before the Commercial Taxes Tribunal. Agreeing with the Departmental Authorities, the Tribunal has upheld the imposition of sales tax on sale of hosiery banyans. Hence this reference. 3. Notification No. STGL-AR-107/59-9134-F.T., dated the 1st of July, 1959, was issued by the Governor of Bihar in exercise of his powers under Section 4(3)(a) of the Act. He was pleased to exempt the goods specified in the second column of Schedule III annexed to the Notification from the levy of both "general sales tax" and "special sales tax" Item No. 23 of Schedule III reads as follows :- "Cotton fabrics,rayon or artificial silk fabrics, woollen fabrics, sugar and tobacco, as defined in....
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....em 19 of the First Schedule of the Central Excises and Salt Act, 1944. We have therefore, to go to Item 19 of Schedule I of the 1944 Act. In the said entry it is mentioned : 'Cotton fabrics' means all varieties of fabrics manufactured either wholly or partly from cotton, and include dhoties, sarees, chadars, bed-sheets, bed spreads, counterpanes and table-clothes, but do not include any such fabric - (a) if it contains 40 per cent, or more by weight of wool; (b) if it contains 40 per cent, or more by weight of silk; or (c) if it contains 60 per cent, or more by weight of rayon or artificial silk; The 1957 Act was meant to impose additional Excise duty on certain goods. Under the Central Excise Rules, 1944 power has been given to the authorities concerned to exempt certain goods from levy of certain duties. In exercise of that power a notification was issued in the year 1955 by the Central Government exempting cotton fabrics described in that notification from the whole of duty leviable thereon under the Central Excise and Salt Act, 1944. Item 1 of this notification is "hosiery". It would thus be seen that although the expression 'cotton fabrics' in item 19 of Schedul....
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....at is meant by cotton fabrics. It means cotton cloth, and although dhoties, sarees, chadars, etc., could be included in the expression 'cotton cloth' because of borders being there or some stitching being there, one could say that they have ceased to be a piece of cotton cloth, and, therefore, the word "include" makes them go within the ambit of the expression 'cotton fabrics'. If the Legislature thought to include dhoties, sarees, chadars, etc., by an express language in the expression 'cotton fabrics' and if they meant to include hosiery cloth or hosiery goods in it, they would have surely described them as being inclusive in the definition. Dhoties, sarees, chadars, etc., in common parlance and description are nearer to the expression 'cotton cloth' than knitted hosiery cloth meant for manufacture of hosiery goods. If the nearer cloth and goods were sought to be included expressly then the remote ones could not be left out from enumeration after the word, "include if the Legislature thought them to include in the expression 'cotton fabrics'. To my mind, therefore, the expression 'cotton fabrics' by itself as mentioned in Item 19 of Schedule I of the Central Excises and Salt Act ....
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....1031 (ALL.), the Allahabad High Court pointed out the difference between the term 'cloth' and' colthes'. The former is what comes straight from the weaving or textile factory and the latter are articles after 'cloth' has been converted by cutting and stitching and something has been done to 'cloth' either by human or machine agency to make that 'cloth' into a garment or wearing apparel. From 'hosiery cloth' are manufactured banyans. Therefore, banyans will be surely different from hosiery cloth, and that is one of the reasons why I have said above that even if hosiery cloth would be included in the expression 'cotton fabrics', banyans which are made from hosiery cloth cannot be so. A Bench of the Gujarat High Court in Pravin Bros. v. The State of Gujarat, (1964) 15 STC 478 (Guj.) held that embroidered sarees and embroidered pieces intended for 'ladies' underwear made from Malmal and voil cloth would not fall under Entry 15 of Schedule A or Entry 4 of Schedule D of the Statute in question, as it could not be treated as cotton fabric. It was something other than cotton fabric simpliciter. This decision lends some support to the view expressed by me above and can be pressed into servi....