1960 (6) TMI 18 - HC - VAT and Sales Tax

Summary

Issues Involved:
Interpretation of the term "cloth" under the Madras General Sales Tax Act, 1939, and the Hyderabad General Sales Tax Act, 1950.

Detailed Analysis:

1. T.R.C. No. 20 of 1959:
The revision petition dealt with the definition of "cloth" under the Madras General Sales Tax Act. The dispute arose when a firm of merchants sold printed sarees, and the tax authority imposed sales tax considering the sales as falling under a specific category. The Sales Tax Appellate Tribunal accepted the contention of the assessee that sarees and dhoties do not fit within the definition of "cloth" as per the Act. The Department sought to revise this decision, arguing that the term "cloth" should be interpreted broadly to include sarees and dhoties. The court, after considering various legal precedents and dictionary definitions, concluded that the term "cloth" has a wide connotation and encompasses fabrics used for garments or wearing apparel. Therefore, the court held that sarees and dhoties fall within the definition of "cloth" under the Act, allowing the revision case of the Department.

2. T.R.C. Nos. 23 and 24 of 1959:
These revisions involved the interpretation of the term "cotton cloth" under the Hyderabad General Sales Tax Act, 1950. The court noted that the term "cotton cloth" should be construed similarly to the interpretation under the Madras General Sales Tax Act. The respondents argued that certain notifications exempting handloom dhoties and sarees implied that sarees should not be considered as cloth. However, the court rejected this argument, stating that the notifications were issued for clarification purposes and should not affect the broad interpretation of the term "cloth." The court held that the turnover covering sales of sarees fell within the scope of the Act's definition of "cloth," allowing one revision and remanding the other for further investigation by the Tribunal.

In conclusion, the court's judgments in these cases emphasized interpreting the term "cloth" broadly to include fabrics used for garments or wearing apparel, such as sarees and dhoties, under the respective Sales Tax Acts. The decisions were based on legal principles, dictionary definitions, and the legislative intent to ensure a comprehensive understanding of the term in the context of the Acts.