1964 (11) TMI 88 - HC - VAT and Sales Tax

Summary

Issues Involved:
1. Whether borders woven on handloom out of pure silk, art silk, and jari threads are handloom cloth within the meaning of entry 29 in Schedule A of the Bombay Sales Tax Act, 1959.
2. If the borders are considered handloom cloth, whether their sale can be taxed under entry 9 of Schedule E of the Bombay Sales Tax Act, 1959.

Detailed Analysis:

Issue 1: Definition of Handloom Cloth
The primary issue is whether borders woven on handloom from pure silk, art silk, and jari threads qualify as "handloom cloth" under entry 29 in Schedule A of the Bombay Sales Tax Act, 1959. The court examined the definition of "handloom cloth" and whether it should be interpreted in its primary technical sense or its secondary popular sense. The term "cloth" in its primary sense includes any woven fabric, but in its secondary or popular sense, it is understood to mean fabric used for garments or coverings.

The court referred to the principle established in Ramavatar Budhaiprasad v. The Assistant Sales Tax Officer, which states that words in a statute should be interpreted in their popular sense, meaning "that sense which people conversant with the subject-matter with which the statute is dealing would attribute to it." This principle was applied in the case of Vrajlal v. State of Gujarat, where it was held that carpets made of cotton yarn on handloom were not considered "handloom cloth."

The court concluded that the word "cloth" in entry 29 must be interpreted in its popular sense. In common parlance, "cloth" refers to fabric used for garments, coverings, or similar purposes, and does not include borders. Borders are distinct commercial commodities and are not regarded as "cloth" by traders or the public. Therefore, borders woven on handloom do not fall under the definition of "handloom cloth" in entry 29 of Schedule A.

Issue 2: Taxability under Entry 9 of Schedule E
Given the court's conclusion on the first issue, the second issue regarding the taxability of borders under entry 9 of Schedule E does not arise. The court noted that if borders were considered "handloom cloth," their sale would be exempt from tax under entry 29 of Schedule A, overriding any other provisions in the Act. However, since borders are not considered "handloom cloth," they do not qualify for this exemption and are taxable under entry 9 of Schedule E, which covers braids, borders, laces, and trimmings sold by weight or length.

Conclusion:
The court answered the first question in the negative, determining that borders woven on handloom from pure silk, art silk, and jari threads are not "handloom cloth" within the meaning of entry 29 in Schedule A of the Bombay Sales Tax Act, 1959. Consequently, the second question regarding their taxability under entry 9 of Schedule E does not arise. The assessee was ordered to pay the costs of the reference to the State.