1967 (4) TMI 188 - HC - VAT and Sales Tax

Summary

Issues: Interpretation of sales tax exemption under entry 4 of the Madras General Sales Tax Act, 1959 for braided cord.

The judgment delivered by the Madras High Court involved the interpretation of a sales tax exemption under entry 4 of the Madras General Sales Tax Act, 1959 for braided cord. The respondents, a dealer in braided cord and a cooperative society producing braided cord and tape, claimed exemption based on the entry's language encompassing "all varieties of textiles." The department contended that braided cord did not fall within the exemption. The Sales Tax Appellate Tribunal granted the exemption, leading to the government filing revision cases. The court examined the manufacturing process of the product, which involved braiding threads into a finished cord or tape. The department argued that braided cord did not qualify as "laces" in the entry, thus not eligible for exemption. However, the court disagreed, emphasizing that the entry encompassed various textiles and that braided cord was a textile obtained through weaving threads into patterns. The court referred to a previous decision where braided cord was considered a textile product. The Tribunal's interpretation, equating braided cord to "laces," was deemed narrow, as the broader definition of "textile" as a woven product was more appropriate. Consequently, the court dismissed the revision cases, affirming that braided cord qualified for the sales tax exemption under entry 4 of the Act.