1990 (9) TMI 333 - AT - VAT and Sales Tax

Summary

Issues:
1. Whether gas mantles satisfy the definition of 'artificial silk fabric' as given in the First Schedule to the Central Excises and Salt Act, 1944?
2. In the event of gas mantles being classified as 'artificial silk fabric', whether sales of such materials are entitled to the deduction under rule 3(28) of the Bengal Sales Tax Rules, 1941?

Detailed Analysis:

Issue 1:
The case involves a reference under section 21(2)(b) of the Bengal Finance (Sales Tax) Act, 1941, regarding the classification of gas mantles. The applicant-assessee claimed that gas mantles are artificial silk fabrics manufactured from cylindrically knitted artificial silk impregnated with chemicals. The central question is whether gas mantles fall within the definition of "artificial silk fabric" as per the First Schedule to the Central Excises and Salt Act, 1944. The applicant contended that gas mantles should be considered a variety of artificial silk fabric, while the State Representative argued against this classification, stating that gas mantles are a distinct commercial commodity and not a variety of artificial silk fabric.

Issue 2:
The Tribunal considered various legal precedents cited by both parties. The applicant relied on cases like Porritts & Spencer (Asia) Ltd. v. State of Haryana, where the Supreme Court interpreted the term "textiles" in its popular sense. Additionally, references were made to cases such as State of Gujarat v. Sakarwala Brothers and Commissioner of Sales Tax v. Ashok Elastic Works to support the contention that certain products fell within specific definitions under tax laws. However, the Tribunal found these references inconclusive in determining whether gas mantles could be classified as artificial silk fabric. The Tribunal emphasized the need to interpret the term "fabric" or "textiles" according to common understanding and noted the distinction between a variety and form in legal definitions. Ultimately, the Tribunal agreed with a previous decision by the Calcutta High Court that gas mantles do not qualify as a variety of artificial silk fabric, leading to a negative answer to the first question. Consequently, the second question regarding the entitlement to tax deduction under rule 3(28) did not require consideration.

In conclusion, the Tribunal disposed of the reference without costs, with all members concurring.