2006 (3) TMI 692 - HC - VAT and Sales Tax

Summary

Issues:
1. Taxability of canvas cloth made of jute under specific notifications.

Analysis:
The dispute in this case revolves around the taxability of canvas cloth made of jute under different notifications. The applicant claimed exemption for canvas cloth made of jute under Notification No. ST-2-303/X-89-7(5)-88-U.P. Act-XV/48-Order-89, while the assessing authority taxed it under the entry "jute and hemp goods" of Notification No. ST-II-7551/X-7(23)-83-U.P. Act XV-48-Order-85. The Tribunal held that canvas cloth made of jute is considered jute cloth and is taxable under the latter notification.

The Tribunal's findings highlighted that the canvas dealt with by the appellant is made of jute, sourced from manufacturers in Calcutta. The Tribunal reasoned that since it is made of jute, it falls under the category of jute goods and is taxable. The appellant's reliance on different dictionaries to define canvas was considered irrelevant, as the key factor was that the canvas in question was made of jute, which is taxable. The Tribunal also referenced past judgments to support their decision, emphasizing that the commodity in question, known as "tat," is used as packing material and does not meet the criteria for exemption under the relevant notifications.

The applicant argued that canvas cloth made of jute should be exempted from tax based on various dictionary definitions and principles of interpretation favoring the assessee in cases of ambiguity. However, the learned Standing Counsel contended that the canvas cloth made of jute, being stout and densely woven, is essentially a type of jute cloth and should be taxed accordingly. The Standing Counsel further emphasized that jute cloth is specifically excluded from the textile category, making it ineligible for exemption under the relevant notifications.

Upon reviewing the notifications and dictionary definitions of canvas, the court upheld the Tribunal's decision, stating that canvas cloth made of jute, despite being a type of canvas cloth, is ultimately considered jute cloth and falls under the entry for jute and hemp goods for taxation purposes. The court found no ambiguity in the notifications and ruled that the canvas cloth made of jute does not qualify for exemption under the relevant provisions.

In conclusion, all three revisions challenging the taxability of canvas cloth made of jute were dismissed for lacking merit, affirming the decision that such cloth is taxable as jute and hemp goods under the applicable notification.