2003 (12) TMI 619 - HC - VAT and Sales Tax

Summary

Issues:
1. Taxability of "leather cloth" under U.P. Sales Tax Act and Central Sales Tax Act.
2. Interpretation of the term "textile" under the notification issued under section 4 of the Act.

Analysis:
1. The dispute in the present case revolves around the taxability of "leather cloth" and whether it qualifies as a textile exempted from tax. The Tribunal determined that "leather cloth" is indeed a textile and therefore exempt from tax. This decision was based on a chemical examination conducted by the Sales Tax Officer, which revealed the composition of the product to be 54% rexine and 40% cotton with a pure cotton base cloth. The Tribunal noted that this fact was undisputed by the department and cited previous cases where similar products were treated as exempt from tax. Additionally, the Tribunal highlighted the exclusion of certain materials from the textile category in 1985, indicating that prior to that, they were considered part of textiles.

2. The judgment delves into the interpretation of the term "textile" as per the relevant notification. Reference is made to a Supreme Court case concerning the interpretation of "textile" in a broader sense, emphasizing that the concept of textiles is dynamic and expansive, encompassing various fabrics manufactured from diverse materials. The judgment also cites another Supreme Court case where the court concluded that a tyre cord fabric was regarded as a textile fabric, based on comprehensive considerations and interpretations of relevant materials. Further, the judgment refers to other cases where fabrics impregnated with specific materials were classified as cotton fabrics, reinforcing the broad scope of what constitutes textiles.

In conclusion, the High Court upheld the Tribunal's decision regarding the taxability of "leather cloth" as a textile exempt from tax. The court reasoned that since the product was found to be a cotton-coated fabric, it fell under the category of cotton fabric and therefore qualified as a textile. The judgment also highlighted the common usage of leather cloth as a textile in various products like coats, jackets, and table sheets. Consequently, the court found no error in the Tribunal's order and dismissed the revisions, affirming the tax exemption status of the leather cloth.