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TMI Blog1962 (12) TMI 50X X X X Extracts X X X X X X X X Extracts X X X X ..... ion the opponents contended that hessian sold by them under the aforesaid bill was not lying with them on 15th December, 1959, nor did it form part of any other dealer's non-dutiable stock of hessian. They also contended that the sales of varieties of cloth manufactured in mills or on powerlooms (excluding pure silk cloth) are exempt from tax under entry 1 of the Bombay Sales Tax Laws (Special Exemptions) Act, 1957 (to be hereinafter referred to as the Exemption Act). Their contention was rejected by the Additional Collector of Sales Tax by his order dated 19th August, 1959, by which he held that tax was payable on the sale of hessian at the rate of 2 nP. in the rupee (sales tax) and 2 nP. (general sales tax) under the Bombay Sales Tax Act, 1953. Being aggrieved by the above order the opponents preferred an appeal to this Tribunal being appeal No. 7 of 1959. In the said appeal they contended inter alia that hessian was cloth within the meaning of the Exemption Act and its sale was exempt from all tax under the Bombay Sales Tax Act, 1953. The Tribunal accepted their contention by a majority holding that hessian was cloth within the meaning of the Bombay Sales Tax Act, 1953, and it w ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ot 15th December, 1959, as stated in the statement of the case. The additional Collector of Sales Tax, by his order dated 19th August, 1959, held that tax was payable on this sale of hessian at the rate of two naye paise in the rupee by way of sales tax and two naye paise in the rupee by way of general sales tax under the Bombay Sales Tax Act, 1953. The matter was carried further before the Sales Tax Tribunal. The Sales Tax Tribunal, by a majority judgment, held that the aforesaid sale was exempt from payment of sales tax and general sales tax. The matter has now come up before us for the determination of the following question: "Whether on a proper construction 'hessian' is covered by entry 1 of Schedule I of the Bombay Sales Tax Laws (Special Exemptions) Act, 1957, and whether the sale of hessian which is the subject of the reference is taxable under the Bombay Sales Tax Act, 1953?" The Bombay Sales Tax Laws (Special Exemptions) Act, 1957, by section 4 provides inter alia as under: "Notwithstanding anything contained in relevant sales tax law or any rules, notifications or orders made or issued thereunder, no tax shall be payable under the relevant sales tax law on the sale or ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nd for various other purposes, as household furnishings..........". The word "hessian" has been shown in Webster's New International Dictionary, Second Edition (1959) to mean "A coarse sacking of hemp or hemp and jute". In the Shorter Oxford English Dictionary, Third Edition, (1959), it is stated to mean "A strong coarse cloth, used for packing bales ". In the Webster's New Dictionary, Second Edition, it is shown to mean "A coarse sacking of hemp or jute". In view of the meaning which the word "cloth" and "hessian" bear, having regard to what is stated in various dictionaries, hessian is liable to be regarded as cloth prepared from fibres of hemp or jute and could be said to be cloth. The question that we have to consider is whether the term "cloth" has been used in Schedule I in a limited sense which would exclude hessian. It has been strongly urged before us that the word "cloth" should be given a limited meaning and should not be held to cover "hessian" having regard to the object with which the exempting Act was enacted. The exempting Act was enacted, as stated in the preamble of the Act, to exempt the sales or purchases of certain goods which became assessable to an addition ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... that Schedule". When we turn to the Second Schedule, Part III, it is there laid down that if during a particular financial year, there is levied and collected in any State specified in the Table (which includes Bombay) a tax on the sale or purchase of cotton fabrics, rayon or artificial silk fabrics or woollen fabrics by or under any law of that State, no sums shall be payable to that State under clause 6(b) thereof in respect of that financial year, unless the Central Government by special order otherwise direct. The exempting Act was passed inter alia for the purpose of securing payment out of the Consolidated Fund of India under the provisions of section 4 of the Additional Duties of Excise (Goods of Special Importance) Act, 1957. Under the provisions of the aforesaid Central Act, additional excise duty was not levied in respect of hessian and it is urged that in the context of the circumstances under which the exempting Act was enacted, the term "cloth" should be given a limited meaning, namely, that it should be confined to cotton fabrics, rayon or artificial silk fabrics and woollen fabrics. There would have been some substance in this contention if the exempting Act had be ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ile fabrics of any kind including sarees, dhotis, sheets, chaddars, blankets and other similar articles except (i) cloth woven on handlooms and (ii) coarse and medium cotton cloth woven in mills or on power-looms sold at a rate not less than Rs. 3 per yard. Eight naye paise in the rupee. Three naye paise in the rupee. 80. All goods other than those specified from time to time in Schedule A and in the preceding entires. Two nay paise in the rupee. Three naye paise in the rupee. It is urged that the expression "cloth" as appearing in entry 31 does not cover hessian. Entry 24-A which covers hessian was inserted by Government notification of 25th August, 1956, with effect from 1st September, 1956. It is urged that prior to the insertion of that entry, sales and purchases of hessian were taxed by the Sales Tax Authorities under the residuary item 80 and not under item 31. That however does not conclude the matter. The dictionary meaning of the word "cloth", as we have stated above, is wide enough to cover hessian and the sales and purchases therein could have been taxed under entry 31 before the specific entry ..... X X X X Extracts X X X X X X X X Extracts X X X X
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