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TMI Blog1973 (6) TMI 62X X X X Extracts X X X X X X X X Extracts X X X X ..... to which zalars were attached. The dispute before the Tribunal was confined only to sales of saris with zalars amounting to Rs. 40,425, and the question that arose before the Tribunal was whether the said turnover could not be considered for the purpose of taxation, in view of the contention that the saris to which zalars were attached were covered by entry 41 of Schedule A with the consequence that their sale was free from any taxation. The Tribunal following the decision of this court in the case of Pravin Bros. v. The State of Gujarat[1964] 15 S.T.C. 478., came to the conclusion that the saris to which zalars were attached was a different commodity and was covered by entry 11A or 19 to Schedule E to the Act, and hence the turnover in that respect was liable for taxation under the Act. At the instance of the partnership-firm, the Tribunal has referred 3 questions to us for our answers and they are: "(1) Whether, on the facts and in the circumstances of the case, the sales of saris of art silk fabrics to which zalars, that is, borders are attached by stitching them to saris after the process of manufacture are covered by entry 41 of Schedule A and, therefore, exempt from tax und ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... at a price not less than Rs. 30 per piece. Explanation.-A sari decorated in the process of its weaving shall not be deemed to be a decorated sari for the purpose of this entry." Section 5 of the Act provides, so far as relevant, that notwithstanding anything in the Act, but subject to the conditions or exceptions, if any, set out against each of the goods specified in column 3 of Schedule A, no tax shall be payable on the sales or purchases of any goods specified in that schedule. It was contended by Mr. Kaji that under the provisions of section 5, a dealer would not be liable to pay any tax on the sales or purchases of any goods set out in Schedule A to the Act. He further contended that in order to find out whether the article is taxable or not it was necessary first to look at the entries in Schedule A, which refer to goods which are exempted from the payment of tax. If the article under consideration falls in any of the entries in Schedule A, the question of considering whether the article falls in any other entry of other schedules does not arise. This is so, he contended, because of the overriding provisions of section 5. The said section proceeds on the footing that the go ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... entry 29 of Schedule A, for the exemption granted under section 5 is an overriding exemption which prevails notwithstanding anything contained in any other provision of the Act." It was argued by Mr. Kaji that there is a direct conflict between the ratio laid down in Umedram's case[1965] 16 S.T.C. 1059. and the ratio laid in Pravin Bros. v. The State of Gujarat[1964] 15 S.T.C. 478., and, therefore, the case should be referred to a larger Bench. We will now consider the contention of Mr. Kaji. The scheme of the Sales Tax Act is to levy sales tax on all goods when the turnover in respect of the goods exceeds a certain limit. In the Act are enacted various schedules containing various entries which refer to various articles or commodities on which the tax is payable at the rate mentioned therein or which are exempted from the payment of tax. Each entry in the schedule refers to a distinct commodity or article or, to put in other words, the commodity or article which is described in each entry is distinct and different. For the determination of liability to pay tax or at the rate of which it is payable or whether the article Is exempted or not from the payment of tax, the relevant ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the First Schedule to the Central Excises and Salt Act, 1944. Entry 3(i) in Schedule E provided that saris embroidered or otherwise decorated and sold at a price not exceeding Rs. 12 per piece were liable to pay tax at a certain rate. There was an explanation to this entry which provided that a sari decorated in the process of its weaving should not be deemed to be a decorated sari for the purpose of this entry. The question which arose before the court was whether 5 yards pieces and 3 yards pieces of malmal and voil cloth fall within entry 15 of Schedule A or entry 3(i) of Schedule E? Section 5 of the Act also came for interpretation of the court. While considering the said question, the court observed as follows: "The question that falls for our determination is whether after the dealer cuts out five yards pieces from the takas of malmal and voil, and has embroidery superimposed upon them for the purpose of selling those pieces as embroidered saris, such articles can still be said to be cotton fabrics within the meaning of entry 15 of Schedule A. The contention of Mr. Modi was that such sari pieces would still be cotton fabrics within the meaning of entry 15 of Schedule A and ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rs them subject to entry 3 in Schedule E to the Act. Entry 15 in Schedule A to the Act exempting cotton fabrics of all varieties is a general entry, while entry 3 in Schedule E is a specific entry dealing only with specific kinds of goods. It is a well-settled rule of construction that where a statute contains both a general provision as well as a specific provision, the latter must prevail. Furthermore, where there are two provisions apparently in conflict with one another, the attempt, while construing them, must be to bring about harmony between the two and not to treat them as repugnant to each other. Upon these two principles of construction also, we must hold that the pieces of malmal or voil cloth over which embroidery is superimposed after the process of their manufacture is completed and are sold as embroidered saris, would not be cotton fabrics within the meaning of item 19 in the First Schedule to the Central Excises Act." This case is a direct authority on the question which arises before us. We will, therefore, examine the arguments of Mr. Kaji whether there is any conflict between the ratio laid down in Umedram's case[1965] 16 S.T.C. 1059. and Pravin's case[1964] ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... yon or artificial silk either wholly or partly. If during the process of manufacturing of rayon or artificial silk saris some decorations or embroidering is made, then the article would not come out of the said entry. This is so because the saris thus manufactured would not be governed by entry 11A or 19 of Schedule E because of the explanation enacted to those entries. What has happened in the present case is that the artificial silk saris were first produced. The production of the said article was complete. Thereafter the process of attaching zalar was employed so as to make them embroidered or decorated saris. The legislature treats the two kinds of saris differently, namely, the sari which is produced by a process of manufacture and the sari to which the zalar is superimposed. The additional process of attaching zalar to the saris is an independent process and not ancillary to the manufacturing of the art silk saris. The article thus produced by the process of attaching zalar is a different article and known in common parlance as embroidered or decorated saris. It is a different article because something is superimposed upon it by an independent process. Such embroidered or dec ..... X X X X Extracts X X X X X X X X Extracts X X X X
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