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TMI Blog1974 (7) TMI 97X X X X Extracts X X X X X X X X Extracts X X X X ..... , imposed sales tax on the sale of hosiery goods, namely, banyans. The contention on behalf of the assessee was that under the notification dated 1st July, 1959, sale of hosiery banyans was also exempt from sales tax. This contention was repelled by the appellate authority as also by the Deputy Commissioner of Commercial Taxes in revision. The assessee filed a second revision before the Commercial Taxes Tribunal. Agreeing with the departmental authorities, the Tribunal has upheld the imposition of sales tax on the sale of hosiery banyans. Hence this reference. 3.. Notification No. STGL-AR-107/59-9134-F.T. dated 1st July, 1959, was issued by the Governor of Bihar in exercise of his powers under section 4(3) (a) of the Act. He was pleased to exempt the goods specified in the second column of Schedule III annexed to the notification from the levy of both "general sales tax" and "special sales tax". Item No. 23 of Schedule III reads as follows: "Cotton fabrics, rayon or artificial silk fabrics, woollen fabrics, sugar and tobacco, as defined in the Additional Duties of Excise (Goods of Special importance) Act, 1957, and handloom cloth excluding pure mill cloth." Another notificati ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... brics' mean all varieties of fabrics manufactured either wholly or partly from cotton, and include dhoties, sarees, chadars, bedsheets, bed spreads, counterpanes and table-cloths, but do not Include any such fabric: (a) if it contains 40 per cent or more by weight of wool; (b) if it contains 40 per cent or more by weight of silk; or (c) if it contains 60 per cent or more by weight of rayon or artificial silk.........." The 1957 Act was meant to Impose additional excise duty on certain goods. Under the Central Excise Rules, 1944, power has been given to the authorities concerned to exempt certain goods from the levy of certain duties. In exercise of that power a notification was issued in the year 1955 by the Central Government exempting cotton fabrics described In that notification from the whole of duty leviable thereon under the Central Excises and Salt Act, 1944. Item 1 of this notification is "hosiery". It would thus be seen that although the expression "cotton fabrics" in item 19 of Schedule I of the Central Excises and Salt Act, 1944, in its inclusive definition did not include hosiery but included dhoties, sarees, chadars, bed-sheets, etc., in the notification issued ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... eing there, one could say that they have ceased to be a piece of cotton cloth and, therefore, the word "include" makes them go within the ambit of the expression "cotton fabrics". If the legislature thought to include dhoties, sarees, chadars, etc., by an express language in the expression "cotton fabrics" and if they meant to include hosiery cloth or hosiery goods in it, they would have surely described them as being inclusive in the definition. Dhoties, sarees, chadars, etc., in common parlance and description are nearer to the expression "cotton cloth" than knitted hosiery cloth meant for manufacture of hosiery goods. If the nearer goods were sought to be included expressly, then the remote ones could not be left out from enumeration after the word "include" if the legislature thought them to Include in the expression "cotton fabrics". To my mind, therefore, the expression "cotton fabrics" by itself as mentioned in item 19 of Schedule I of the Central Excises and Salt Act will not include hosiery goods. Even without stretching the imagination one could say that even knitted cotton cloth, like hosiery cloth, is included in the expression "cotton fabrics". But in the context of wh ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... been converted by cutting and stitching and something has been done to "cloth" either by human or machine agency to make that "cloth" into a garment or wearing apparel. From "hosiery cloth" are manufactured banyans. Therefore, banyans will be surely different from hosiery cloth, and that is one of the reasons why I have said above that even if hosiery cloth would be included in the expression "cotton fabrics", banyans which are made from hosiery cloth cannot be so. A Bench of the Gujarat High Court in Pravin Bros. v. State of Gujarat[1964] 15 S.T.C. 478. held that embroidered sarees and embroidered pieces intended for ladies' underwear made from malmal and voil cloth would not fall under entry 15 of Schedule A or entry 4 of Schedule D of the Statute in question, as it could not be treated as cotton fabric. It was something other than cotton fabric simpliciter. This decision lends some support to the view expressed by me above and can be pressed into service in favour of the revenue. The learned counsel for the assessee relied upon another decision of the same Bench of the Gujarat High Court at page 586 of the same volume, that is, 15 Sales Tax Cases (Vaiswaner Trading Co. v. State ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... al Society[1968] 22 S.T.C. 470., the Madras High Court held that braided cords are not laces but a variety of textile within the meaning of entry 4 of the Third Schedule to the Madras General Sales Tax Act, 1959. The same dictionary meaning of the word "fabric" from the Concise Oxford Dictionary was relied upon to show that braided cords are cotton fabrics. But, In my opinion, hosiery goods are not so. The Allahabad High Court has taken the view in the case of Commissioner of Sales Tax, U.P. v. Ashok Elastic Works[1971] 28 S.T.C. 743. that dori and fita are cotton fabrics. "Cotton fabrics of all varieties" were meant to be included in the expression. The two articles, it was not disputed, were manufactured out of cotton yarn. Mere addition of elastic materials, the nature of which was not specified In the statement of the case, could not alter its nature. In my opinion, hosiery goods cannot be equated with the articles, dori and fita, which were under consideration in the Allahabad case(2). 9.. For the reasons stated avove, the question of law under reference has got to be answered In the negative in favour of the department and against the assessee. I accordingly hold that, on t ..... X X X X Extracts X X X X X X X X Extracts X X X X
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