9911796707
TMI Blog1981 (8) TMI 210X X X X Extracts X X X X X X X X Extracts X X X X ..... materials for the collars of shirts, etc., as stated above. The opponent-firm made an application under section 62 of the Gujarat Sales Tax Act, 1969, to the Deputy Commissioner for determination as to what would be the appropriate entry in the schedule under which these goods could be taxed. Two bills were produced with the application being bills Nos. 309 and 387 of 25th May, 1974, and 27th July, 1974, respectively. By bill No. 309 the materials known as "inter-lining collar cuttings" were sold while by bill No. 387 the materials known as "inter-lining double collar cuttings" were sold. The former materials, namely, inter-lining collar cuttings, are prepared out of ordinary cotton cloth of a particular type manufactured by certain textile mills for this purpose. The cloth is required to be cut into shapes of different sizes of collars. The latter materials, namely, inter-lining double collar cuttings, are prepared from two types of cotton cloth; one type of cotton cloth is the same from which inter-lining collar cuttings are prepared whereas the other type of cotton cloth is a cloth superimposed with certain plastic materials on one side. This cloth is also cut into pieces of par ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... repelled by the learned Government Agent that they were not ready-made garments or articles which can be used by the consumers, inasmuch as they are required to be inserted in collars of the garments, namely, shirts, etc., so as to give stiffness to the collars of those garments. The Tribunal, having regard to these rival contentions and the facts which have been found about how these articles are prepared and also on consideration of the different decisions, which were cited at the Bar, reached the conclusion that collar cuttings in question sold by the opponent-firm would be cotton fabrics as falling within entry 37 of Schedule I to the said Act. The State Government has, therefore, sought the question for our opinion. At the time of hearing of this reference, the learned Government Pleader urged the following three contentions: 1.. The articles in question would not fall within the terms of entry 51 of Schedule I to the Sales Tax Act of 1969 inasmuch as they cannot be said to be ready-made garments or articles. 2.. The Tribunal committed a clear error of law in holding that the articles in question would be cotton fabrics within the terms of entry 37 of Schedule I to the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... , fall within entry 37 of Schedule I to the said Act. It is no doubt true that in an application made by the assessee-firm the opponent herein under section 62 of the Gujarat Sales Tax Act, 1969, which provides for the determination of the disputed questions, the contention of the assessee-firm was that the articles in question would fall within entry 51 of the Schedule I. This contention did not find favour with the Deputy Commissioner who held that since there was no specific provision or a general provision under which these articles could be subjected to tax, they must necessarily therefore be taxed under the residuary entry 13 of Schedule III to the said Act. In appeal, however, at the instance of the assessee before the Tribunal, a contention was urged on behalf of the assessee-firm that the articles would be covered by entry 37 and in the alternative by entry 51. The Tribunal agreed with the assessee-firm that the articles would fall within entry 37 of the Act. Having accepted this contention that the articles would fall within the general provision pertaining to cotton fabrics as prescribed under entry 37, the alternative Contention was not required to be gone into. Once ha ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... entire item 19 from the First Schedule to the Central Excises and Salt Act, 1944: Item No. Description of goods Rate of duty (1) (2) (3) "19. Cotton fabrics- 'Cotton fabrics' means all varieties of fabrics manufactured either wholly or partly from cotton and includes dhoties, sarees, chadars, bed-sheets, bedspreads, counter-panes, table-cloths, embroidery in the piece, in strips or in motifs and fabrics impregnated or coated with preparations of cellulose derivatives or of other artificial plastic materials but does not include any such fabric if it contains- (i) 40 per cent or more by weight of wool; (ii) 40 per cent or more by weight of silk; (iii) 60 per cent or more by weight of rayon or artificial silk; or (iv) 60 per cent or more by weight of jute (including Bimlipatam jute or mesta fibre): Provided that in the case of embroidery in the piece, in strips or in motifs and fabrics impregnated or coated with preparations of cellulose derivatives or of other artificial plastic materials, the percentages referred to ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... here cotton fabrics as defined in item 12 (now item 19) of the First Schedule to the Central Excises and Salt Act, 1944, were exempted from the liability of sales tax under Schedule A as provided in section 5 of the said Act. Now, entry 12, as it then stood, was referred and set out in the decision of the Division Bench at page 481 as under: "........................According to item 19 in the First Schedule to the Central Excises Act, 'cotton fabrics' mean all varieties of fabrics manufactured either wholly or partly from cotton, and include dhoties, sarees, chadars, etc., but do not include any such fabric if it contains 40 per cent or more by weight of wool, if it contains 40 per cent or more by weight of silk, if it contains 60 per cent or more by weight of rayon or artificial silk, or if manufactured on a handloom." In the context of that entry, the Division Bench, speaking through Shelat, C.J., negatived the contention urged on behalf of the assessee that saree pieces would still be cotton fabrics after superimposition of embroidery on them as specified by entry 15 of Schedule A and held as under: ".......................The contention of Mr. Mody was that such sare ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... red or decorated sarees that the Division Bench reached the conclusion as it did in Pravin Bros.' case [1964] 15 STC 478. There is also another aspect of the question which would justify the distinction which has been rightly made by the Tribunal in holding that the ratio of Pravin Bros.' case [1964] 15 STC 478 would not be of any assistance to the present case with which we are concerned., The context of item 19 which is materially different from the one with which the Division Bench was concerned in Pravin Bros.' case [1964] 15 STC 478 makes a lot of difference because the cotton fabrics as defined in item 19 now includes fabrics impregnated or coated with preparations of cellulose derivatives or of other artificial plastic materials subject to the proviso which enjoins that in cases of fabrics impregnated or coated with preparations of cellulose derivatives or of other artificial plastic materials the percentage referred to in (i) to (iv) of the main enactment of the item shall be considered in relation to the base fabrics which are impregnated, embroidered or coated. It is common ground that the condition prescribed in the proviso is not violated since the Tribunal has foun ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... omplete product 'manufactured either wholly or partly from cotton and is a known commercial commodity. It cannot, therefore, be said that rubber beltings are manufactured wholly or partly from cotton." It is pertinent to note that the Division Bench has indicated the width of item 19 of the Central Excises and Salt Act, 1944, which defines the goods known as "cotton fabrics" in the following terms: "........The definition of 'cotton fabrics' as found in item No. 19 of the First Schedule to the Central Excises and Salt Act shows that it is not intended merely to cover articles known as cotton fabrics in common parlance. It is intended to cover all varieties of fabrics manufactured either wholly or partly from cotton provided they do not contain by weight wool, silk, rayon, or artificial silk in excess of the prescribed percentage. Since the definition embraces an article which might by weight contain, within the prescribed limits, specified material other than cotton, it appears that it is intended to cover an article which may not be understood in common parlance as 'cotton fabrics'..............." It should be noted that these articles in question cannot appropriately be pla ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
