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TMI Blog1990 (7) TMI 352X X X X Extracts X X X X X X X X Extracts X X X X ..... of fabric and, therefore, entitled to exemption. The case of the department, on the other hand is that HDPE fabrics-whether laminated or unlaminated, having been specifically excluded from exemptions granted under the aforesaid notification, the petitioner could not claim exemption under clause (vi). In order to appreciate the controversy it will be convenient to have the relevant provisions of the notification before us. The notification dated June 5, 1985, provides: "In exercise of the powers under clause (a) of section 4 of the Uttar Pradesh Sales Tax Act, 1948 (U.P. Act No. 15 of 1948) read with section 21 of the Uttar Pradesh General Clauses Act, 1904 (U.P. Act No. 1 of 1904), the Governor is pleased to make with effect from June 6 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... interpretation of the term "artificial silk fabrics" shall have some relevance in resolving the controversy. The term was subject of judicial pronouncements which we will advert to a little later. Having set out the relevant statutory provisions, we proceed to examine the question arising in this case. The facts are not in dispute. In paragraph 3 of the counter-affidavit of Sri Kuldip Singh, the Sales Tax Officer, Sector 1, Muzaffarnagar, the activity in which the petitioner is engaged has been elaborated. It is said that the petitioner is a registered dealer under the U.P. Sales Tax Act and runs a factory for manufacturing HDPE fabrics (both laminated as well as unlaminated). The unlaminated HDPE fabrics is also known as plain HDPE fabri ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... se nature of HDPE fabrics and observed that simply because HDPE fabrics are not made of yarn but are made of tapes, the plain HDPE fabrics would not be taken out of the purview of artificial silk fabric. This decision has been affirmed by a Division Bench of this Court reported in 1988 UPTC 109 (Polyraf Engineers v. State of Uttar Pradesh). In the case of Delhi Cloth General Mills Co. Ltd. v. State of Rajasthan reported in [1980] 46 STC 256; AIR 1980 SC 1552, their Lordships of the Supreme Court examined the concept of fabric as used in Sales Tax Acts in considerable depth. His Lordship R.S. Pathak, J. (as he then was), speaking for the court, gave to the term "fabric" the widest possible meaning and held that fabric as a term should co ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... on dated June 5, 1985. Clause (vi) specifically exempts synthetic waterproof fabrics from levy of sales tax. The learned Standing Counsel, however, submitted that mere lamination would not take the HDPE fabrics being manufactured by the petitioner from out of the purview of the exception specifically made under entry 53, i.e., being HDPE fabrics it cannot claim exemption from sales tax in view of entry 53 which excepts various items of textiles from the benefit of exemption granted under the notification dated June 5, 1985. The learned Standing Counsel vehemently contended that even after lamination the basic character or texture of the item continues to be HDPE fabrics. We regret the submission of the learned Standing Counsel cannot be a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... no further elaboration beyond a reference to [1973] 89 ITR 236 (SC); AIR 1973 SC 2524 (Commissioner of Income-tax v. Naga Hills Tea Co. Ltd.), [1970] 77 ITR 518 (SC); AIR 1970 SC 1734 [Commissioner of Income-tax v. Kulu Valley Transport Co. (P) Ltd.] and [1968] 68 ITR 252 (SC); AIR 1968 SC 623 (Income-tax Officer v. Devinatha Nadar). The upshot is that laminated HDPE fabrics fall under clause (vi) of the annexure to the notification dated June 5, 1985 being synthetic waterproof fabrics and is, on that account, entitled to exemption from sales tax. The learned Standing Counsel, in the end, submitted that the petitioner has an effective alternative remedy available to him by way of an appeal to the Sales Tax Tribunal against the orders of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... and if the discretion has been exercised by the High Court not unreasonably or perversely, it is the settled practice of this Court not to interfere with the exercise of discretion by the High Court." In the result, the petition succeeds and is allowed. The respondents are restrained from realising any tax from the petitioner on the laminated HDPE fabrics under the Notification No. ST-11-3714/X-6(1)-85 U.P. Act15-48-Order-85, dated June, 5, 1985. If any assessments have been made against the petitioner, treating the laminated HDPE fabrics manufactured by the petitioner as liable to tax, the same shall stand quashed and the tax, if realised from the petitioner, shall be refunded to him within 3 months of the date on which a certified copy ..... X X X X Extracts X X X X X X X X Extracts X X X X
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