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TMI Blog1992 (2) TMI 342X X X X Extracts X X X X X X X X Extracts X X X X ..... by the assessee, the Appellate Deputy Commissioner, Commercial Taxes, Kurnool, held that though the expression "cotton fabrics" in item No. 5 of the Fourth Schedule to the Act may include "tarpaulin cloth" in rolls, it did not include tarpaulin which was a finished product, and that finished tarpaulin was entirely a different product and in that view rejected the contention on behalf of the assessee that even though there was some work done on the processed canvas cloth, the cost of the work, namely, stitching the ends and eyeletting, would be very negligible and that, therefore it should be considered that tarpaulin was only processed canvas cloth. On further appeal, as already stated above, the Tribunal upheld the contention of the assessee and held that the turnover of tarpaulin sales was not assessable to tax and allowed the appeal of the assessee relying on the decisions of Karnataka High Court in Bharat Textile and Proofing Industries v. State of Karnataka [1988] 71 STC 10 and of this Court in State of A.P. v. Goodyear India Ltd. [1989] 74 STC 47. The learned Government Pleader contends that applying the user test, tarpaulin cannot fall under the expression "cotton fabrics ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... man-made fabrics' shall have the meanings respectively assigned to them in items Nos. 1, 4, 19, 20, 21 and 22 of the First Schedule to the Central Excises and Salt Act, 1944." During the period 1983-84, "cotton fabrics" was defined in item No. 19 of the First Schedule to the Central Excises and Salt Act, 1944 ("the Central Excises Act" for short) in the following manner: "19. Cotton fabrics: 'Cotton fabrics' means all varieties of fabrics manufactured either wholly or partly from cotton and includes dhoties, sarees, chaddars, bedsheets, bed-spreads, counter-panes, table-cloths, embroidery in the piece, in strips or in motifs and fabrics impregnated, coated or laminated with preparations of cellulose derivatives or of other artificial plastic materials and fabrics covered partially or fully with textile flocks or with preparations containing textile flocks, if (i) in such fabrics cotton predominates in weight, or (ii) such fabrics contain more than 40 per cent by weight of cotton and 50 per cent or more by weight of non-cellulosic fibres or yarn or both: Provided that in the case of embroidery in the piece, in strips or in motifs, fabrics impregnated, coated or laminated with ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t only all varieties of fabrics manufactured either wholly or partly from cotton but also includes the fabrics impregnated or coated or laminated with preparations of cellulose derivatives or of other artificial plastic materials. We are of the view that the word "includes" is used while defining "cotton fabrics" in order to enlarge the meaning of the said expression. In Commissioner of Income-tax v. Taj Mahal Hotel [1971] 82 ITR 44; AIR 1972 SC 168 the Supreme Court held as follows: "Now it is well-settled that where the definition of a word has not been given, it must be construed in its popular sense if it is a word of every day use. Popular sense means 'that sense which people conversant with the subjectmatter with which the statute is dealing, would attribute to it'............ The word 'includes' is often used in interpretation clauses in order to enlarge the meaning of the words or phrases occurring in the body of the 'statute'. When it is so used, these words and phrases must be construed as comprehending not only such things as they signify according to their nature and import but also those things which the interpretation clause declares that they shall include." The ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... State of Gujarat [1982] 51 STC 88, wherein also the question that arose for consideration was whether tarpaulin was a cotton fabric as defined in the said item No. 19 at the relevant time. After elaborately considering all aspects of the matter, the Gujarat High Court held that tarpaulin came within the said enlarged definition of "cotton fabrics". The Karnataka High Court also took the same view in Bharat Textile and Proofing Industries v. State of Karnataka [1988] 71 STC 10 and held that tarpaulin and P.V.C. rexine cloth fell within the meaning of the expression "cotton fabric" as defined by item No. 19 of the First Schedule to the Central Excises and Salt Act, as amended by the Finance Act, 1969. The decisions of the Madras High Court in State of Tamil Nadu v. East India Rubber Works [1974] 33 STC 399 and Jeewajee Co v. State of Tamil Nadu [1974] 34 STC 4, relied upon by the Government Pleader are of no assistance because they dealt with the meaning of "all varieties of textiles" as used in the Madras General Sales Tax Act, 1959. Item No. 4 of Schedule III to the Madras General Sales Tax Act was then as follows: "All varieties of textiles (other than durries, carpets, drugg ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... case, took note of the fact that P.V.C. rexine cloth resembles leather and is known in trade circles as 'artificial leather' or 'leather cloth' and that the mere fact that it is an article with cloth as base will not make it a cloth or textile." To the same effect is the decision of the Madras High Court in Saravanan Rexine v. Union Territory of Pondicherry [1983] 54 STC 77 wherein the Madras High Court was considering the expression "textiles" as defined in item No. 31 of the Third Schedule to the Pondicherry General Sales Tax Act, 1967. The Madras High Court held that item No. 31 of the Third Schedule to the Pondicherry Act was a carbon copy of item No. 4 of the Third Schedule to the Tamil Nadu General Sales Tax Act, 1959 and therefore, followed its earlier decisions in State of Tamil Nadu v. East India Rubber Works [1974] 33 STC 399 and Jeewajee Co v. State of Tamil Nadu [1974] 34 STC 4 and applying common parlance test held that rexine coated cotton fabric, the finished product in that case, could not be regarded as "textile" even though its base was cotton cloth because cotton lost all its identity and the finished product became totally a different product and could not ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... is included." It will be noticed that the provisions considered by the Supreme Court in that case are similar to the provisions we are considering in the present case. The said observations of the Supreme Court equally apply to the expression "cotton fabrics" in item No. 19 of the First Schedule to the Central Excises Act. We do not find any substance in the contention of the learned Government Pleader that "tarpaulin" dealt with by the assessee is different from "cotton canvas" inasmuch as the ends were stitched and eyes were provided for and therefore is not a "cotton fabric" even though "cotton canvas" it may be. He relied on the decision of the Madras High Court in Jeewajee Co. v. State of Tamil Nadu [1974] 34 STC 4, that tarpaulin as a finished product was a different marketable commodity from processed canvas cloth and therefore could not be treated as "textile". We do not agree. The Supreme Court observed in Porritts Spencer (Asia) Ltd. v. State of Haryana [1978] 42 STC 433 in the following terms: "Moreover a textile need not be of any particular size or strength or weight. It may be in small pieces or in big rolls; it may be weak or strong, light or heavy, bleached ..... X X X X Extracts X X X X X X X X Extracts X X X X
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