METTA EMBO Vs. STATE OF GUJARAT

JUDGEMENT

(1.) THE Gujarat Sales Tax Tribunal has referred the following issue for our decision under section 69 (1) of the Gujarat Sales Tax Act, 1969 (hereinafter referred to as "the Sales Tax Act") : " Whether, on the facts and circumstances of the case, the Tribunal was right in holding that side-strips sold by the applicant were not covered by the scope of entry 21 of Schedule II, Part A, or entry 6 of Schedule II, Part A, to the Gujarat Sales Tax Act, 1969 ?" At the time of hearing of this matter, the learned advocate for the applicant as well as the learned Assistant Government Pleader agree that the aforesaid issue requires to be reframed because it is not the contention of the applicant that the product which is considered by the applicant as side strips would be covered by entry 6 of Schedule II, Part A. The contention is that the product "side strips" produced by the applicant would be covered by entry 21 of Schedule II, Part A, and not by residuary entry 13 of Schedule III. Hence, the question is reframed as under : " Whether, on the facts and in the circumstances of the case, the Tribunal was right in holding that side strips sold by the applicant were not covered by entry 21 of Schedule II, Part A, to the Gujarat Sales Tax Act, 1969 ?"

(2.) FOR deciding the aforesaid question, it would be necessary to refer to the facts as to how side strips are produced by the applicant. As such, side strips are not produced, but, admittedly, they emerge simultaneously with the production of metallic yarn from polyester sheets. The process of producing metallic yarn was witnessed by the Assistant Sales Tax Commissioner before deciding the appeal. He has noted that the metallic yarn is produced from a transparent glittering polyester film. Firstly, the film is put on rough slitting machine from which strips of the width of 64 mm. emerge. These strips are further placed on micro-slitting machine which cuts the strips into 214 pieces. These 214 pieces are known as metallic yarn. At that time both the sides of the strip are left out. These remaining strips are of uneven breadth and they are called side strips. The Tribunal has further noted on the information furnished that polyester yarn which is used for weaving clothes is produced by three methods of which the basic raw material is the same. The side raw material is in pulp form and is known as D. M. T. which is a petroleum product out of which all polyester is manufactured. From this, yarn is produced by using either of the three different processes, viz. , (i) fibre process, (ii) continuous filament process and (iii) metallic filament process. In the present case, the relevant process is metallic filament process. As per this process, pulp is spread like a sheet which is called polyester filament. This filament is given aluminium vapour on both the sides which gives it a glittering surface. After this, the film is put on rough slitting machine. Thereafter, the further process as noted by the Assistant Sales Tax Commissioner is followed. From the aforesaid process of manufacturing metallic yarn, it is clear that metallic yarn and side strips are produced out of the same substance which is known as polyester film. Firstly, the strips of width of 64 mm. from the polyester film are produced. Thereafter, the strips are placed on micro-slitting machine which cuts it into 214 pieces plus 2 side strips. The question is whether the said side strips would be covered by entry 21. In the background of the aforesaid facts, for deciding the question, we would first refer to entry 21 (as it stood at the relevant time) which is as under : Entry 21 in Schedule 11, Part A :

(3.) HOWEVER , the learned advocate for the applicant vehemently submitted that, considering the admitted facts on record, the Tribunal ought to have held that side strips produced by the applicant in this particular case are covered by the phrase "and all other synthetic fibres and synthetic yarns". He submitted that before the Assistant Sales Tax Commissioner it was pointed out that side strip is a yarn of 750 deniers and above. It is at the most a yarn of inferior quality, but at the same time it retains its quality as yarn.