STATE OF GUJARAT Vs. DILIPKUMAR KIRITKUMAR AND CO

JUDGEMENT

(1.) AT the instance of the revenue, this reference has been made to us under section 69 of the Gujarat Sales Tax Act, 1969. We will state a few facts which have led to this reference before we set out the question referred to us, so that the question can be appreciated in its proper perspective.

(2.) The opponent is a registered dealer under the Gujarat Sales Tax Act, 1969, and carrying on business in handloom, art-silk and silk jari saris as wholesaler and retailer. By bill No. 123 of 26th November, 1971, the assessee had sold two saris described as (i) Banarsi georgette sari for Rs. 300. 25 and (ii) Banarsi katarwa sari for Rs. 441. 87 (which are hereinafter referred to as "first sari" and "second sari" respectively for the sake of convenience ). The first sari is said to contain the following materials by weight : 37 per cent viscose rayon, 35 per cent metallic, and 28 per cent silk.

(3.) THE assessee had made an application before the Deputy Commissioner of Sales Tax under section 62 of the aforesaid Act for determining the rate of tax payable on the sales of the aforesaid two saris. THE assessee, in effect, contended that having regard to the weight of the different materials used in the saris, both the saris were not liable to tax as they fell within entries 40 and 37 respectively of Schedule I to the aforesaid Act, they being respectively rayon or artificial silk fabric and cotton fabric as defined in items 22 and 19 of the First Schedule to the Central Excises and Salt Act, 1944. THE Deputy Commissioner of Sales Tax was not impressed by this contention as he was of the opinion that on a true construction of the respective entries, namely, entries 40 and 37 of Schedule I to the Sales Tax Act, the basic materials, viz. , rayon or artificial silk under entry 40 and cotton under entry 37, should be between 40 per cent and 60 per cent and since the saris in question did not comply with this requirement of the said two entries, they would not be entitled to claim exemption from the liability of being subjected to sales tax under the aforesaid Act.