POPULAR THREAD FACTORY Vs. COMMERCIAL TAX OFFICER

JUDGEMENT

(1.) Despite the law having been declared by this Court in more than one decision that sewing thread is cotton yarn ; that it does not lose its character as such yarn by reason of the use to which it is put and that it is taxable as declared goods at single point and not multi point as general goods, the State has nevertheless sought to tax sewing thread not as declared goods but as general goods, under the Tamil Nadu General Sales Tax Act, 1959.

(2.) The decisions of this Court are to be found in State of Tamil Nadu v. R.V. Krishniah Chetty and Sons [1994] 92 STC 262 and State of Tamil Nadu v. R.V. Krishniah Chetty and Sons [1990] 78 STC 422. Both these decisions were rendered by a Bench comprising of Mr. Justice Venkataswami and Mr. Justice Raju (as they then were). The Government was very much a party to those judgments. We are informed that those judgments have become final, no appeal having been preferred against the same. The Tribunal in this case has chosen to ignore those judgments and has held that the sewing thread sold by the assessee is liable to tax under entry 141 in the First Schedule does not enjoy the protection of being declared goods. The Tribunal has also held that the sewing thread sold by the assessee is not cotton yarn. We find it difficult to approve the view taken by the Tribunal, which has failed to take note of and apply the law declared by this Court to whose judicial supervision the Tribunal is subject.

(3.) The activity of the assessee, as accepted by the Revenue is only to purchase the cotton yarn. It does not do anything more in relation thereto thereafter, except to dye it, put it into spools and sell it under its own name as sewing thread.