SARAVANAN REXINE Vs. UNION TERRITORY OF PONDICHERRY

JUDGEMENT

(1.) THE assessees' tax revision case is laid under section 42 of the Pondicherry General Sales Tax Act, 1967 (hereinafter referred to as the Act), and coming up for admission.

(2.) THE problem posed is whether the final product, rexine-coated cotton fabric is a textile within the meaning of entry 31 of the Third Schedule in the said Act. The facts are in a narrow compass. The assessees are dealers in rexine cloth at 10, Leports Street, Pondicherry. For the assessment year 1979-80, they were assessed by the Joint Commercial Tax Officer for a total and taxable turnover of Rs. 1, 61, 687.44 and Rs. 22, 448.34 respectively. The assessees claimed exemption on the ground that the rexine-coated cotton fabrics come under "textiles" as defined in item 31 referred to supra. The said exemption claimed by the assessees found favour with the Deputy Commercial Tax Officer. However, the Deputy Commissioner in exercise of his power under section 35 of the said Act suo motu called for and and examined the order passed by the Deputy Commercial Tax Officer and as, in his view, the finished product would not come under item 31, he caused a notice to be issued to the assessees of his proposal to revise and modify the assessment.

(3.) THE assessees filed their written objection and also requested a personal hearing. In such inquiry, the Deputy Commissioner following a judgment of this Court in State of Tamil Nadu v. East India Rubber Works, Madras held that the finished product will not come within the ambit of item 31 in the Third Schedule and therefore, made the assessment as follows : Turnover of rubber sheets, foam leather boards and adhesives, wire springs, etc., taxable at 3 per cent Rs. 22, 448.34Turnover of coated cotton fabric taxable at 3 per cent M.P. Rs. 1, 39, 239.10 Total and taxable turnover proposed Rs. 1, 61, 687.44 The assessees' appeal to the one-man Sales Tax Appellate Tribunal was unsuccessful, because the said Tribunal also followed the decision of this Court referred to supra. It is seen that the finished product under consideration is made up of two elements, viz., a cotton cloth which is textile and a solidified paste.