NARASIMHA AGENCIES Vs. STATE OF TAMILNADU

JUDGEMENT

(1.) IN this tax revision case filed against the order of the tribunal, dt. 19th October, 1973 made in App. 142 and 540 of 1973, the question raised is whether the collar stiffening materials are liable to exemption from levy of multi-point tax. The assessee is a dealer in cotton cloth, yarn and tailoring materials. The collar stiffening material which is the subject-matter of the dispute consists of a rather oblong shape piece of cotton material which is described as buckram cloth about 41 cm. Long and 11 cm. Broad on which is bonded a spread-out cotton collar. The cotton collar was treated with some special kind of adhesive and placed on the oblong buckram cloth with the specially treated surface resting on the buckram cloth and by some heat process applied to the collar, the collar is bonded on to the buckram cloth. The spread out collar has a lengthwise slit running in the middle. There are also eyelets at either end of the collar. This material is sold by the dealer to the tailors. The tailors cut out the pieces of oblong buckram cloth projecting beyond the edges of the collars bonded on the buckram cloth. The edges of the collar are also stitched. The buckram cloth with the collar bonded on it buckram cloth with the collar bonded on it is folded along the slit in the middle of the collar. When this is done, the folded buckram cloth and the collar bonded on it take the appearance of a regular folded collar which is then stuffed as inner lining for collars of shirts which are stitched by tailors. The linings so used help to keep the collars stiff and these collar stiffening materials are used in the manufacture of readymade shirts like liberty shirts. These materials are sold in pieces of dozens to the manufacturers of readymade shirts as shown by the carbon copy of the bills produced by the assessee before the sales tax authorities.

(2.) THE assessee claimed that these materials come within the scope of item 4 of the third Schedule. THE items described in the third schedule are exempt from tax under S. 8 of the Tamilnadu General ST Act, (item 4 of the third Schedule runs as follows - "all varieties of textiles (other than durries, carpets, druggist and pure silk cloth) made wholly or partly of cotton, staple fible, rayon, artificial silk or wool including hand-kerchiefs, towels, napkins, dusters, cotton velvets and velvteen, tapes, niwars and laces and hosiery cloth in lengths. Alternatively the assessee claimed exemption on the ground that those ar declared goods under S. 14 of the Central ST Act. THE entry in s. 14 of the Central ST Act runs as follows : 14 (ii-a) : Cotton fabrics, as defined in Item No. 19 of the First Schedule to the Central Excise and Salt Act, 1944. " * Item No. 19 of the First Schedule to the Central Excise and Salt Act, 1944, to the extent runs as follows - "cotton'fabrics'means all varieties of fabrics manufactured eithe wholly or partly from cotton and includes dhoties, sarees, chadders, bedsheets, bed speads, counterpanes, table clothes, empbrioedery in the price, in strips or in motifs and fabrics impregnated or coated with preparations of cellulose derivatives or of other artificial palstic materials, but does not include any such fabric if it contains - (i) 40 per cent or more by weight of silk; (i) 40 per cent or more by weight of rayon or artificial silk; or (iii) 60 per cent or more by weight of rayon or artificial silk; or (iv) 50 per cent or more by weight of jute (including bimplipa tam Jute or mests fibre);