A-1 ENGINEERING CO Vs. STATE OF MAHARASHTRA

JUDGEMENT

(1.) THE common question, which arises for our determination in all these three references, is whether the goods sold by the applicants constituted "textile fabrics" within the meaning of entry 79 in schedule B of the Bombay Sales Tax Act, 1953. THE applicants, who are the holders of a registration certificate, import what is called "machine cloth" or "silk bolting cloth" and sell it. In the year 1954-55 they sold such cloth of the value of Rs. 72,959 and in the subsequent two years they sold cloth worth Rs. 1,04,212-4-0 and Rs. 73,306 respectively. THEse sales were taxed by the Sales Tax Officer under entry No. 79 of Schedule B of the Act. That entry is as follows :- ------------------------------------------------------------------------ "Serial Description of Rate of Rate of Rate of No. goods. Sales General Purchase Tax. Sales Tax. Tax. ------------------------------------------------------------------------ 79 Textile fabrics of any Eight naye Three naye Eight naye kind including saris, paise in paise in paise in dhoties, sheets, chaddars, the rupee. the rupee. the rupee." blankets and other similar articles [except (i) cloth woven on handlooms and (ii) coarse and medium cotton cloth woven in mills or on powerlooms] sold at a rate not less than Rs. 3 per yard. ------------------------------------------------------------------------

(2.) THE contention of the applicants before the Sales Tax Authorities was that the material, which they had sold did not fall under the said entry and could only be taxed under the residuary entry, which was entry No. 80. It was urged on their behalf that entry 79 was restricted to textile fabrics such as were enumerated in the said entry, viz., saris, dhoties, sheets, chaddars, blankets and other similar articles. THE goods sold by the applicants did not belong to this class of goods. THEy constituted an article, which was sold as a part of machinery. It was a special kind of cloth, which was used as a part of the machinery in the flour mills and for screen-printing processes in dye works, etc. It was pointed out on their behalf that under the Indian Customs Tariff, the article was treated as a component part of the machinery and not as a textile fabric. THE Sales Tax Authorities did not accept this contention urged on behalf of the applicants and held that the cloth, whatever its use may be, fell under "textile fabrics" and since textile fabrics of any kind was to be taxed under entry 79, the said entry was the proper entry for taxing the goods sold by the applicants.

(3.) MR. Mehta has also contended before us that in interpreting the expression "textile fabrics of any kind" used under entry 79, what we must consider is what would commonly be understood by the expression "textile fabrics". What is understood by the said expression, says MR. Mehta, is articles such as are mentioned in the inclusive part of other similar articles. Nobody would understand by the said expression, says he, a machine cloth of the kind that is sold by the applicants. He has in support of his submission placed reliance on the decision of the Supreme Court in Ramavatar Budhaiprasad v. Assistant Sales Tax Officer, Akola and Another ([1961] 12 S.T.C. 286), where their Lordships in considering the question as to whether betel leaves could be said to fall within the entry "vegetables" observed : "The word 'vegetables' in item 6 of Schedule II of the C.P. and Berar Sales Tax Act, 1947, must be construed not in any technical sense nor from the botanical point of view but as understood in common parlance." MR. Mehta's argument is that "textile fabrics" as understood in common parlance would not mean a machine cloth or silk bolting cloth, which the applicants have sold in the present case.