(1.) THIS tax revision case is preferred by the State questioning the decision of the Sales Tax Appellate Tribunal in T. A. No. 829 of 1988 dated October 30, 1989, holding that the turnover relating to tarpaulins was not liable to be taxed and allowing the appeal of the assessee (respondent herein ). The question that arises for decision in this tax revision case is whether "cotton canvas" or "tarpaulin" which is waterproof cloth with the base as cloth sold by the assessee falls under "cotton fabrics" in item No. 5 of the Fourth Schedule to the Andhra Pradesh General Sales Tax Act, 1957 ("the Act" for short) and therefore exempt from tax under section 8 of the Act. The relevant assessment year is 1983-84.
(2.) THE Commercial Tax Officer, Tadipathri, assessed to tax the turnover of Rs. 15,54,958. 38 relating to the sales of tarpaulin effected by the assessee treating it as multi-point taxable goods. In the appeal preferred by the assessee, the Appellate Deputy Commissioner, Commercial Taxes, Kurnool, held that though the expression "cotton fabrics" in item No. 5 of the Fourth Schedule to the Act may include "tarpaulin cloth" in rolls, it did not include tarpaulin which was a finished product, and that finished tarpaulin was entirely a different product and in that view rejected the contention on behalf of the assessee that even though there was some work done on the processed canvas cloth, the cost of the work, namely, stitching the ends and eyeletting, would be very negligible and that, therefore it should be considered that tarpaulin was only processed canvas cloth. On further appeal, as already stated above, the Tribunal upheld the contention of the assessee and held that the turnover of tarpaulin sales was not assessable to tax and allowed the appeal of the assessee relying on the decisions of Karnataka High Court in Bharat Textile and Proofing Industries v. Slate of Karnataka [1988] 71 STC 10 and of this Court in State of A. P. v. Goodyear India Ltd. [1989] 74 STC 47.
(3.) ON the other hand, the learned counsel for the assessee relies on the decisions of the Gujarat High Court in Pokardas and Brothers v. State of Gujarat [1982] 51 STC 88 and of the Karnataka High Court in Bharat Textile and Proofing Industries v. State of Karnataka [1988] 71 STC 10, as directly covering the question at issue. He also relies on the decision of this Court in State of A. P. v. Goodyear India Ltd, [1989] 74 STC 47, wherein also the expression "cotton fabrics" occurring in item No. 5 of the Fourth Schedule to the Act is considered and it is held that the said expression includes cotton fabrics subjected to the process of rubberising. He further contends that there is no difference between "cotton canvas" and "tarpaulin" and that cotton canvas does not undergo any change when it is cut to size with ends stitched and eyes made for tying it into position. In order to appreciate the rival arguments, it is necessary to refer to the said item No. 5 as it was during the relevant period. It reads as follows :