COMMISSIONER OF SALES TAX Vs. NATHANI BROTHERS

JUDGEMENT

(1.) THE order in this case will also govern the disposal of Miscellaneous Civil Case No. 334 of 1984, as the following common question of law has been referred to this Court for its. opinion, by the Board of Revenue under Section 44 (1) of the M. P. General Sales Tax Act, 1958 (hereinafter referred to as "the Act") :

(2.) THE material facts giving rise to these references, briefly are as follows: The assessee was assessed to tax under the Act for the period from 1st July, 1975 to 30th June, 1976. The contention advanced on behalf of the assessee before the assessing authority was that "hair belting" was covered by entry No. 6 of Schedule I appended to the Act. This contention was not upheld by the assessing authority. An appeal preferred by the assessee against that order was dismissed. In the second appeal preferred by the assessee the Tribunal held that hair belting was covered by the term "cloth" occurring in entry No. 6 of Schedule I appended to the Act. The Tribunal, therefore, upheld the contention of the assessee. Aggrieved by the order passed by the Tribunal, the Revenue sought a reference and it is at the instance of the Revenue that the aforesaid question of law has been referred to this Court for its opinion.

(3.) THE short question for consideration in this case is whether hair belting is covered by the term "cloth" as used in entry No. 6 of Schedule I appended to the Act. The Tribunal has found that hair beltings are woven fabrics and its composition is 72. 30 per cent cotton, 12. 70 per cent bitumen and 15 per cent wool. Entry No. 6 of Schedule I came up for consideration before the Supreme Court in Filterco v. Commissioner of Sales Tax, Madhya Pradesh [1986] 2 SCC 103. In that case, the question for consideration no doubt was whether the compressed woollen felts could be said to constitute "cloth" as to fall within the scope of entry No. 6 of Schedule I to the Act. But the decision of the Supreme Court as to what would constitute "cloth" as understood in entry No. 6 is instructive. The Supreme Court observed as follows : Going by the meaning given in dictionaries as well as by its generally accepted popular connotation 'cloth' is woven, knitted or felted material which is pliable and is capable of being wrapped, folded or wound around. It need not necessarily be material suitable for making garments because there can be 'cloth' suitable only for industrial purpose; but nevertheless it must possess the basic feature of pliability. Hard and thick material which cannot be wrapped or wound around cannot be regarded as 'cloth'. Hair belting is a woven fabric and it is not disputed that it can be wound round. It is "cloth" suitable for industrial purposes only. The Tribunal, in our opinion, was right in holding that the product in question was covered under entry No. 6 of Schedule I of the Act.