COMMERCIAL TAXES OFFICER PALI Vs. SAKARIYA TEXTILES

JUDGEMENT

(1.) THESE are four connected references and in view of section 13 (11) of the Rajasthan Sales Tax (Amendment) Act, 1984, these references are now to be treated, heard and decided as revisions under section 15 of the Rajasthan Sales Tax Act, 1954, as substituted by the Amendment Act.

(2.) IN these references, the Board of Revenue for Rajasthan, Ajmer, has referred the following common questions of law to this Court for its opinion : " (1) Whether, on the facts and in the circumstances of the case, the Board of Revenue is justified in holding that pachrangi dori is a commodity falling within the purview of section 14 of the Central Sales Tax Act ? (2) Whether, on the facts and in the circumstances of the case, pachrangi dori would be taxable at 2 per cent during the relevant periods as declared goods under section 14 of the Central Sales Tax Act read with section 15 or at the general rate of 7 per cent for unclassified goods ?"

(3.) THE contention of Mr. Bhandari, the learned counsel for the revenue, is that pachrangi dori should not be treated and taken as cotton fabrics or cotton yarn but should be taken to be a commodity altogether of new commercial connotation susceptible to tax at the residuary rate of 7 per cent. It was argued that, no doubt, pachrangi dori is made from cotton yarn, but the cotton yarn is consumed by the new product (pachrangi dori ). As such, the cotton yarn loses its identity and pachrangi dori becomes altogether a new commercial product. Reliance in support of the contention was placed on Mohta Trading Company v. Commissioner of Sales Tax [1976] 38 STC 11, M. M. Pillai v. State of Tamil Nadu [1977] 39 STC 359 and Deputy Commissioner v. A. K. K. Sons [1976] 37 STC 227. Combating the contentions of Mr. Bhandari, it was argued by Mr. Mehta, the learned counsel for the assessee, that pachrangi dori is nothing but a bunch of some cotton threads of five colours. THE word "fabrics" is of wide importance and includes a cord within its ambit. Pachrangi dori should, therefore, be taken to be the cotton fabrics. Alternatively, it was argued that pachrangi dori is a very thin cord consisting of some stands of cotton threads. THE cotton thread is a process from cotton yarn. Simply because some cotton threads of different colours are twisted, intertwined and braided, it cannot be said that a new commercial product has come into existence. THE cotton yarn does not lose its identity in such a case. Pachrangi dori should, therefore, be treated to be the cotton yarn. If it is taken to be cotton yarn, the rate of tax would be 2 per cent. Reliance in support of the contention was placed on numerous authorities to which we will make reference at the appropriate stage.