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Raisaheb Chedra Durvasulu Vs. Sales Tax Officer and ors. - Court Judgment

LegalCrystal Citation
Subject Sales Tax
CourtAndhra Pradesh High Court
Decided On
Case Number Writ Petitions Nos. 1111 and 1113 of 1956
Judge
Reported in[1961]12STC158(AP)
AppellantRaisaheb Chedra Durvasulu
RespondentSales Tax Officer and ors.
Appellant Advocate C. Mallikharjuna Rao, Adv.
Respondent Advocate The Third Government Pleader, for Respondents 1 to 4
Excerpt:
- - all these contentions were negatived by the deputy commissioner, appellate, sales tax, and eventually by the sales tax appellate tribunal as well. if these conditions are satisfied, the case is within item 22. it is not all handloom cloth but only such cloth costing less than rs......and 36 of 1956.2. the petitioner in both the cases is a dealer within the meaning of the hyderabad general sales tax act, 1950. by separate orders for the assessment years 1952-53 and 1953-54 he was assessed to tax on a turnover which inter alia included the turnover representing the .sales of handloom cotton lungies, roomals, sarees, and sheilas. the petitioner challenged these assessment orders on the ground that handloom cloth could not be brought to tax firstly, because, that having been declared as an essential commodity by the essential gooods (declaration and regulation of tax on sale or purchase) act (act lii of 1952) any such tax could be imposed only with the assent of the president. secondly, the exemption from tax which enures for the benefit of dealers being granted through.....
Judgment:

Kumarayya, J.

1. These are two petitions for issue of writs of certiorari for quashing the orders of the Sales Tax Appellate Tribunal made in T. A. Nos. 28 and 36 of 1956.

2. The petitioner in both the cases is a dealer within the meaning of the Hyderabad General Sales Tax Act, 1950. By separate orders for the assessment years 1952-53 and 1953-54 he was assessed to tax on a turnover which inter alia included the turnover representing the .sales of handloom cotton lungies, roomals, sarees, and sheilas. The petitioner challenged these assessment orders on the ground that handloom cloth could not be brought to tax firstly, because, that having been declared as an essential commodity by the Essential Gooods (Declaration and Regulation of Tax on Sale or Purchase) Act (Act LII of 1952) any such tax could be imposed only with the assent of the President. Secondly, the exemption from tax which enures for the benefit of dealers being granted through Notification No. 101 dated 11th November, 1950, by the Government could not be taken back and Section 7 of the Hyderabad General Sales Tax Act, 1950, did not confer any such power. Thirdly, at any rate, the goods being within the meaning of item 22 of Schedule I of Hyderabad General Sales Tax Act, could not be validly brought to tax under the Act. All these contentions were negatived by the Deputy Commissioner, Appellate, Sales Tax, and eventually by the Sales Tax Appellate Tribunal as well. The petitioner has therefore come to this Court invoking the writ jurisdiction as no other remedy is available to him under the law.

3. The learned counsel, Mr. Mallikharjuna Rao, confined his arguments to the last-mentioned point and urged that the Sales Tax Authorities including the Appellate Tribunal were in error in holding that handloom cloth which is sold in units and not in yards was out of the purview of item 22 of Schedule I of the Hyderabad General Sales Tax Act. The learned counsel contends that this matter is covered by the authority of this Court in Government of Andhra Pradesh v. Pachipulsu Venkata Subba Rao and Ors. Decision dated 17th June, 1960, in T.R.Cs. Nos. 20, 23 and 24 of 1959. Since reported at [1960] 11 S.T.C. 561 wherein the ruling in Firm Jaswant Rai Jai Narain v. Sales Tax Officer [1955] 6 S.T.C. 386, which was followed by the Appellate Tribunal, has been dissented from and it was held that the expression 'cloth' embraces dhoties, sarees etc. On this basis it is urged that the order of the Tribunal should be quashed on the ground of error of law apparent on the face of the record. There is sufficient force in the argument advanced. In the T.R.Cs. cited, the question for consideration was whether sarees and dhoties fell within the meaning of item 1 of Section 3(2-A) of the Madras General Sales Tax Act. Item 1 was in the following words :

Cotton cloth which is other than woven on handlooms which is fine or superfine.

4. It was argued that the expression 'cloth' was confined to a fabric that is sold by yard and cannot extend to fabric that is sold as a unit and that any material that' is used for any specific purpose cannot be described as cloth. Support was sought in this behalf from the dictum in Firm Jaswant Rai Jai Narain v. Sales Tax Officer [1955] 6 S.T.C. 386. This Court did not agree with this argument. On a careful examination of the connotation of the word 'cloth', its dictionary meaning, the sense in which it is used in common parlance, the context in which it is used and the object and policy of the Act, it was observed that the word 'cloth' was used in the general sense denoting every fabric used for any purpose including the use as a wearing apparel, and this expression ought to be ordinarily understood in a wider sense and not in a narrow sense. The observations made are in the following words :-

We are of opinion that the word 'cloth' is of wide connotation embracing dhoties, sarees etc. We do not think that there is any warrant for limiting it to fabrics sold in yards. A 'cloth' does not cease to be 'cloth' merely because it is used as a dhoti or a saree. The use to which the sarees and dhoties are put falls within the scope of the expression 'for wrapping or winding round.' It is clear from the meanings given in the dictionaries that raiments and dress fall within the ambit of 'cloth'. It follows that sarees and dhoties of a superfine variety are attracted by the definition contained in item 1 of Section 3, Sub-section (2-A), of the Madras General Sales Tax Act.

5. It follows from the above observation that 'cloth' as understood in its ordinary sense takes in every fabric used for any purpose including the use as wearing apparel whether it is sold by unit or by yards. When the cloth has, in its generic sense, so wide a connotation, there is no reason why for purposes of item 22 it should be given a narrower meaning unless there are specific words of limitation therein or there is sufficient context to warrant the same. Item 22 reads thus: '

Handloom cloth other than that specified in item No. 15 costing less than Rs. 3 per yard.

6. Item 15 referred to therein reads thus:

Cotton cloth woven on handlooms exclusively out of handspun yarn and articles made of such cloth and sold by persons certified by All-India Spinners' Association and dealing exclusively in these commodities.

7. These two items are included in Schedule I which relates to exempted goods. It is therefore plain that handloom cloth of either description is exempt from assessment to sales tax. All that item 22 requires is that it should be handloom cloth, should be other than specified in item 15, which also is exempt from taxation, and should cost less than Rs. 3 per yard. If these conditions are satisfied, the case is within item 22. It is not all handloom cloth but only such cloth costing less than Rs. 3 per yard that is entitled to exemption. In other words, only cloth of inferior quality is intended to be exempted. The immunity being thus linked with the quality of the cloth itself, it cannot be affected by the method of its disposal. Even though it is sold in units, if its cost is less than Rs. 3 per yard, it comes within the exemption. Usually the cloth itself is made in some convenient units. These units are determined having regard to the use that the cloth may be put to. The cloth may be intended to be used for purposes of garments, such as shirts, suits, pyjamas or for sarees, dhoties, roomals etc. or for purposes of towels and napkins or for any other purpose. In each case the units must vary. Further they may be sold wholesale or in retail or even on unit basis. There is nothing in the provision which affects the exemption by reason of the mode of sale in which it is effected. Whether they are sold one way or the other, so long as it is handloom cloth and costs less than Rs. 3 per yard, it is within the letter and spirit of the provision. In this premisess, it is manifest that the Appellate Tribunal was in error in construing the provision in the manner it did. The error being of law apparent on the face of the record, the orders are liable to be quashed. The petitions are therefore allowed. The cases will now go back to the Appellate Tribunal for decision as to the rate at which the cloth was sold and for disposal of the appeals in accordance with law. No order as to costs.


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