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The Government of Andhra Pradesh Vs. Pachipulsu Venkata Subba Rao and ors. - Court Judgment

LegalCrystal Citation
SubjectSales Tax
CourtAndhra Pradesh High Court
Decided On
Case NumberTax Revision Case Nos. 20, 23 and 24 of 1959
Judge
Reported in[1960]11STC561(AP)
AppellantThe Government of Andhra Pradesh
RespondentPachipulsu Venkata Subba Rao and ors.
Appellant AdvocateThe Second Government Pleader
Respondent AdvocateN. Ram Mohan Rao, ;C. Mallikarjuna Rao and ;K. Venkataramayya, Advs.
Excerpt:
- - the appeal of the assessee to the deputy commissioner of commercial taxes proved unsuccessful. 24 of 1959 is concerned, sri venkataramayya learned counsellor the respondents, urges that the case of his clients was that a good part of the cloth sold by them was less than......it as sarees, lihafs, fards, bed-covers etc. a bench of the allahabed high court ruled that the word 'cloth' was to be distinguished from 'cloths' or garments and that what was exempted under the notification was cloth and not cloths. the learned judges added that what the applicant did was to take handloom cloth and either cut it into specific sizes or to have them manufactured into specific sizes, so that the pieces could be used as sarees, bed-covers, lihafs etc. and then to print them so that they could be readily used for the purpose for which they were meant and that the articles in which the applicant dealt were cloths or garments and not 'cloth'. the principle laid down by the learned judges lends some support to the theory propounded by the learned counsel for the assessee......
Judgment:

Chandra Reddy, C.J.

1. These three revision petitions raise a common question as to the meaning of the word 'cloth' used in the Madras General Sales Tax Act, 1939 and the Hyderabad General Sales Tax Act, 1950. T.R.C. No. 20 of 1959 deals with the former Act while the other two revisions deal with the latter Act.

2. T.R.C. No. 20 of 1959.-The respondents, a firm of merchants, are deaisrs in cloth. They sold fine and superfine printed sarees during the year 1956-57 and the turnover amounted to Rs. 25,949-11-0 in this behalf. The Deputy Commercial Tax Officer, Vijayawada, treating the sales as falling under item 1 of Sub-section (2-A) of Section 3 of the. Madras General Sales Tax Act, imposed sales tax at the rate of one anna six pies for every rupee of the turnover. The appeal of the assessee to the Deputy Commissioner of Commercial Taxes proved unsuccessful. The assessee went in further appeal to the Sales Tax Appellate Tribunal. The Tribunal accepted the contention of the assessee that sarees and dhoties would not embrace the definition contained in item i of Section 3(2-A) of the Madras General Sales Tax Act and allowed the appeal.

3. The Department seeks to revise this order under Section 22(1) of the Act and Rule 40 of the Rules. It is contended on behalf of the petitioner that the distinction made by the Sales Tax Appellate Tribunal between cloth and articles of clothing covering sarees and dhoties is not borne out by the language of item 1 and that the word 'cotton cloth is a generic term comprehending dhothies, sarees and other cloth. On the other hand, the stand taken by the assessee is that the expression 'cloth' is confined to fabric that is sold by yard and cannot extend to the fabric that is sold as a unit and that any material that is used for a specific purpose cannot be described as cloth.

4. Support is sought for this proposition in Firm Jaswant Rai Jai Narain v. Sales Tax Officer [1955] (6 S.T.C. 386.) The question there was whether a dealer in printed cloth, both handloom and mill-made, was entitled to the benefit of a notification which exempted the sale of cloth manufactured on handlooms with artificial silk, linen, flax and cotton or wool from sales tax. The dealer took handloom and mill-made cloth and then printed it and sold it as sarees, lihafs, fards, bed-covers etc. A Bench of the Allahabed High Court ruled that the word 'cloth' was to be distinguished from 'cloths' or garments and that what was exempted under the notification was cloth and not cloths. The learned Judges added that what the applicant did was to take handloom cloth and either cut it into specific sizes or to have them manufactured into specific sizes, so that the pieces could be used as sarees, bed-covers, lihafs etc. and then to print them so that they could be readily used for the purpose for which they were meant and that the articles in which the applicant dealt were cloths or garments and not 'cloth'. The principle laid down by the learned Judges lends some support to the theory propounded by the learned counsel for the assessee. With great respect to the learned Judges, we are unable to subscribe to the pro-position so broadly stated. In our opinion, 'cotton cloth' is comprehensive enough to take in sarees or dhoties. We feel that the legislature has used it in a general sense. In common parlance, the word 'cloth'is used to denote every fabric used for any purpose including the use as a wearing apparel. The word ought to be understood in the widest sense and not in a narrow sense. Courts should adopt the meaning of a word which harmonises with the context and advances the policy of the Act. There is no obstacle here in giving the fullest meaning, especially when it carries out the object of the Act. If we interpret the word in a narrow and restricted sense as invited by the learned counsel for the respondents, it would be practically rendering item I otiose. It would exclude from its purview, if this test is applied, towels, bed-sheets, table-cloth, curtain cloth, napkins and cloth used for every purpose sold as a, unit. We do not think that such an intention could be attributed to the legislature. That will be practically reducing item i to a dead letter.

5. This view of ours accords with the meaning given by various dictionaries to the word 'cloth'. Almost every dictionary that we have consulted shows that this word is used in a general sense. We will first refer to the Oxford English Dictionary, Volume II. The following meanings are given :

A piece of pliable woven or felted, stuff, suitable for wrapping or winding round, spreading or folding over, drying, wiping or other purpose; a swaddling or winding cloth, wrap, covering, veil, curtain, handkerchief, towel etc.

A name given, in the most general sense, to every pliant fabric woven, felted, or otherwise formed of any animal or vegetable (or even mineral) filament, as of wool, hair, silk, the fibres of hemp, flax, cotton, asbestos, spun glass, wire, etc. But when used without qualification or contextual specification, usually understood to mean a woollen fabric such as is used for wearing apparel'. 'A wearing apparel.

6. In Webster's New International Dictionary, the following meanings are given :-

A pliable fabric woven, felted or knitted from any filament; commonly, fabric of woven cotton, silk'. 'The dress; raiment; also, a garment'. 'A piece of fabric of definite quantity'. 'The canvas for a painting'. 'Livery'; 'uniform.

7. In the Chamber's Twentieth Century Dictionary, the following meanings are given :

Woven material from which garments or coverings are made : a piece of this material: clothing : the usual dress of a trade or profession.

8. It is thus seen that any fabric or material used for garments or wearing apparel falls within the definition of cloth. The judgment of Subba Rao, C.J., (as he then was) and Viswanatha Sastry, J., in Kosuri Subba Raju v. The State of Andhra [1956] 7 S.T.C. 479 does not render any assistance to the respondents. There, the question was whether nawar tape was included in the term 'cloth' and the Bench answered it in the negative. It was pointed out by Subba Rao, C.J., that 'cloth' designates the fabric used for garments, coverings and such other purposes. The learned Chief Justice also observed that 'cloth' was used in a wider sense and also in a narrower sense, that in a wider sense it might take in every fabric woven of yarn or other material and that in a narrow sense it connoted a woven material used for garments or clothing. In our opinion, this statement of law in a way supports the view we have taken.

9. The very passage in Bindra's Interpretation of Statutes occurring at page 78 cited by' Sri Ram Mohan Rao furnishes an answer to his contention. The learned author refers to the rule stated by Crawford in his Interpretation of Statutes in these words :-

It is also a basic rule of construction that general words should be given a general construction, that is, they should be given their full and natural meaning, unless the statute in some manner reveals that the legislative intent was otherwise. Such a contrary intent may be found in the purpose and subject-matter For example, a statute which provides for the taxation of all property of a certain kind, means all of such property that is within the judiction of taxing power.Nevertheless the general rule may be announced that in the construction of statutes, general words are to be considered more broadly than specific words and specific words more narrowly than general words.

10. Indisputably, the word 'cloth' is used in a general sense and, therefore, it has to be construed broadly.

11. 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 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.

12. For these reasons, we allow the revision case of the Department with costs.

13. T.R.C. Nos. 23 and 24 of 1959.-The principle enunciated in T.R.G No. 20 of 1959 covers these revisions also. Section 6, Clause (v), of the Hyderabad General Sales Tax Act, 1950, is analogous to item 1 of Section 3 (2-A) of the Madras General Sales Tax Act, 1939, though the rate under the former Act is less than that under the latter Act. Clause (v) reads :

So much of the turnover as is attributable to transactions in all cotton cloth made in mills or woven on power-looms-other than coarse and medium cloth costing less than Rs. 2-8-0 per yard-shall be taxed at six pies in the rupee at the first point of sale and at three pies at subsequent points.

14. Here also the expression used is 'cotton cloth' and there is no reason why it should be interpreted differently from that of item 1 of Section 3(2-A) of the Madras General Sales Tax Act. Sri Venkataramayya, counsel for the respondents in T.R.C. No. 24 of 1959, invites our attention to certain notifications issued by the erstwhile Government of the Hyderabad State exempting from the payment of sales tax handloom dhoties and handloom sarees costing less than Rs. 3 per yard, to substantiate his contention that the word 'cloth' does not take in sarees. The notification runs thus :

In exercise of the powers conferred by Section 7 of the Hyderabad General Sales Tax Act, 1950 (XIV of 1950) and in supersession of the Finance Department Notification No. 146/280/55-56/Tax, dated 12th March, 1956, (page 441, Part I-D, dated March 22, 1956), the Rajpramuk.h hereby exempts with effect from the first day of April, 1956, the following goods from the payment of sales tax : Handloom dhoties and handloom sarees costing less than Rs. 3 per yard.

15. We do not think that this notification throws much light on the construction of Clause (v) of Section 6 of the Hyderabad General Sales Tax Act. We cannot also overlook the fact that on the same day another notification was issued exempting lungies, rumals, towels, bedsheets and table cloth made on handlooms and not stitched and costing Rs. 4 or less per piece. These two notifications between themselves practically exhaust all the varieties of handloom cloth. If all these types of handloom cloth were excluded from the definition of 'cloth', we do not know what remains of the content of 'cloth '. We think that these notifications were issued more by way of clarification. Further, Section 6 cannot be construed with reference to the notifications issued under Section 7 of the Act. In our opinion, the disputed turnover in these cases, which covers sales of sarees, falls within the mischief of Clause (v) of Section 6 of the Hyderabad General Sales Tax Act. T.R.C. No. 23 of 1959 is therefore allowed. There will be no order as to costs.

16. So far as T.R.C. No. 24 of 1959 is concerned, Sri Venkataramayya learned counsellor the respondents, urges that the case of his clients was that a good part of the cloth sold by them was less than. 2-8-0 per yard and as such part of the turnover has to be excluded from the purview of Clause (v) of Section 6. Since this matter has not been investigated by the Tribunal, it has to go back to the Tribunal. If the Tribunal feels that the matter should be investigated into by the Department, it could send the matter to the assessing authority. There will be no order as to costs in T.R.C. No. 24 of 1959.

17. These Tax Revision Cases having been set down for being mentioned on this day, the Court made the following order:

18. No costs in T.R.C. Nos. 23 and 24 of 1959. In T.R.C. No. 20 of 1959 the advocate's fee is fixed at Rs. 100.


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