G.G. Sohani, J.
1. By this reference under Section 44(1) of the M. P. General Sales Tax Act, 1958, hereinafter called the Act, the Board of Revenue has referred the following question of law to this Court for its opinion :
Whether, under the facts and circumstances of the case, cotton hose was cloth and as such exempt from tax as per entry No. 6 of Schedule I ?
2. The material facts giving rise to this reference briefly are as follows : For the year 1967-68, the assessing authority determined the gross turnover of the assessee at Rs. 4,24,792. The assessee claimed deduction on the sale of cotton hose worth Rs. 40,621. The contention advanced on behalf of the assessee before the assessing authority was that cotton hose was 'cloth' manufactured by cotton textile mills and hence it was tax-free. This contention was not upheld by the assessing authority. The appeal preferred by the assessee was also dismissed. In the second appeal preferred before the Board, the assessee reiterated his contention that cotton hose was exempt from tax as cloth-vide entry No. 6 of Schedule I to the Act. This contention was, however, rejected by the Board, and hence at the instance of the assessee 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 cotton hose is covered by the expression 'cloth' occurring in entry No. 6 of Schedule I to the Act. It was urged on behalf of the assessee that the process of manufacture of cotton hose is that thick cotton yarn is woven by circular weaving machines. It was, however, not disputed that the cotton yarn so woven is cut into different sizes before it is made a marketable commodity as cotton hose. It is thus clear that cotton hose does not continue to retain its initial identity as cloth manufactured in mills. The term 'cloth' in accordance with its dictionary meaning and in its ordinary popular meaning has to be understood as any woven fabric or stuff till it is transformed into ready use as a different article and, after such transformation, that article cannot be said to retain its previous state of cloth though it is made of cloth.
4. In our opinion, therefore, the Board was right in holding, on the facts and in the circumstances of the case, that cotton hose was not cloth and, as such, not exempt from tax as per entry No. 6 of Schedule I to the Act. Reference is, therefore, answered against the assessee and in favour of the department. Parties to bear their own costs.