(1) This order will dispose of Sales-Tax References Nos. 1, 2 and 3, 1976 as they arise out of a consolidated order of the Additional District Judge and a common question of law has been referred for opinion of this Court. The assessment years, in question, are 1957-58, 1958-59 and 1959-60.
(2) The petitioner-firm was registered with the Sales-Tax Department under the Bengal Finance (Sales-Tax) Act. 1941 (hereinafter called 'the Act') as applicable to the Union Territory of Delhi. The petitioner surrendered its certificate for cancellation of the same on the plea that the goods dealt in by it were exempt from sales tax w.e.f. 14-12-1957 under Entry No. 17 of the 2nd Schedule referred to in section 6 of the Act. On inquiries it was found that the petitioner was dealing in pure silk fabrics also and as such this plea of the petitioner .for cancellation of the registration certificate did not find favor with the assessing authority. The said assessing authority by order dated 2-8-1960 found that the petitioner was liable to pay sales tax in respect of turnover of sale of pure silk sarees which were not exempt from sales-tax under Entry No. 17.
(3) Dissatisfied with the aforesaid order of the assessing authority the petitioner went up in revision. In revision it was contended that the petitioner was dealing in art silk and fabrics admixed with zari and meena which could not be treated as pure silk fabrics. The contention of the petitioner was not accepted and the revision petition was dismissed by the Commissioner by his order dated 10-3-1961. The petitioner filed a further revision before the Additional District Judge which also resulted in dismissal by order dated 7-6-1967.
(4) The petitioner thereafter moved an application u/s. 21(1) of the Act to the Lieutenant Governor, Delhi for making a reference to this Court on the question of law mentioned in the applicalion. The Lieutenant Governor, however dismissed the application on the ground that the question of fact and not of law and as such could not be referred. The petitioner moved this Court under section 21(2) of the Act for directing the Lieutenant Governor to refer the said question of law to this Court. The petition was accepted a'nd this Court directed the Lieutenant Governor to refer the following question of law for the opinion of this Court :
'WHETHERon the facts and circumstances of the case, the alleged disputed items in which the petitioner-firm was dealing can be termed as real silk fabrics inasmuch as the fabrics were admixed and woven during the process 634 of weaving with art silk and other material like meena work and zari thread etc.?'
Accordingly the aforesaid question of law has been referred to this Court, for opinion, by the Appellate Tribunal, Sales-Tax, Delhi.
(5) The only question which arises for our consideration is whether the Commissioner and the learned Additional District Judge were right in holding that the sarees manufactured by the petitioner did fall within the definition of pure silk fabrics and in terms of language used in Entry No. 17 the same were liable to salestax. Entry No. 17 of the 2nd Schedule at the relevant time was, as follows :
'ENTRY17.- All varieties of cotton, woollen, rayon or artificial silk fabrics, but not including real silk fabrics.'
The Commissioner and the learned Additional District Judge relying on the statement of a partner of the petitioner-firm came to the conclusion that the mere fact that the sarees were embroidered either with artificial yarn or gold or silver thread do not change their intrinsic characteristics of the pure silk sarees. The statement of the partner relied upon by the said authorities, was to the following effect :
'THEfirm is dealing exclusively in sarees made of nylon, art-silk and also sarees made of pure silk, but embroidered........ similarly, single pieced from which salwar and kameez etc. are made according to the pattern made on the piece are also embroidered if made of pure silk............Blouse pieces made of pure silk in which We are dealing are also embroidered.'
It was contended by the learned counsel for the petitioner that the petitioner-firm was dealing in Banarasi sarees which contain besides pure silk, art-silk, zari and meena and thereforee they do not fall within the definition of pure silk fabrics and in terms of the language used in Entry 17 it should have been held that no sales tax was payable in respect thereof. Reliance, for this contention, was placed on the case of Dr. Arasappa v. Commissioner of Commercial Taxes, Mysore, 1969 (23) S.T.C. 68 decided by the Mysore High Court. It was held in that case that sarees manufactured by the employment of pure silk yarn along with artificial silk yam are 'not 'pure silk' textiles and are thereforee entitled to the exemption under item 8A of the Fifth Schedule to the Mysore Sales-tax Act, 1957. But this case can be of no assistance to the petitioner because it was found as a fact that the sarees manufactured were woven partly with pure silk, partly with art-silk and with cotton lace. In the present case before us, there is no such finding and on the other hand the definite findings recorded by the Commissioner and the Addl. District Judge are to the effect that the sarees manufactured by the petitioner are of pure silk fabric. It was contended that the authorities should not have relied on the statement of the partner of the firm who was a non-technical partner and had made an erroneous statement. The same contention was raised before the learned District Judge who found as a fact that the statement made by the partner was not erroneous and the petitioner-firm was trying to change the stand at a later stage. The findings. recorded by the Additional District Judge, are pure findings of fact and are not liable to be disturbed in these proceedings.
(6) We entirely agree with the conclusions arrived at by the learned District Judge that the sarees embroidered with zari and meena would not change the nature of the fabric which would remain a pure silk.
(7) For the reasons recorded above, we answer the question referred, in the affirmative i.e. against the assessed and in favor of the Department. However, considering the facts of the case, we leave the parties to bear their own costs.