V.P. Gopalan Nambiyar, C.J.
1. These tax revision cases arise out of orders of rectification passed by the Deputy Commissioner of Sales Tax under Section 35 of the Sales Tax Act, holding that the exemption from sales tax granted in respect of dyed yarn was unjustified and that the turnover from the same must also be brought to account for the purpose of sales tax. This view of the Deputy Commissioner was upset on further appeal by the assessee to the Sales Tax Appellate Tribunal. The Tribunal took the view that cotton yarn dyed and coloured is nevertheless cotton yarn within the meaning of entry 4(ii) of the Second Schedule of the Kerala General Sales Tax Act, 1963 ; that no manufacturing process was involved in dyeing the yarn and that, as a result of dyeing, the yarn was not converted into a different article or commodity. In these circumstances, the Tribunal was of the view that the levy of sales tax was not attracted and that the Deputy Commissioner's order was unjustified and illegal. The Tribunal allowed the assessees' appeals in these three cases. The revisions have been preferred by the learned Government Pleader on behalf of the revenue.
2. Section 5 is the charging section under the Act. In so far as it is relevant, it provides:
5. Levy of tax on sale or purchase of goods.-(1) Every dealer (other than a casual trader or agent of a non-resident dealer) whose total turnover for a year is not less than (twenty-five thousand rupees) and every casual trader or agent of a non-resident dealer, whatever be his total turnover for the year, shall pay tax on his taxable turnover for that year,-
(i) in the case of goods specified in the First or Second Schedule, at the rates and only at the points specified against such goods in the said schedule; and
(ii) in the case of other goods, at the rate of four per cent at all points of sale.
(2) Every dealer other than a dealer referred to in Sub-section (1) whose total turnover for a year in respect of the goods specified in the First or Second Schedule is not less than two thousand five hundred rupees, shall pay tax at the rate and only at the point specified against the goods in the First or Second Schedule, as the case may be, on his taxable turnover in that year relating to such goods :
Provided that where a tax has been levied under Sub-section (1) or Sub-section (2) of this section or under Section 5A in respect of the sale or purchase of goods specified in the Second Schedule and such goods are sold in the course of inter-State trade or commerce, the tax so levied shall be refunded to such person in such manner and subject to such conditions as may be prescribed.
The relevant entry with which we are concerned is entry 4(ii) of the Second Schedule, which is as follows :
Sl. Description of the goods Point of levy Rate of
4(i) Cotton, that is to say, At the point of first sale 4 per
all kinds of cotton (in- in the State by a dealer cent.
digenous or imported) who is liable to tax under
in its unmanufactured Section 5.
state, whether ginned or
unginned, baled, pressed
or otherwise, but not in-
cluding cotton waste.
(ii) Cotton yarn spun yarn,
cotton yarn, other than
handbut not including
The assessability to sales tax of cotton yarn dyed and coloured has got to be judged with respect to the provisions of Section 5 read with the above entry in Schedule II. The cases are not complicated by the applicability of any other provisions such as Section 5A of the Act, which was one of the complicating factors that arose for consideration in the recent decision in Deputy Commissioner of Sales Tax (Law), Board of Revenue (Taxes), Etnakulam v. Pio Food Packers 1978 K.L.T. 279 (T. R. C. No. 2 of 1976). Concentrating our attention therefore on Section 5 and the entry in question, we are of the opinion that despite the process of dyeing and colouring, 'cotton yarn' still remained cotton yarn, that is the commodity mentioned in the entry and does not undergo any process of transformation so as to make sales tax exigible separately on the said commodity after the process of dyeing and colouring. The authorities seem to support the conclusion that we arrived at on the construction of the statute and the entry in the schedule. In Nagpur Yarn and Dyes Merchants Association v. State of Bombay  9 S.T.C. 530, the Bombay High Court was called upon to pronounce whether sales tax is payable for dyeing yarn of the customers handed over to the assessee for the purpose of dyeing. Under Section 6(1) of the Central Provinces and Berar Sales Tax Act, 1947, no tax shall be payable on the sale of goods specified in the second column of Schedule II. Entry No. 20 in that schedule was : 'Yarn excluding sewing and knitting thread.' It was observed :
What the petitioners sell may be dyed yarn, but it is yarn all the same. No exception has been made in the case of dyed yarn in the sense that the yarn does not cease to be tax-free merely because it is dyed. In the circumstances, therefore, the petitioners' contention that their transactions in respect of the sales of dyed yarn are not taxable under the Act must be upheld.
In Kailash Nath v. State of U. P.  8 S.T.C.358(S.C), the Supreme Court had occasion to consider the scope of an exemption notification issued under the provisions of the U. P. Sales Tax Act, 1948. The exemption was in respect of sales tax on cotton cloth or yarn manufactured in U. P., made on or after the 1st December, 1949, with a view to export such cloth or yarn outside the territories of India, on condition that the cloth or yarn was actually exported and proof of such actual export was furnished. The petitioners before the Supreme Court sold cotton cloth manufactured by them to their constituents who thereafter dyed and printed such cloth with hand-made apparatus and exported them overseas as hand-printed cloth. The question was whether the petitioners were entitled to exemption under the notification. It was observed:.Mr. Mathur contends that when the quantity of cloth sold by the petitioners is printed, coloured or dyed, it gets transformed into some other material and, therefore, what is exported is not the same cloth. By such printing and dyeing the original cloth gets metamorphosed into a different material with incidents not the same and appearance and colour changed. We are of the opinion that this argument is unsound. By using the word 'such' what the legislature has laid down is not that the identical thing should be exported in bulk and quantity or that any change in appearance would be crucial to alter it. Mr. Mathur relied upon State of Travancore Cochin v. Shanmugha Vilas Cashew-nut Factory  S.C.R. 53, wherein this court held that where cashew-nuts were purchased, conditioned and processed for export abroad, the exported article is not the same as the one purchased and, therefore, the exemption under Article 286 would not apply. It seems to us that there is a vast difference between prepared cashew-nuts and printed cloth and the observations there can, by no stretch of imagination, have any application to this case. We are of the view that the words 'such cloth or yarn' would mean the cloth or yarn manufactured in U. P. and sold. It has nothing to do with the transformation by printing and designs on the cloth. The cloth exported is the same as the cloth sold with this variation or difference that the colour has changed by printing and processing. In the view which we take that the cloth exported is the same as the cloth sold by the petitioners, there can be no question about the exemption clause not applying to it and if the exemption applies, then the tax has been levied without jurisdiction.
Both on the construction of the provisions of the taxing statute as well as on the principle of the judicial decisions noticed above, the view taken by the Sales Tax Appellate Tribunal is correct. We dismiss these tax revision cases, in the circumstances, without costs.