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Moti Lal and Co. Vs. State of Rajasthan - Court Judgment

LegalCrystal Citation
SubjectSales Tax
CourtRajasthan High Court
Decided On
Case NumberD.B. Sales Tax Reference No. 17 of 1970
Judge
Reported in[1982]49STC127(Raj)
AppellantMoti Lal and Co.
RespondentState of Rajasthan
Cases ReferredIn Porritts & Spencer (Asia) Ltd. v. State of Haryana
Excerpt:
- - -(1) no tax shall be payable under this act on the sale or purchase of any of the exempted goods if the conditions specified in column 3 of the schedule are satisfied. it may be weak or strong, light or heavy, bleached or dyed, according to the requirement of the purchaser......is woven into a fabric, what comes into being is a 'textile' and it is known as such. it may be cotton textile, silk textile, woollen textile, rayon textile, nylon textile or any other kind of textile. the method of weaving adopted may be the warp and woof pattern as is generally the case in most of the textiles, or it may beany other process ortechnique.... whatever be the mode of weaving employed, woven fabric would be 'textiles'. what is necessary is no more than weaving of yarn and weaving would mean binding or putting together by some process so as to form a fabric. moreover a textile need not be of any particular size or strength or weight. it may be in small pieces or in big rolls: it may be weak or strong, light or heavy, bleached or dyed, according to the requirement of the.....
Judgment:

Dwarka Prasad, J.

1. The short question, which arises for determination in this case, is whether 'durries', in which the assessee deals, fall within the expression 'textiles' occurring in the notification issued by the State Government under Section 4 of the Rajasthan Sales Tax Act, 1954 (hereinafter called 'the Act'). The circumstances in which this question arises may be briefly stated :

2. M/s. Moti Lal & Co., Jodhpur (hereinafter called 'the assessee'), is a dealer registered under the Rajasthan Sales Tax Act, 1954, and deals in various commodities including durries. He was assessed to sales tax under Section 10 of the Act for the period from 13th July, 1957, to 10th November, 1958, by the Sales Tax Officer, Jodhpur. The turnover of the assessee in respect of the sale of durries during the aforesaid period amounted to Rs. 77,290 and sales tax was imposed upon the assessee in respect thereof. The assessee contended before the Sales Tax Officer that by virtue of the notifications issued by the State Government on 14th December, 1957, and 1st July, 1958, the sale of durries was exempted from payment of sales tax. But the contention of the assessee was not accepted. An appeal preferred by the assessee before the Deputy Commissioner, Sales Tax (Appeals), Jodhpur, was also dismissed and a revision petition preferred by him before the Board of Revenue also met the same fate. Then, an application was filed by the assessee before the Board of Revenue for Rajasthan at Ajmer requiring the Board to refer the question of law as to whether 'durries' were included within the expression 'textiles' which arose out of the order of the Board of Revenue to this Court. As the Board did not make any reference within the statutory period, the assessee filed an application in this Court under Section 15(2)(b) of the Act. This Court by its order dated 18th April, 1969, directed the Board of Revenue to state the case and refer the following question of law arising out of its order to this Court :

Whether 'durries' can be held to be included within the expression 'all textiles', whether cotton, woollen or silken, including rayon art-silk or nylon but exclusive of pure silken cloth of all varieties (however manufactured)

3. While Section 3 of the Act makes provision for imposition of sales tax in respect of the turnover of every dealer above the specified limit, Section 4 provides that the sale of certain goods shall be exempted from payment of tax under the Act. Relevant provisions of Section 4 are as under :

4. Act not to apply to certain sales.-(1) No tax shall be payable under this Act on the sale or purchase of any of the exempted goods if the conditions specified in column 3 of the schedule are satisfied.

(2) Where the State Government is of the opinion that it is necessary or expedient in the public interest so to do, the State Government may, by notification in the official Gazette, exempt from tax the sale or purchase of any goods or class of goods or any person or class of persons on such conditions and on payment of such fee as may be specified in the notification.

4. In the notification issued by the State Government on 14th December, 1957, under Sub-section (2) of Section 4 of the Act, the following articles were exempted from payment of sales tax :-

(i) Sugar,

(ii) tobacco and its products, and

(iii) all textiles, whether cotton, woollen or silken, including rayon, art-silk or nylon but exclusive of pure silken cloth of all varieties (howsoever manufactured).

5. By a subsequent notification issued by the State Government on 1st July, 1958, under Section 4(2) of the Act, the following articles were unconditionally exempted from payment of sales tax from 1st July, 1958 :

(i)...

(ii)...

(iii) all varieties of textiles (other than pure silk cloth) made wholly or partly of cotton, rayon, nylon, wool or artificial silk including handkerchiefs, towels, napkins, dusters, cotton velvets and velveteen, hosiery cloth in lengths excluding finished items thereof, tapes, niwars and laces.

6. The question which arises now is as to whether 'durries' are covered by the expression 'all textiles' employed in the notification dated 14th December, 1957, and the expression 'all varieties of textiles' used in the notification dated 1st July, 1958, so that the sale thereof may be exempted from payment of sales tax under the Act. The word 'textiles' has not been defined in the Act but such words of every day use should be construed not in their scientific or technical sense but as they are understood in common parlance. In Grenfell v. Inland Revenue Commissioners (1876) 1 Ex D 242, Pollock, B., observed as under :

If a statute contains language which is capable of being construed in a popular sense, such 'a statute is not to be construed according to the strict or technical meaning of the language contained in it, but is to be construed in its popular sense, meaning of course, by the words 'popular sense', that sense which people conversant with the subject-matter with which the statute is dealing would attribute to it'.

7. Story, J., in the case of 200 Chests of Tea (1824) 9 Wheaton (US) 430 observed as under :

The particular words used by the legislature in the denomination of articles are to be understood according to the common commercial understanding of the terms used, and not in their scientific or technical sense, 'for the legislature does not suppose our merchants to be naturalists, or geologists, or botanists'.

8. It is thus firmly established that the expressions used in the taxing statutes should be understood in the sense in which people conversant with the subject-matter with which the statute deals would attribute to it. The expression 'textiles' used in the aforesaid notifications cannot, therefore, be given any scientific or technical meaning but it should be understood according to its popular meaning, as used in common parlance. The point is as to how the traders or the purchasers normally understand the word 'textiles'.

9. In Porritts & Spencer (Asia) Ltd. v. State of Haryana [1978] 42 STC 433 (SC), the popular meaning of the word 'textiles' came up for consideration before their Lordships of the Supreme Court. It was observed by Bhagwati, J., speaking for the Supreme Court in that case, as under :

The word 'textiles' is derived from the Latin 'texere', which means 'to weave' and it means any woven fabric. When yarn, whether cotton, silk, woollen, rayon, nylon or of any other description or made out of any other material is woven into a fabric, what comes into being is a 'textile' and it is known as such. It may be cotton textile, silk textile, woollen textile, rayon textile, nylon textile or any other kind of textile. The method of weaving adopted may be the warp and woof pattern as is generally the case in most of the textiles, or it may beany other process ortechnique.... Whatever be the mode of weaving employed, woven fabric would be 'textiles'. What is necessary is no more than weaving of yarn and weaving would mean binding or putting together by some process so as to form a fabric. Moreover a textile need not be of any particular size or strength or weight. It may be in small pieces or in big rolls: it may be weak or strong, light or heavy, bleached or dyed, according to the requirement of the purchaser. The use to which it may be put is also immaterial and does not bear in its character as a textile. It may be used for making wearing apparel, or it may be used as a covering or bed-sheet or it may be used as tapestry or upholstery or as duster for cleaning or as towel for drying the body. A textile may have diverse uses and it is not the use which determines its character as textile.

10. Thus, the aforesaid decision has laid down that whatever may be the size or weight or colour of the article and whatever be the mode of weaving employed, a woven fabric is textile and it is so irrespective of the use to which such woven fabric may be put. The use thereof does not determine the character of the material as textile or otherwise. Applying the aforesaid test laid down by their Lordships of the Supreme Court, there can be no doubt that 'durries' are woven fabric, as it is only by a process of weaving whether of cotton, silk or wool, rayon or nylon or threads of any other material or description 'durries' are made.

11. We, therefore, hold that 'durries' fall under the exemption granted by the aforesaid two notifications dated 14th December, 1957, and 1st July, 1958, as they are covered by the expressions 'all textiles' and 'all varieties of textiles' occurring in the aforesaid notifications.

12. In the result, we answer the question referred to this Court in the affirmative and in favour of the assessee and against the revenue. However, in the circumstances of the case, the parties are left to bear their own costs.


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