B.P. Beri, Ag. C.J.
1. The petitioner owns an industrial unit 'Shriram Rayons', which is located at Kota in the State of Rajasthan and it manufactures 'rayon tyre cord fabric.'
2. The petitioners case is that this commodity is a textile consisting of rayon threads in the warp & cotton threads in the weft and is manufactured on weaving looms like any other textile. It is supplied to the manufacturers of tyres who use the material for the purposes of impregnating it with rubber, Entry 18 of the Schedule to the Rajasthan Sales Tax Act, 1954 (hereinafter called 'the Sales Tax Act') exempts from the sales tax and purchase tax cotton fabrics, rayon or artificial silk fabric, woollen fabric as defined in the Additional Duties of Excise (Goods of Special Importance) Act, 1957. The Additional Duties of Excise Act, 1957 in turn borrows the definition of rayon or artificial silk fabrics etc. from Item No. 2 of the First Schedule to the Central Excise and Salt Act, 1944 Sales were made by the petitioner of the rayon tyre cord fabric and they claim that this article was exempt from sales tax & in point of fact for the years 1965 66, 1966-67, 1967-68 & 1968 69 the petitioner was not charged any sales tax on the said commodity. It is emphasised that the order relating to the year 1967-68 and 1968-69 were passed after evidence was led and the questions keenly debated. It was in April, 1971 that a question was raised in the Legislative Assembly of Rajasthan that the exemption from Sales Tax of the sales of the petitioner's rayon tyre cord fabrics was erroneously granted and a debate followed and in the course of it the Minister declared to bring the sales of the petitioner's commodity in question to tax. The Commissioner of Commercial Taxes issued a letter (Annexure 'A' to the petition) to the respondent No. 1 to levy Sales tax at 10% On the 10th of May, 1971 the Deputy Commissioner (Administration), Commercial Taxes. Jaipur, issued four notices under the proviso to Section 12(1) of the Sales Tax Act, for taxing the sales of the petitioners commodity in question. The proceedings were dropped on the 21st of June, 1971 in view of the petitioner's preliminary objection and thereafter the respondent No. 1 issued 4 notices, all dated 31st July, 1971 under Section 12 of the Sales Tax Act for the years 1965 66 to 1968-69 with a view to taxing the sales of the commodity in question. By his. order dated 15-10-1971 the respondent No. 1 assessed the petitioner under the Central Sales Tax Act on the sales of the commodity in question rejecting the petitioners contention that the said commodity was exempt from sales tax because it was covered by entry 18 to the Schedule of exempted goods under the Salts Tax Act. The said assessment order has been impugned in writ petition No. 1885/71.
3. As both that the writ petitions are of the same petitioner and raise an identical point it will be convenient to dispose them together. The grounds of attack are that the rayon tyre cord fabrics in technical as well as commercial parlance is a fabric which is exempt under Item 18 in the Schedule to the Sales Tax Act; that the said tax has been assessed by the taxing authorities in view of the declaration made by the Government on the floor of the Legislative Assembly and the petitioner is being asked let this late stage to produce 'c' Form Certificates as the transactions of sale were inter-state. The petitioner has relied on a number of documents and books to show that the commodity in question is a fabric covered by Item 18 in the Schedule to the. Sales Tax Act. The prayer in writ petition No. 1885/71 is for a grant of writ in the nature of certiorari or other appropriate writ, direction or order under Articles 228 and 227 of the Constitution of India calling for the record of the case and after examining the legality thereof quash and set aside the assessment order and notice of demand dated the 15th of October, 1971 for the year 1969-70 and the notice dated 11th August, 1971 under Section 12 ot the Sales Tax Act proposing to make reassessments on the sales for the years 1965-66 to 1968-69 and restrain the State from demanding the amount of Rs. 45,34,765/-. The prayer in the writ petition No. 398/72 is the same but it relates to the demand of tax dated 25th January, 1972 for the year 1970-71 and to restrain the respondents from recovering the sum of Rs. 9,45,010.16 P.
4. The State has filed an answer to the petition contesting the plea raised by the petitioner that the commodity in question is exempt under Item 18 of the Schedule to the Sales Tax Act and it is further submitted that according to the legal provisions and definitions, fabric is a manufactured material which is an end-product which does not need further manufacturing involving change in its properties. They say that fabric is cloth with the definite properties of end-product, though it may be out-shaped, designed, fitted, stitched, adjusted, embroidered, impregnated or coated or may be put to like processing without losing its original properties before it is put to use and that the commodity produced by the petitioner which it is claimed to be exempted, is not fabric but it is basically cord. In the course of the arguments on behalf of the respondents a statement in writing was made that the four notices relating to reassessment the years 1965-66, 1966-67, 1967-68 and 1968-69 issued under Section 12 of the Sales Tax Act have been withdrawn because they were not issued by the Deputy Commissioner (Administration) or under his directions. The Department it is stated has also filed in the month of October 1971 revision applications under Section 14 of the Sales Tax Act against the four assessments orders made on 23-10-1968, 12-5-1969, 11-12-1970 and 26-3-1971 for the assessment years 1965-66, 1966-67, 1967-68 and 1968-69 respectively.
5. Learned Counsel for the respondents Mr. S.T. Desai made the following statement at the Bar:
That if the matter goes back to the Authority before whom appeals are pending, the Department will not contend that the assessee was liable to pay tax at the rate of 10 percent and will waive the objection regarding the non-submission of 'c' Forms.
This concession it appears will substantially reduce the petitioner's tax liability.
6. Mr. Desai, however, raised a preliminary objection that this Court should not exercise its jurisdiction under Articles 226 and 227 of the Constitution of India because whether Rayon tyre cord fabric is fabric or not is a disputed question of fact and should not be adjudicated in the exercise of extraordinary jurisdiction. He further submitted that the petitioner has alternative remedies which are provided by the Sales Tax Act and the petitioner should not be permitted to by-pass the statutory machinery. He contended that there is no error apparent on the face of the record in the circumstances of this case attracting the jurisdiction of this Court at this stage and merely because the petitioner will be required to deposit tax before resorting the remedy of appeal is no ground for exercising the extraordinary jurisdiction and he relied on Sales Tax Officer, Jodhpur and Anr. v. Shiv Ratan G. Mohatta 16 STC 899 (SC) Bhopal Sugar Industries Ltd. Madhya Pradesh v. D.P. Dube, Sales Tax Officer, Bhopal 14 STC 410 (SC), M/s Jaipur Hosiery Wills Pvt. Ltd., etc. v. The State of Rajasthan and Ors., etc. AIR 1971 SC 1230; State of Rajasthan and Anr. v. Karamchand Thappar and Bros. 16 STC 412 (SC); Nenuran v. The State of Rajasthan and Ors. 20 STC 551 (Raj); Thansingh Nathmal and Ors. v. The Superintendent of Taxes, Dhubri and Ors. 15 STC 468 (SC); Shivram Poddar v. Income-Tax Officer, Central Circle II, Calcutta and Anr. : 51ITR823(SC) ; C.A. Abraham v. Income-tax Officer, Kottayan and Anr. : 41ITR425(SC) , Nagendra Nath Bora and Anr. v. The Commissioner of Hills Division and appeals Assam and Ors. AIR 1958 SC 1240 and Tata Engineering and Locomotive Company Ltd. v. The Assistant Commissioner of Commercial Taxes and Anr. 19 STC 520 (SC) Mr. Desai, urged that in case his preliminary objections are over-ruled he should be given an opportunity to lead expert's evidence to satisfy the Court that the commodity in question is not a fabric.
7. Mr. A.K. Sen, learned Counsel for the petitioner, urged that there was no dispute on facts because both the parties agree on the sample of the fabric shown to the Court and it can be decided whether it is a fabric or not as envisaged by Item 18 of the Schedule to the Sales Tax Act. It is not a question of fact but of on interpretation of a particular item in the Schedule. Whether the commodity in question is a fabric or not urged the learned Counsel should be understood in the same sense as the commercial community comprehends it and the meaning given to it in common parlance and this Court in exercise of its powers under Article 226 has jurisdiction to decide such a question. The plea of alternative remedy is not available to the respondents when the question is whether a commodity falls within the ambit of a given item or not, and the alternative remedy is of no use when the authorities have been influenced by higher authorities to lend support to a particular construction. He further urged that rules of natural justice have been violated in this case and in such a situation the plea of alternative remedy is not available to the respondents In the case before us the learned Counsel contended that the assessing authority has relied on the decision of the Excise Authorities without disclosing he same to the petitioner and thus violated the principles of natural justice. When an assessing authority takes into account extraneous considerations it amounts to a jurisdictional error on its part and the remedy under Article 226 of the Constitution should not be denied to the petitioner. Mr. Sen placed reliance on certain cases which we shall notice at appropriate place.
8. It is not necessary to discuss each of the authorities cited before us in detail although we have examined them. The principles which emerge from the Supreme Court cases cited before us by Mr. S.T. Desai could be conveniently summarised for testing the validity of the preliminary objections.
9. The position of law is that in matters of taxation a petition under Articles 226 and 227 of the Constitution of India should be entertained only in exceptional circumstances, namely, when the attack is against the root of the jurisdiction of the taxing officer, or there is something to show that it would be a case of palpable injustice to force the assessee to adopt the remedies provided by the Act 16 STC. 589. In appropriate cases the Court can determine the eligibility to tax of transactions the nature of which is admitted 14 STC 410. It the tax has been levied without legal authority on any trade or business it is open to the citizen to approach the Court since his very right to carry on the trade is violated 16 STC 412. In other words where the very constitutionality of the tax is challenged and there is a patent lack of jurisdiction and some fundamental right is involved the High Court may interfere under Article 226 of the Constitution 20 STC 551. The same principle has been reiterated in an income tax matter that the questions relating to assessment, levy and collection of tax could be interfered with only when violation of fundamental rights arise 1964 51 ITR 323. The High Court should not decide disputes of fact 19 STC 412. The hierarchy of the taxing Tribunals have been conferred with powers to decide questions of fact and the High Court has no powers to decide such questions which are exclusively within the jurisdiction of taxing authority 15 STC 488, nor is the exercise of jurisdiction by the High Court desirable if facts have to be found on evidence 19 STC 520. The Supreme Court has also ruled that the petitioner should not be permitted to bypass the statutory machinery 14 STC 410, nor should the High Court decide whether a particular commodity falls under a given head liable to tax, for example, whether 'baniyans' or 'chaddies' were hosiery products and it should have been left to the assessing authorities to decide the question in the circumstances of the case. : 1SCR396 .
10. The question before us succinctly stated is whether the material shown to us at the time of the arguments is a fabric. We might observe that in the samples shown to us by both the parties rayon cords are suspended from a tab as warp and they are woven by weft of thin cotton thread liberally spaced but at regular intervals. The thin cotton weft seems to be literally, the thin dividing line on which the decision is likely to rest whether it is a cord or fabric Mr. Desai repeatedly labelled it as a hybrid product while Mr. Sen firmly described it as a fabric. The problem is whether this is a question of disputed fact. We agree with the contentions raised by Mr. Sen that to ascertain the identity of a given commodity we should accept the connotation which it has received in commercial world or in common parlance. The petitioner itself led evidence oral and documentary to demonstrate that it was a fabric and it is equally open to the Department to establish that it is a cord as it proposes to do. It will be from this evidence and other circumstances that a final inference of the name to which the material is entitled will be drawn. This in our opinion is not a question of mere interpretation of the term 'fabric' but whether it applies to the commodity in question. After all the exercise of jurisdiction under Article 226 of the Constitution in a case of this kind is essentially a question of discretion dependent on the totality of circumstances of the case. The decided cases merely provide guide lines. Regarding the case in hand we are inclined to be of opinion that it is a disputed question of fact dependent on evidence and in view of the authorities we have noticed earlier we should not decide it in the exercise of our extraordinary jurisdiction. We cannot lose sight of the fact that the Department has itself moved the Board of Revenue by way of revision against the assessment orders for the years 1965-66, 1966-67, 1967-68 and 1968-69. The petitioner has also appealed against assessment orders relating to the years 1969-70 and 1970-71 and the appeals are pending. Besides, a substantial concession has been made before us by the Department by waiving insistence on 'C' Forms.
11. We might notice the argument of the learned Counsel for the petitioner by which be tried to induce us to interfere in these writ petitions. He urged that by Annexure 'A' the Commissioner, Sales Tax directed the subordinate authorities to tax the petitioner at 10 percent on the Ty-cord Fabrics and that notices should be issued under Section 12 read with Section 9(3) of the Sales Tax Act it is a proper case where we should interfere. The short answer to this grievance is that the Department has already made a concession before us that it will waive its objection regarding the non-submission of 'C' Forms and consequently the petitioner shall not be charged 10 percent by the Departmental Authorities. The four notices have already been withdrawn as we have noticed. In these circumstances we are unable to hold that the influence of Annexure 'A', if it had any still survives We have examined Annexure Z B/(sic), which is the Assessment Order dated 15-10-71 and we are of the opinion that it does not appear to have been influenced by Annexure 'A'.
12. The next argument of Mr. Sen is that the decision of the Central Board of Revenue was utilised against the petitioner without the same being shown to him. It has been utilised as a mere precedent and it was not obligatory for the Sales Tax Officer to have shown this to the petitioner. We are not very much impressed by this argument.
13. Mr. Sen also argued that the Sales-tax Authorities will be influenced by the debate in the Legislative Assembly. The Assessment Orders filed before us do not give us an impression that the taxing authorities have been influenced by the debate in the Assembly. After all there are remedies provided under the Sales-tax Act, namely, an appeal under Section 13 and a revision before the Board of Revenue under Section 14 and there is a provision for a reference under Section 15 of the Sales Tax Act, to this Court.
14. Let us now examine the cases relied upon by Mr. Sen.
15. In A.V. Venkatesharan v. R.S. Wadhwani : 1983ECR2151D(SC) the question raised was whether fountain pens were covered by Item 45(3) as fountain pens complete or as articles plated with gold or silver under Item 61(8) of the Tariff Act, 1934. In the circumstances of that case where Sheaffer pens imported from Australia were being taxed under Item 61(8), their Lordships of the Supreme Court observed:
We need only add that the broad lines of the general principles on which the Court should act having been clearly laid down, their application the facts of each particular case must necessarily be dependent on a variety of individual facts which must govern the proper exercise of the discretion of the Court, and that in a matter which is thus pre-eminently one of discretion, it is not possible or even if it were, it would not be desirable to lay down inflexible rules which should be applied with rigidity in every case which comes up before the Court.
Three circumstances impressed their Lordships, namely: (1) that the levy of the duty at 78 percent was manifestly erroneous and cannot be supported on any reasonable construction of the items in the Tariff Schedule, (2) that the Central Board of Revenue had issued a ruling to the effect that fountain pens with nibs or caps which were gold-plated fell within item 61(8), and (3) that there was only an error in the application of the law and there was thus a miscarriage of justice, and, therefore, their Lordships interfered in that case.
16. In Cannanore Spg. & Wvg. Mills v. Customs Collector, Cochin : 1978(2)ELT375(SC) the question for decision was whether the coils of cotton yarn cleared out of the appellant's factory were exempt from excise duty in view of Exts. P. 2 and P. 3 which exempt from payment of excise duty cotton yarn of 17 counts or more but less than 35 counts. No question was raised before their Lordships of the Supreme Court that the question could not be decided in the writ jurisdiction.
17. In Indian Home Pipe Company Ltd. v. The State of Uttar Pradesh and Ors. 29 STC 487 the learned Judges of the Allahabad High Court were persuaded to interfere because the question involved was of a recurring nature relating to the interpretation of an entry in a notification issued under the U.P. Sales Tax Act, 1948, and this was treated as a special circumstance. Mr. Sen urged that in his case also it was a matter of recurring liability but the Connotation of the term 'Hume Pipe' in the 10 Sales-tax Cases 29 STC 487 was not regarded as a term involving any factual controversy.
18. Maman Chand Kundan Lal v. The State of Haryana and Anr. 25 STC 458 is a case from the Punjab and Haryana High Court. The learned Judges decided whether Gram 'chhilka' was taxed without the authority of law and, therefore, the learned Judges exercised their discretion in favour of the petitioner.
19. The case of Tata Engineering and Locomotive Company Ltd. v. The Assistant Commissioner of Commercial Taxes and Anr. 19 STC 520 was of Tata Engineering and Locomotive Company. Their Lordships of the Supreme Court Interfere because the learned Additional Solicitor General did not suggest that it was going to be an issue of fact. The facts in that case were that the appellant manufactured the well-known Tata Mercedes Benz trucks, bus chassis, their spare parts and other accessories at Jamshedpur in the State of Bihar and they were sold to the Government of India, the State Governments, State Transport Corporations and Ors. Its sales in the Indian Market are of three kinds: (a) Sales inside Bihar State; (b) Sales in the course of inter-State trade and commerce: and (c) Sales effected from their stock-yards located in States other than Bihar. The appeal concerned itself to the sales located in States other than Bihar and that fact was not in dispute. The only question was one of liability.
20. In Bharat Motor Company v. The Assessing Authority and Ors. 22 STC 133 a learned Judge of the Punjab High Court was called upon to determine whether a tractor was or not a motor vehicle and he interfered because the term 'tractor' and motor vehicle were terms of accepted connotation.
21. In Tilok Chand Prasan Kumar v. The Sales Tax Officer, Hathras, District Aligarh 25 STC 118, the Allahabad High Court interfered regarding the tax on Arhar Dal. The learned Judges were in(sic) by the consideration that a very large number of cases were involved and the entire mercantile community was agitated on the question and therefore the learned Judges exercised their jurisdiction. In the case before us it has been admitted by Mr. Sen at the Bar that there are only 3 manufacturers of the commodity in question before us in the whole of India.
22. In Sujan Singh and Anr. v. Appellate Assistant Commissioner, Sales Tax, Delhi and Ors. 24 STC 504 a learned Judge of the Delhi High Court was called upon to determine whether spare parts included motor bodies. Here again we might observe that the terms involved were of accepted connotation.
23. Case of South Bihar Sugar Mills Ltd. and Anr. etc. v. Union of India and Anr., etc. : 1973ECR9(SC) related to Central Excise and Salt Act, 1944 and the question was whether the gas collected from lime kilns used in manufacturing sugar and soda ash was compressed carbon-dioxide not liable for excise duty. No question regarding alternative remedy was raised or decided in this case and we can quite appreciate that when the interpretation turned on the scientific terms their Lordships investigated and decided the question.
24. In State of West Bengal and Ors. v. North Adjai Coal Co. Ltd. 27 STC 268 the question was whether company was liable to pay sales-tax on the price of coal which was to be realised by the Government of India from the Govt. of Pakistan The respondent company without invoking the revisional jurisdiction of the Board of Revenue moved a petition before the High Court under Article 226 which was dismissed by a single Judge but on appeal under the Letters Patent the claim was allowed and the High Court declared that the respondent was exempt from liability to pay sales tax in respect of the coal supplied to the Government of Pakistan The State of West Bengal appealed to the Supreme Court. Their Lordships observed:
It is true that normally before a petition under Article 226 of the Constitution is entertained, the High Court would insist that the party aggrieved by the order of a quasi-judicial tribunal should have recourse to the statutory authorities, which have power to give relief. But that is a rule of practice and not of jurisdiction. In appropriate cases, the High Court may entertain a petition even if the aggrieved party has not exhausted the remedies available under a statute before the departmental authorities. In the present case, in the view of the High Court a case was made out for its interference with the order passed by the Deputy Commissioner, and we see no reason to hold that the High Court had not properly exercised jurisdiction in this case. The facts were apparently not in dispute, and the only question was whether in the facts and circumstances of the case, the respondents were entitled to the exemption claimed by them.
The situation before us is clearly different.
25. In B.K. Bajaj and Anr. v. State of Punjab and Ors. (21) because there were departmental instructions that the tax should be imposed on such sales, the learned Judge held that no useful purpose would be served to the petitioner by pursuing the remedies under the Punjab General Sales Tax Act.
26. In our opinion these cases are distinguishable on facts and situations arising therefrom.
27. The result is that the preliminary objection raised by Mr. Desai succeeds and these writ petitions are dismissed.
28. We make no orders for costs because the respondents filed an affidavit in the course of the arguments necessitating an adjournment and the petitioners are entitled to costs on that account.