1. This tax revision case raises the question whether high density polyethylene (HDPE) woven fabrics are 'artificial silk fabrics' within the contemplation of item 4 of the Third Schedule to the Tamil Nadu General Sales Tax Act, 1959. Item 4 of the Third Schedule to the Sales Tax Act reads as under :
'Cotton fabrics, woollen fabrics and rayon or artificial silk fabrics, as defined in items 19, 21 and 22 respectively of the First Schedule to the Central Excises and Salt Act, 1944 (Central Act 1 of 1944).'
2. The scope of the exemption provision in the Sales Tax Act is clear. That which is exempt from sales tax is rayon or artificial silk fabrics. What rayon fabric is or artificial silk fabric is must be determined by turning to their definition in the First Schedule to the Central Excises and Salt Act. But when we turn to the Central Excises and Salt Act, we almost draw a blank. Here is how the relevant articles are defined in item 22 of the First Schedule to that Act :
'Rayon or artificial silk fabrics' means all varieties of fabrics manufactured either wholly or partly from rayon or artificial silk and includes embroidery in the piece, in strips or in motifs and fabrics impregnated or coated with preparations of cellulose derivatives or of other artificial plastic materials.'
3. The words of item 22 do not precisely define what is rayon and what is artificial silk. The entry only indicates that while hundred per cent rayon is undoubtedly rayon, in order to answer the statutory description it need not be hundred per cent rayon in every case; even where it is partly rayon it would still be regarded as rayon for purposes of Central excise. Likewise, artificial silk for purposes of Central excise need not be hundred per cent artificial silk. If it is, well and good. But even if it is only partly artificial silk and partly otherwise, it will still have to be regarded as artificial silk. Thus, rayon and artificial silk include rayon-mix and artificial silk-mix. We still have to find out what is the sense in which rayon and artificial silk are understood by the Central Excise and Salt Act. And we will have to find it out without any internal aid to construction. Rayon, as is now understood by technologists and traders, is a fibre made from regenerated cellulose, cellulose being the substance in living plants out of which the skeletal structure of plant cell walls are formed. Rayon is now used to denote this fibre from regenerated cellulose irrespective of the process by which it is made. The expression 'artificial silk' denotes that it is the opposite of natural silk. This term was originally used to refer to rayon, presumably because rayon was then the only kind of artificially silk. But so many other varieties of artificial silk have subsequently been invented and perfected by scientists and technologists. Those varieties have also made their appearance in industry and trade as marketable commodities. Thus, artificial silk is not a mere synonym for rayon. The two are not just interchangeable expressions. Artificial silk must be regarded as a genus of which rayon is the species. The modern appellation for 'artificial silk' would seem to be 'man-made fibre'. Indeed, item 22 of the First Schedule to the Central Excises and Salt Act, 1944, as it stands amended now, has abandoned the expression 'artificial silk' and has recast item 22 of cover all man-made fibres. The Federal Trade Commission of the United States has framed the Rules and Regulations under the Fibre Identification Act, 1960, to identify as many as 17 different kinds of man-made fibres including rayon, nylon, polyester and the like. It, therefore, seems to us proper to include within the scope of the expression 'artificial silk' any silk-like substance, which is not natural silk, but which is produced by human agency out of any product or a combination of products by any process. All that is necessary is that artificial silk, like natural silk, must be a fibre.
4. The claim in the present case for exemption from sales tax is in respect of high density polyethylene. The question is whether it can be regarded as artificial silk. It would appear that polyethylene is a synthetic resin falling under the category of thermoplastic in the same way as nylon or polythene or synthetic plastic resin. In this country, high density polyethylene is imported in granule form. The granules are passed through several processes and stretched into fibres if varying thickness. They are subsequently woven into cloth on looms. The nature of the substance and the manner in which it is made into a fibre to be used as such in the manufacture of fabrics shows that high density polyethylene must be brought under the genus 'artificial silk'. The sales tax authorities would be hard put to it to maintain the proposition that while high density polyethylene is manufactured out of a substance which itself is not natural silk, the same substance when it becomes a fibre and is used for being made into fabrics, somehow ceases to be artificial silk. We have no doubt that this article must be regarded as artificial silk as defined in item 22 of the First Schedule to the Central Excises and Salt Act.
5. A reference to the details of the excise tariff under item 22 of the First Schedule to the Central Excise Act shows that the duty varies according to the degree of mixture of rayon or artificial silk in the excisable fabric. Under the scheme of the Central Excise Act, the Central Government have also power to exempt excisable goods of any description. In exercise of their powers of exemption, the Central Government exempted high density polyethylene woven fabrics from excise duty under item 22 of the First Schedule. This exemption is assumptive of the Central Government's conviction that, but for the exemption, high density polyethylene woven fabrics would fall under item 22 as artificial silk fabrics and excisable as such. The Central excise department's clarification dated 18th January, 1974, also showed that the department has been treating high density polyethylene woven fabrics as equivalent to rayon or artificial silk fabrics.
6. Both the exemption from excise and the departmental clarification mentioned above are, in our judgment, based on an understanding of the scope of the expression 'artificial silk fabrics' falling under item 22 of the First Schedule to the Central Excise Act. It was urged by the learned Government Pleader that the notification of the Central Government exempting high density polyethylene fabrics under item 22 was based on a wrong assumption that they would otherwise be excisable under item 22 of the First Schedule. We agree that the belief or assumption of a taxing department may not always be a safe guide to understand the real nature and scope, either of a charge or of an exemption in the taxing enactment. What we have here, however, is a manufactured article, which goes by a commonly accepted trade description. In the understanding of such an expression, courts will not be doing violence to the principles of statutory construction if they pay regard to how such expressions are understood not only by the trade or by high technology in general, but also by the concerned departments of Government, part of whose task it is to put a correct interpretation on the expression in question for the purpose of running their departments. In the present case, the departmental practice as well as the position assumed by the Central Government only underlines what seems to us to be a legitimate conception of what 'artificial silk' is and includes, both under trade practice and under technical jargon. We have, therefore, no doubt whatever that high density polyethylene must be regarded as falling within the generic term 'artificial silk'. It follows that fabrics made out of this substance, either wholly or in part, whether they are hundred per cent pure or not, must qualify for exemption from sales tax as goods falling within the description set out in item 4 of the Third Schedule to the Tamil Nadu General Sales Tax Act, 1959.
7. In the result, we uphold the decision of the Tribunal and dismiss this revision. The assessee will have its costs. Counsel's fee Rs. 250.
8. Petition dismissed.