T. Ramaprasada Rao, J.
1. The Madura Mills Company, Limited, Madurai, the assessee petitioner herein, was assessed for the assessment year 1959-60 both under the Madras Sales Tax Act, 1959 (hereinafter referred to us the M.G.S.T. Act) and also under the Central Sales Tax Act, 1956 (hereinafter referred to as the C.S.T. Act). We are not here concerned with the assessment under the M.G.S.T. Act), A turnover of Rs. 7,96,61,509-04 was adopted as the turnover for purposes of the C.S.T. Act. After allowing certain exemptions and deductions, the taxable turnover was determined by the assessing authority at Rs. 7,87,77,857-26. On the ground that a turnover of Rs. 5,32,910-05 out of the determined turnover was not covered by ' C ' forms, the same was subject to the non-concessional rate of 7 per cent and the petitioner was assesseed to Central Sales Tax. In the turnover so excluded from the benefit of the statutory concession, it is claimed that a sum of Rs. 4,68,399-54 represented the sales turnover of cotton tyre Cord warp sheet. This is however subject to verification. The petitioner's further case is that in so far as the turnover of Rs. 5,29,652-57 out of Rs. 5,32,910-05 is concerned it did produce the ' C ' forms, not along with the return, but at some later point of time, either before or immediately after the final assessment order. The assessing officer rejected the claim of the assessee to be taxed at the lower rate of 1 per cent. because the ' C' forms were not filed in time and due diligence was not exercised in the matter of their filing. On appeal it was expressly contended that cotton tyre Cord warp sheet is not a woven fabric but is really cotton yarn. It was further argued that (a) for the turnover of Rs. 11,159-75 included in the disputed turnover the assessee's case is that the ' C ' forms were filed along with the returns. Ultimately they were not traced in the office of the Department. It could not therefore get relief before the assessing Officer. Before the Appellate Assistant Commissioner, however, duplicate ' C ' forms were obtained and filed before the Appellate Authority on 24th January, 1964.
(b) Regarding the turnover of Rs. 2,52,311-80 forming part of the disputed turnover, the ' C' forms were filed after pre-assessment notices were issued by the assessing authority and before it passed the order.
(c) Regarding the turnover of Rs. 1,53,154-90 forming part of the disputed turnover, the ' C ' forms are purported to have been filed after the order was passed but before it was received,
(d) Regarding the turnover of Rs. 1,13,026-12 forming part of the disputed turnover, the ' C 'forms were filed after the receipt of the order but they were returned and not entertained by the Appellate Authority even when tendered before it.
2. Certain dates are relevant to appreciate the factual contentions regarding the production of ' C ' forms by the assessee. As already noticed, the ' C ' forms for the turnover of Rs. 11,150-75 are reported to have been filed along with the returns but they were not ultimately traced and therefore considered as lost. On 23rd September, 1963, the assessee received the pre-assessment notice. On 27th September, 1963, the assessee requested for time for production of the necessary ' C ' forms and for furnishing other particulars till 15th October, 1963. On 20th September, 1963, 'C' forms for Rs. 2,52,311.80 were filed. On 30th September, 1963, the order of assessment was made. On 13th October 1963, and before the receipt of the order, ' C ' forms for Rs. 1,53,154-90 were filed. On 16th October, 1963, the order was received. Thereafter, on 2nd and 6th November, 1963, ' C ' forms for Rs. 1,13,026.12 were filed.
3. The Appellate Assistant Commissioner rejected the appeal in toto. On a further appeal to the Tribunal, it was of the view that the cotton tyre cord warp sheet was neither yarn nor fabric, but is a species of its own, uncovered by the provisions of the Central Sales Tax Act; it was of the view that cotton type cord was sheet (hereinafter referred to as cord) is an independent item of goods coming within the general purview of goods and as such goods are assessable to multi-point levy under the Madras General Sales Tax Act, they are liable to Central Sales Tax at the rate of 2 per cent. possibly by the operation of Section 8 (2-A) read with Section 9 (3) of the Central Sales Tax Act. It finds that ' cord' means twisted thread; but, as yarn is spun thread, ' cord ' cannot include yarn. It however, incorrectly observed that no objection was raised by the petitioner to the effect that ' cord' should be classified as cotton yarn. As a matter of fact, this was the burden of the song of the assessee. On the other question, the Tribunal was of the view, relying on Deputy Commissioner of Commercial Taxes, Madras Division v. Manohar Brothers (1962) 13 S.T.C. 686, that the 'C' forms were not filed strictly in accordance with the statutory provisions under the Central Sales Tax Act. The Tribunal found that the petitioner did not furnish the ' C ' forms before the prescribed authority before the 25th of the succeeding month nor did it maintain a register in Form No. 9 and submit the forms with its last return. Such non-compliance, according to the Tribunal, was enough to reject the contention that the petitioner was entitled to a concessional rate of levy. Against the said order of dismissal of the appeal by the Tribunal, the present Tax case has been filed.
4. Mr. Rangarajan, learned Counsel for the petitioner, states that ' cord' is classifiable as textile or cloth and hence exempt from taxation. He would urge that the view in Deputy Commissioner of Commercial Taxes, Madras Division v. Manohar Brothers (1962) 13 S.T.C. 686, is no longer good law in view of the later pronouncement of the Supreme Court and the decisions of this Court. He has produced before us the ' cord ' and urged that the material is not even corded and certainly not a textile fabric. It is at best cotton yarn, which is distinctly understood as a separate commodity in commercial circles.
5. We shall first dispose of the question whether the ' C ' forms have to be rejected, as done by the Tribunal. The order of the Tribunal was rendered on 18th May, 1965. The Supreme Court in Sales Tax Officer v. Abraham : 3SCR518 , dealing with the prescription as to time in the matter of the filing of the ' C ' forms under the Central Sales Tax (Kerala) Rules, 1957, held that such a mandate as to time was ultra vires of Section 8 (4) read with Section 13 (3) and (4) of the Central Sales Tax Act, 1956. The Court further observed that if the declarations in ' C ' forms were furnished within a reasonable time, then there was sufficient compliance with the requirements of Section 8 (4) (a) of the Act. This decision was given on 7th April, 1967, and obviously could not have been placed before the Tribunal. A Division Bench of this Court, to which one of us was a party, after noticing the above Supreme Court case, but under similar circumstances, observed in Tirukoilur Oil Mills Ltd. v. State of Madras : AIR1968Mad311 .
Rule 5 (1) of the Central Sales Tax (Madras) Rules, 1957, in so far as it prescribes a time limit for filing declarations in Form 'C' is invalid a being in excess of the rule-making power of the State Government. Normally the declarations in the prescribed form and in the prescribed manner should be filed within a reasonable time. But what will be ' reasonable time ' in a given case will depend on particular circumstances, and if defects in the C form are known before assessment is made, but still the assessee failed to furnish the correct particulars in spite of reasonable time being given to him before assessment is completed, it may be a case for application of the higher rate of tax. But even here one cannot lay it down as a rule of law, for circumstances may exist which may justify extension of the scope of ' reasonable time '.
It therefore follows that the rule-making power not being available for prescribing the time for filing of the ' C declaration forms, it should be considered whether in the instant case, the assessee filed them within a reasonable time.
6. Regarding the turnover of Rs. 11,159-75, the case of the petitioner is that it filed the ' C ' forms well within time. They were not traceable. It obtained duplicate forms and filed them before the Appellate Authority who refused to consider them. It cannot be said that there was any oblique purpose in the minds of the assessee when it pleaded in the way it did. Considering the bona fides in the conduct of the assessee we do not think that the production of the ' C ' forms were unduly delayed. Regarding the turnovers of Rs. 2,52,311-80 and Rs. 1,53,155-90 we are of the view that the relative ' C ' forms should be noticed and considered. The ' C ' forms relatable to the former turnover were filed before the assessment order was passed and in the case of the latter they were filed before the order was communicated to the assessee. In either case, they are not to be rejected as deserving no consideration whatsoever. The Appellate Assistant Commissioner at least should have taken them on file and adjudicated upon them. In our view, they were filed within a reasonable time, and in fact, within the time asked for and as a matter of fact they entered the portals of the Assessing Officer before the assessment order was made or made known to the petitioner. As regards the last amount of Rs. 1,13,026-12, an arbitrary rejection of the ' C' forms connected therewith appears to be unjustified. The prescription as to time in the rule, being ultra vires, in such cases the authorities should act prudently and as reasonable men, consider the totality of the facts and circumstances of each case and come to a diligent conclusion. In Tirukoilur Oil Mills Ltd. v. State of Madras : AIR1968Mad311 , while dealing with the aspect of rectification of defects, in ' C ' forms produced before taxing authorities, this Court said:
Principles of natural justice would require that, when something is discovered at the appellate stage which exposed the assessee to a higher rate of tax, the assessee should be given an opportunity to rectify the defects within a stipulated time granted for the purpose.
The above dicta is applicable even in case the ' C ' forms are not produced in time. When there is callous indifference and wilful avoidance of the filing of the ' C ' forms, in spite of a reasonable opportunity given for the purpose, the matter would be different. But when no such opportunity was given at all, and when the ' C ' forms for the turnover of Rs. 1,13,026.12 were filed by the assessee but they were not taken on file for being dealt with in accordance with law, there is a failure of natural justice as a result of the attitude of the Revenue and the Tribunal. As justice should not only be done but seem to be done, we are of the view that the petitioner is entitled to the relief that all the ' C ' forms filed by its deserve to be considered on their merits and in accordance with law.
7. The other aspect of the case is as to the nature of the goods described as 'cord' by the assessee and as to how it should be classified. The Revenue's case is that it is neither fabric or yarn nor cord, but could be explained away as a type of commercial goods susceptible to multi-point levy under the Madras General Sales Tax Act. The assessee's burden of the song was that the goods are cotton yarn. The Tribunal wrongly noticed in its order that no such ' objection,' meaning thereby contention, was taken by assessee. In fact, in its grounds of appeal before the Appellate Authority, the assessee says so. It is by now well settled that if a Tribunal functioning under Fiscal laws, while dealing with a contention raised before it, is of the view that it is not well founded, yet it could grant relief if it is satisfied that the assessee's stand is otherwise justified on other grounds not raised before it; it is indeed in duty bound to grant such a relief--see Commissioner of Income-tax, Madras v. Mahalakshmi Textile Mills Ltd. : 66ITR710(SC) .
8. The 'cord' a sample of which has been seen by us, is undoubtedly not a fabric or textile or cord as is normally understood. The Tribunal also is of that view. ' cord ' means twisted thread thicker than string and thinner than rope. Ordinarily ' cord' is understood as rope of small diameter or a thick string. String, cord, rope, are, no doubt, different species of the same genius, namely, yarn. But yarn as such means spun thread. It may form one of the threads of a string, cord or rope. But cotton yarn is distinct by itself and does not evade analysis. The Tribunal, after meticulously explaining the words cord, string and rope, comes to the conclusion that the material before it was not cotton yarn. No reason is given why the ' cord ' is not cotton yarn. The ' Cord ' in question is a bunch of spun thread spread to a particular shape for a definite commercial purpose. Nevertheless it does not cease to be yarn. The Board of Revenue at one time with the assistance of expert opinion, held the view that ' cord ' was not a woven fabric. We add it is not a woven cord, string or rope. But the Revenue, with which the Tribunal, concurred, said:
The tyre cord warp sheet is manufactured on looms. But its texture is not close as that of cloth. Its warp is made of cords or thin ropes of twisted yarn and the weft is a thing yarn which serves only to hold the warps. So the commodity is neither cloth nor mere yarn as contended. It is distinct from both and is liable to multipoint levy.
9. The entire description of the goods is a misdescription. No doubt, the ' cord ' is manufactured on looms. It is admittedly not a textile fabric or cloth. It is of course twisted. But the very look of the material cannot give any impression that it is some unknown commodity, not being cotton yarn. The thin thread running vertically into the sheet is only to hold the rest of the thread. On that score it cannot be said that the main identity of the goods as yarn is lost. After a careful consideration of the matter and after inspecting the material, we are of the opinion that the ' cord is cotton yarn in the accepted commercial sense.
10. Under the Central Sales Tax Act, cotton fabric is declared goods under Section 14 (ii) (a) therein; whereas under the Madras General Sales Tax Act, cotton yarn is declared goods, under Section 4 read with serial No. 3 of Schedule II therein. The rate of tax on cotton yarn is 1 per cent. as on the material date. In the view expressed by us that 'cord' is cotton yarn, the turnover of Rs. 4,68,399-54, as now claimed by the assessee before us, is in any event assessable only at that rate in the instant proceedings. The Revenue of course can verify whether the figure is correct or not.
11. It may be that a portion of the above turnover may overlap with the disputed turnover of Rs. 1,13,026-12, which concerns itself with the non-production of ' C ' forms in time. But this is again a matter for the Revenue to split and grant the necessary relief to the assessee.
12. As the Tribunal failed to give the necessary relief to the assessee, to which it is legitimately entitled, the Tax Case is allowed and the appeal is remitted to the Tribunal for being disposed off in accordance with law. There will be no order as to costs.