TMI Blog1963 (11) TMI 65X X X X Extracts X X X X X X X X Extracts X X X X ..... s pieces were meant for preparing ladies' underwear. The Deputy Commissioner held that sarees would be covered by entry 3(i) of Schedule E to the Act, as the said entry specifically refers to sarees which are embroidered. As regards the embroidered three yards piece was concerned, he held that there being no entry covering that item, the embroidered piece of cloth fell under entry 22 of Schedule E to the Act. On the matter being taken to the Tribunal in appeal the Tribunal confirmed the order of the Deputy Commissioner in so far as the sarees were concerned, but differed from the Deputy Commissioner in regard to the three yards embroidered piece meant for ladies' underwear, and held that that piece was covered by entry 4 of Schedule D to the Act, as contended by the petitioners. Both the parties being dissatisfied with the aforesaid judgment and order of the Tribunal, they applied for a reference to this Court and the Tribunal has referred to us the following questions for our answers: "(1) Whether on the facts and in the circumstances of the case the sales of embroidered pieces of cloth of 5 yards and 3 yards effected under the applicants' bill No. 290 dated 1st December, 1960, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 2 of Schedule E. The Sales Tax Tribunal, agreeing with the Deputy Commissioner, held that under section 2(d) of the Central Excises and Salt Act, 1944, goods specified in the First Schedule to that Act were excisable goods and under section 3 thereof, such excisable goods were declared to be liable to excise duty. The reasoning adopted by the Tribunal was that in order that an article should be called a cotton fabric as defined by item 19 in the First Schedule of that Act, it must be an excisable article and must be subject to the levy of the excise duty. The Tribunal, therefore, held that since the sarees and the aforesaid piece in question were not excisable goods, they could not be termed cotton fabrics within the meaning of item 19 of the First Schedule to that Act and, therefore, would not fall under entry 15 of Schedule A to the present Act. This reasoning, in our view, is not correct. It is clear from entry 15 of Schedule A to the Bombay Sales Tax Act, 1959, that the goods which fall under that entry are inter alia cotton fabrics as defined in item 19 of the First Schedule of the Central Excises Act and not the goods which are excisable goods thereunder or upon which excis ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... to embroidered sarees, it would be the latter entry which would apply. As regards the three yards piece, the Tribunal was of the view that the Deputy Commissioner was not right, and held that though such a piece was not a garment, it was an article prepared from cotton fabric intended for ladies' underwear and, therefore, entry 4 of Schedule D would apply to such an article. Entry 15 of Schedule A to the Sales Tax Act, 1959, relied upon by Mr. Mody for the petitioners, runs in the following terms: "Cotton fabrics as defined in item No. 12 (now item No. 19) to the First Schedule to the Central Excises and Salt Act, 1944." There can be no doubt that pieces admeasuring five yards or three yards, either from malmal or voil cloth, would be cotton fabrics, and merely because they are cut from takas, they would not cease to be cotton fabrics, as defined in item No. 19 of the First Schedule to the Central Excises Act, 1944. The fact that they are so cut and are intended for use as sarees also would not make any difference. But the question is, whether after these pieces of five yards and three yards are cut from takas and embroidery work by hand or machine is superimposed upon them so as ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he latter are specifically intended to fall within entry 3 of Schedule E. Entry 3 of Schedule E therefore itself shows the legislative intent to treat the two kinds of sarees differently; those that are embroidered or otherwise decorated within the meaning of that entry and those that are not. Though, therefore, cotton sarees may, in ordinary parlance, be called cotton fabrics, if such sarees are sarees embroidered or decorated, provided such embroidery or decoration is superimposed upon them after the process of their manufacture is over, they would be dealt with differently and the sales thereof are subjected to sales tax under section 10 and entry 3 of Schedule E to the Act. The basis of distinction between the two types of articles, that is, those that fall under entry 15 of Schedule A and those that fall under entry 3 of Schedule E, is that in the latter class of articles, their manufacture as cotton fabrics is complete and the process of embroidering them is done after their manufacture as cotton fabrics is over, so as to make them embroidered sarees and it is that which enables the dealer to sell them not as cotton fabrics but as embroidered sarees. It is this additional pro ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... x Act, 1956. He argued that under this Act, an additional duty was levied, amongst other goods, on cotton fabrics and that additional duty was to be distributed amongst the various States and that the policy followed both by the Central Government as also by the State Government was that as the additional duties were to be distributed amongst the States, the States should refrain from taxing by way of sales tax the goods set out in section 3 and section 7 of the aforesaid Act and that it was in pursuance of such a policy that under section 5 of the Sales Tax Act and entry 15 in Schedule A to the Act, cotton fabrics amongst other goods were exempted from the burden of sales tax. There may perhaps be some force in that contention and section 5 and entry 15 in Schedule A to the Bombay Sales Tax Act, 1959, may have been enacted for the reasons stated by Mr. Mody. But we are not in the present case concerned with the reason why section 5 and entry 15 in Schedule A were enacted. We are concerned at present with the construction of the two entries, viz., entry 15 in Schedule A and entry 3 in Schedule E to the Act. In the first place, it is not correct to construe a provision in one Act or ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Sri Kittappa Dress Manufacturing and Embroidery Works v. The State of Madras[1962] 13 S.T.C. 34., where the learned Judges while holding that choli bits and sarees are cloth and not clothes have observed that choli bits are mere pieces or lengths of cloth in a state of adaptability to be transformed into garments like bodices but by themselves, they are neither wearing apparel nor garments and that similarly sarees also are pieces of cloth and can hardly be called garments merely because they are draped round the body of a woman. He also relied upon the observations therein contained that the term "cloth" in accordance with its dictionary meaning and in its ordinary popular meaning, has to be understood as any woven fabric or stuff till it is transformed into an article like dress, garment or bed cover etc. which comes into ready use as such articles. In that decision, however, no question arose in terms of the question that arises before us, namely, whether the process of embroidering a saree piece is an incidental or an ancillary process and whether the superimposition of embroidery after the manufacturing process is completed, takes it out of the expression "cotton fabric". The ..... X X X X Extracts X X X X X X X X Extracts X X X X
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