TMI Blog1978 (11) TMI 147X X X X Extracts X X X X X X X X Extracts X X X X ..... ether khukris were arms. In that case, Notification No. ST-1738/X dated 1st June, 1963, came for consideration. In the present case, it is Notification No. ST-1012/X dated 23rd March, 1971, but the relevant words are similar. It has been held in that case that the word "arms" means a weapon, which is capable of inflicting bodily injuries. Airguns are certainly capable of doing so. The order passed by the revising authority must, therefore, be upheld. The revision fails and is dismissed. There shall be no order as to costs. Petition dismissed. The judgment of the Court was delivered by MEHTA, J.-At the instance of the revenue, this reference has been made to us under section 69 of the Gujarat Sales Tax Act, 1969. We will state a few facts which have led to this reference before we set out the question referred to us, so that the question can be appreciated in its proper perspective. The opponent is a registered dealer under the Gujarat Sales Tax Act, 1969, and carrying on business in handloom, art-silk and silk jari saris as wholesaler and retailer. By bill No. 123 of 26th November, 1971, the assessee had sold two saris described as (i) Banarsi georgette sari for Rs. 300.25 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... a fabric in order to be a rayon or artificial silk fabric or cotton fabric, must have been manufactured either wholly or partly from the respective base material and must not have been excluded by the exclusion clause of these respective items. The Tribunal found, on the facts before it, that the first sari contained 28 per cent silk, 48 per cent viscose yarn and 24 per cent metallic of the total weight of the sari, while the second sari contained 23.20 per cent silk, 17.80 per cent cotton and 18 per cent viscose yarn and 41 per cent metallic of the total weight of the second sari. The Tribunal, therefore, reached the conclusion that the first sari was partly containing viscose yarn and, therefore, fell within entry 40 of Schedule I to the Sales Tax Act and the second sari was partly containing cotton and, therefore, fell within entry 37 of the said schedule to the Sales Tax Act. The Tribunal, therefore, accepted the appeal of the assessee and held that the saris in question were not liable to sales tax as they were exempted under section 5 of the Sales Tax Act, 1969. At the instance of the Commissioner of Sales Tax, therefore, the following question has been referred to us for ou ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... and Salt Act, 1944; since the legislature has thought fit in its wisdom to exempt cotton fabrics, rayon and artificial silk fabrics from the liability of sales tax in view of the fact that these fabrics are subjected to additional excise duty. In order to find out what is the true construction of entries 37 and 40, we will read the said entries together with items 19 and 22 of the First Schedule to the Central Excises and Salt Act, 1944, since the definitions of "cotton fabrics" and "rayon or artificial silk fabrics" have been incorporated by reference in the aforesaid entries of Schedule I to the Gujarat Sales Tax Act, 1969. Entries 37 and 40 of Schedule I to the aforesaid Act read as under: "SCHEDULE I -------------------------------------------------------------------------------------- Goods, the sale or purchase of which is free from all taxes -------------------------------------------------------------------------------------- Sl. No. Description of goods Conditions and exceptions subject to which exemption is granted 1 2 3 -------------------------------------------------------------------------------------- 37 Cotton fabrics as defined in item No. 19 of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... noted that we are concerned with the interpretation of entries 37 and 40 of Schedule I to the Gujarat Sales Tax Act, 1969, which provides for exemption of various articles and commodities as provided in section 5 of the said Act. In other words, they are provisions providing for exemption and it is, therefore, necessary that they should be, on wellknown principles of interpretation of statutes, construed strictly against the person who makes the claim for exemption. It is no more open to doubt that before an exemption can be recognised, the person or property claimed to be exempted from tax must come clearly within the language apparently granting exemption (vide Statutory Construction and Interpretation by Crawford, page 506, and Kedarnath Jute Mfg. Co. Ltd. v. Commercial Tax Officer[1965] 16 S.T.C. 607 (S.C.); A.I.R. 1966 S.C. 12. We have, therefore, to see whether the articles in question with which we are concerned, namely, the two saris in question fall within the respective entries 37 and 40 of Schedule I to the Gujarat Sales Tax Act, 1969. On a plain reading of these entries, we have to necessarily refer to the corresponding items 19 and 22 of the First Schedule to the Cent ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... iability of sales tax. If a fabric is wholly made from cotton or for that matter from rayon or artificial silk fabric, there would be no difficulty in construing the same either as cotton fabric or rayon or artificial silk fabric. The real difficulty arises when a particular fabric is made partly from cotton or partly from rayon or artificial silk, as the case may be. What meaning we would ascribe to the word "partly"-that is the real crux of the problem before us. Would the main part of the enactment defining the fabric in question be satisfied if the basic fabric has gone into the production to a small degree or measure? It was urged on behalf of the assessee that the main part of the definition would be satisfied if the basic fabric has gone into production to a degree or measure, though it should not be so small as to be merely illusory part thereof. It cannot be gainsaid that part is not a particle, nor it should be so minute in its extent and so trifling in its nature, as observed by different Law Lords in Chatterton v. Cave[1878] 3 App. Cas. 483., as not to bear the character of the article concerned. So far as this position is concerned, there is not much dispute between th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... y and, therefore, the exact meaning of this word can be interpreted only with reference to the exclusions of certain varieties of fabrics specified in the entries themselves. The Gujarat High Court in the case of Viswa Co.[1966] 17 S.T.C. 581 at 585. has observed that if the words are ambiguous or susceptible of two meanings, the exclusions following them not only can but must be taken into account for the purpose of arriving at their true meaning.....Considering the entry as a whole, it is clear that only such rayon or artificial silk fabrics are contemplated which contain the corresponding percentages along with wool, silk or cotton or a combination of one or more such materials. Thus 'partly' would mean certain percentages in relation to wool, silk or cotton or artificial silk and the expression 'rayon or artificial silk fabrics' would mean such varieties of fabrics which partly have the corresponding percentages of rayon or artificial silk fabrics and partly of wool, silk, cotton, etc." The Tribunal has conveniently ignored this approach of the Deputy Commissioner and has read the definition in parts. In the opinion of the Tribunal, it should be first found out whether the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... here is no legislative intent manifested expressly or by necessary implication, which would warrant the interpretation canvassed on behalf of the revenue. He invited our attention in support of his submission to entry 21 relating to woollen fabrics. According to the learned Advocate for the assessee, if the intent of the legislature had been to prescribe a minimum percentage of basic material so far as the item of cotton fabrics was concerned, it would have expressed itself as it has done in respect of woollen fabrics under item 21. The legislature has defined "woollen fabrics" to mean all varieties of fabrics manufactured wholly or which contain 40 per cent or more by weight of wool. We do not think that this contention is well-founded as the same result, namely, prescription for the use of minimum percentage of the basic material, could be achieved by necessary implication also. The very fact that the legislature has excluded those fabrics from the item of cotton fabrics, if they contain 40 per cent or more by weight of wool or 40 per cent or more by weight of silk or 60 per cent or more by weight of rayon or artificial silk, would necessarily achieve the same purpose which has b ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n clauses only in relation to that material which is mixed and if the intention of the legislature had been to refer to more materials than one, which might have gone along with the basic material, it would have clearly said so, as it has done in sub-item (ii) of item 20, where it has been stated that the fabric will not be included in silk fabric if it contains cotton or artificial silk or both and less than 40 per cent by way of silk. In that view of the matter, therefore, we are of the opinion that the Tribunal has committed an error of law in construing the word "partly" de hors the exclusion clauses and not ascribed the correct meaning which it should bear in the context of the set up of the different sub-items of exclusion clauses of items 19 and 22. The reports of the Silk and Art-silk Manufacturers Research Association (shortly known as Sasmira) giving break up and sub-break up of the components of the two saris clearly bring out that, so far as the first sari was concerned, it only contains 37 per cent viscose rayon, which would, therefore, not entitle it to be within entry 40 of Schedule I to the Gujarat Sales Tax Act, 1969, read with item 22 of the First Schedule to the ..... X X X X Extracts X X X X X X X X Extracts X X X X
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