TMI Blog1976 (5) TMI 88X X X X Extracts X X X X X X X X Extracts X X X X ..... - Civil Appeal No. 43, 44 of 1973, W.P. No. 49 of 1973, - - - Dated:- 3-5-1976 - RAY A.N., BEG M.H. AND JASWANT SINGH JJ. S.T. Desai, Senior Advocate (S.M. Jain and S.K. Jain, Advocates, with him), for the respondents. A.K. Sen, Senior Advocate, B. Sen, Senior Advocate, and H.K. Puri, Advocate, for the appellants. -------------------------------------------------- The judgment of the Court was delivered by BEG, J.- We have before us a petition under article 32 of the Constitution and two appeals by special leave from the judgment of the High Court of Rajasthan between the same parties. The three cases before us raise the same question of law. It is: Do the goods called "rayon tyre cord fabric" sold by the Delhi Cloth and General Mills Co. Ltd. to manufacturers of tyres, who use it for the purpose of impregnating it with rubber, fall under entry 18 of the Schedule of the Rajasthan Sales Tax Act, 1954 (hereinafter referred to as "the Act"). The schedule mentioned above gives a list of goods on the sale or purchase of which no tax is payable under the Act. The relevant entry 18, which was omitted in 1973, reads as follows: "18. All cotton fabrics, r ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... cotton and less than 60 per cent by weight of rayon or artificial silk; or (iv) if it contains no cotton and less than 40 per cent by weight of wool and less than 40 per cent by weight of rayon or artificial silk." The petitioners assert that, from years 1966 to 1969, the respondent- Commercial Tax Officer was not subjecting the goods of this description to sales tax and accepted the case of the petitioners that they were exempt from taxation. The reasoning of the Commercial Tax Officer, in exempting these goods, is also mentioned. It is then stated that, as some questions were put in the Rajasthan State Legislative Assembly, on or about 20th April, 1971, asking for the reason why this particular type of goods of the petitioners were exempted from sales tax, the Commissioner of Commercial Taxes issued a letter to the Commercial Tax Officer to levy sales tax on the "rayon cord fabric" manufactured by the petitioners. Thereafter, notices under the proviso to section 12(1) of the Act were issued for the years 1965 to 1969 with a view to reopening the assessments on the ground that the sales of these goods had wrongly escaped assessment, but these were dropped due to some prelimin ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... eing done by the first petitioner". This certainly means that the tyre cord fabric serves as raw material for another fabric which ultimately emerges by subjecting the goods manufactured by the Delhi Cloth Mills to a process of impregnating with rubber. A sample of the tyre cord fabric was actually produced before us. It is said that the "fabric " is manufactured in the same way as cloth is woven on looms. It consists of cords which could be said to constitute warps, running lengthwise, and wefts, running breadth-wise. But, the spaces left between them are so wide, presumably for purposes of impregnation with rubber, that it may not pass for an ordinary "fabric" like one of those mentioned in entry 19 of the First Schedule to the Central Excises and Salt Act, 1944, such as "tussors", "corduroy", "gaberdine", "denim". Indeed, if the "tyre cord fabric" is so well-established a category of rayon "fabric" it could have found mentioned specifically in item 22 in the same way as the numerous varieties of cotton fabrics are mentioned in item 19. In answer to this argument, it could be urged that, for some reason, entry No. 22 does not enumerate rayon and silk fabrics in the same fashion ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... usage and terminology or the language of the market in goods of this type. We, therefore, think that the High Court was right in not interfering with the decision of the taxing authorities at this stage. We also think that for the same reason we could not interfere under article 32 with the decision of the Commercial Tax Officer. Indeed, no fundamental right is shown to be affected by a mere determination of the question indicated above. There is no absence of jurisdiction of the taxing authorities who had the power to decide the question either rightly or wrongly. It has been urged, on behalf of the Delhi Cloth Mills, that the High Court should have interfered as the question whether the tyre cord fabric is the end-product or not in the final manufacture of another fabric was quite irrelevant. It was submitted that, so far as the Delhi Cloth Mills is concerned, the goods under consideration constituted the "end-product", which they sell in the market. The example given was that of cloth which is the "end-product" for the mills, which manufacture cloth, but it becomes the raw material for tailors and for those who make ready-made clothes to sell them. This argument overlooks th ..... X X X X Extracts X X X X X X X X Extracts X X X X
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