TMI Blog1961 (10) TMI 65X X X X Extracts X X X X X X X X Extracts X X X X ..... is that what is taxable under entry 2 of List I of the Notification No. ST 117/X-923-1948, dated 8th June, 1948, issued under section 3-A of the U.P. Sales Tax Act. is "cloth manufactured by mills", and the articles mentioned above do not fall under that description and were not taxable at six pies per rupee but were merely general articles taxable at three pies per rupee under section 3. Hence the sales tax paid in excess of three pies per rupee in the years in question on the petitioner's turnover of those articles was paid under a mistake of law and by reason of the decision of the Supreme Court reported in Sales Tax Officer, Banaras and Others v. Kanhaiya Lal Makund Lal Saraf[1958] 9 S.T.C. 747., the petitioner was entitled to refund. As regards the delay in filing the writ petition, it was argued that under section 22 of the U.P. Sales Tax Act, there is a period of three years from the date of the order provided for a rectification application. The application for rectification was made by the petitioner on 3rd June, 1959, but no orders had yet been passed on that application, it was admitted, that originally. the period mentioned in this section was "one year", but in 1959 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of claims for refund were lodged with the Government on the basis of the single Judge decision. These facts are so well known that judicial notice of them might properly be taken. The decision of the single Judge was affirmed by a Division Bench by an order dated 1st December. 1955. reported in State of Uttar Pradesh and Others v. Kanhaiya Lal Makund Lal Sarraf[1956] 7 S.T.C. 379. On appeal to the Supreme Court, the decision was affirmed by the Supreme Court on 23rd September, 1958. From what has been stated above, it is clear that there was nothing in the case of Kanhaiya Lal Makund Lal Sharraf. which could lead to the discovery of the alleged mistake of law that the entry "cloth manufactured by mills " did not cover the articles mentioned above. It follows, that this decision could not lead to the discovery of the alleged mistake of law. It was next argued that the decision at least led to the awareness of the right to refund. Even if it may be assumed for the sake of argument, that that decision had any such result, the petitioner must have become aware of that decision, as early as 30th November, 1954, when the learned single Judge decided the case. and the decision was ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... personal use. What is exempted under the notification is 'cloth' and not 'clothes'. What the applicant does is to take handloom cloth and either cut it into specific sizes or to have them manufactured into specific sizes, so that the pieces can be used as saris, bed covers. lihafs (quilt covers) etc., and then to print them so that they can be readily used for the purpose for which they are meant. It is quite obvious that the articles in which the applicant deals are 'clothes' or garments and not 'cloth' within the meaning of the notification." In that case, under a Government Notification "cloth manufactured on handlooms" was exempt from sales tax. The petitioner, in that case, held a licence under the U.P. Hand Printers and Hand Dyers Licensing Order, 1949. He was carrying on the business of selling saris, lihafs, fards and bed covers after cutting handloom cloth into specific sizes, and printing on them. It was the petitioner's case that the cloth sold by him did not lose its character of handloom cloth by the mere fact that it had been printed and put in the form of saris, covers for quilts and bed covers. The case of the department there was that the printed handloom articles, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... From this it follows that the essential difference between "cloth" and "clothes" is that whereas cloth is what comes straight from the weaving or the textile factory, "clothes" are something after "cloth" has been converted by cutting and stitching and something having been done to "cloth" either by human or machine agency to make that "cloth" into a garment or wearing apparel. So far as the dhotis and the saris which are manufactured by the petitioner are concerned, they are sold as they come out of the mills with nothing more at all being done to them by any other agency. There is no conversion of one kind of product into a different kind of product by any additional expenditure of human labour and skill. The mere fact that dhotis and saris are of particular sizes, whereas generally speaking "cloth" manufactured by the mills is of much greater length does not also to my mind furnish any distinguishing feature. It is well known that rolls of cloth come in different sizes, some rolls being of 40 yards, others of 24 yards, still others of 20 yards. Some expensive suiting is manufactured only in lengths of 3 yards, so that there may be no two pieces available of the same kind, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ibed as "suiting". It would make no difference if a shifting cloth was manufactured and sold in lengths of three yards or two and a half yards, just as it makes no difference if a suiting cloth is manufactured and sold in lengths of 3 yards. Further it is the usual thing for bed-sheets, pillow cases, bed covering and wrapping to be described as "household linen" or "bed linen." "Linen" only means cloth. It follows that so far as chadars and towels are concerned, they are also merely "cloth". Nothing very much was said about "canvas" by the learned counsel for the appellant. Clearly, it is also only cloth specially adaptable for tentage or similar use. As shown above mere adaptability for a particular use does not cause a cloth cease to be The last two articles are "rags" and "fents". These are pieces of cloth of varying sizes which on account of defect in manufacturing have to be sold separately from properly manufactured cloth. To my mind the nature of these, as a fabric, is not different from the nature of perfectly manufactured cloth. This must necessarily fetch lesser price. But that should not make any difference to their true nature as cloth. They may or may not be amenabl ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
